Friday, March 09, 2007

Stop Treating The Rich And Famous Like They're Better Than You

There's something about meeting the rich and famous that makes people lose their brains. Just these past few days, I've been reading tons of gushing posts about being at TED. My fellow MyWay blogger Matt Blumberg even wrote post entitled "Humbed at TED."

This kind of fawning makes me sick.

No matter how famous a person is, they're still only human. Bill Clinton has to get up in the morning and put on clothes, just like you and me.

Treating the successful as if they were on another plane simply perpetuates the belief that you'll never achieve the same kind of success. Which is rot.

Success isn't a god-given right, or a sign of divine favor. It's the result of smarts, hard work, and a good dose of luck. And you shouldn't treat a guy any differently just because he has a few extra zeros in his bank account, or a few extra interns in his pants.

Gretchen has a great post about why we love simply seeing the famous. It's an atavistic, religious response:

Darshan is a Sanskrit Hindu term meaning “sight” or “auspicious viewing.” Darshan is the beneficial glow that comes from being in the presence of a great spiritual leader (or holy place or object). Merely looking at such a person – and even better, receiving his or her glance – bestows a blessing.

In Vikram Chandra’s fantastic novel set in India, Sacred Games, I noticed, people also sought darshan of a rich and famous mobster.

So when people crowd into a store because Jennifer Aniston is inside, or follow Woody Allen down the street for blocks, or stand outside in the freezing cold to see Barack Obama speak instead of watching him on TV, it’s because they want darshan.

Look, I'm not trying to denigrate the rich and famous. Many, if not most of them richly deserve their success. But as they say in the mutual fund industry, past performance is no guarantee of future results, and that's even more true when it comes to issues outside their area of expertise. Bono may be a great musician, but what the hell does he know about economics or foreign policy? Would you take fashion tips from Bill Gates? Hell, you probably shouldn't even take technology tips from him. And Lord knows, I'm not sure what Silicon Valley has to learn from Cameron Diaz.

Hero worship, fame, religion...it's fine to feel an emotional reaction to extraordinary circumstances. But don't let that feeling overwhelm your faculties. In the end, you should seek the truth and believe in yourself. That's the only sure formula for success.

The Secret, Three-Part, Can't Fail, Guaranteed Marketing Formula

I really enjoy Jim Logan's B2B marketing blog, and this post (extensively excerpted below) is an example why. Here, he provides his formula for copywriting success:

Benefits.
No one wants to buy anything we offer. For some this is a hard thing to grasp, but it’s true. No one wants to buy our products or services. People want to buy the things our products and services do for them.

As an oversimplified example – no one wants to own a computer. What we want is the ability to create and edit video and audio, desktop publish, surf the Internet, shop online, sell products, email family and friends, etc. We don’t want to buy the computer, printer or other peripherals. We want to buy the things we can do with them.

Difference.
Assuming you’re not the only person on earth selling the benefits you offer, what’s different about you and your offer? In other words, why should I buy your particular offer…why shouldn’t I purchase from your competitor?

An important thing to note is difference only counts if the buyer recognizes it as a value that offers a benefit. Being different isn’t enough, it has to be difference the buyer recognizes as something of value.

Reason to Believe.
Assuming your prospect wants the benefits you offer and acknowledges the difference of doing business with you and your company…why should they believe you? More importantly, why should they believe in you and your company?

Your prospective customer wants to know why you can be trusted and are worthy of being their vendor, capable of delivering on the benefits and difference you claim.
=====
Combining the three elements above and weaving them throughout marketing and sales campaigns has proved to have a significant impact in the ability to grow a company’s revenue. It’s that powerful.


This is a post that every high tech marketer should print out and memorize. I can't tell you how often we as an industry fall back on selling the features, focusing on differences that only matter to us and our competitors, and spouting the same empty words about being committed to being customer-friendly.

Finding the Essential Story

"Never let the truth stand in the way of a good story!" --Delbert Trew, Texan Historian

Today marks the release of the comic book epic, 300, about the Battle of Thermopylae. While critics may end up panning the movie for its loving depiction of muscular, nearly-naked caucasian warriors decapitating a faceless army of swarthy foes, the story behind the movie is certainly worth of note.

At Thermopylae, 300 Spartan warriors fought to the last man against a Persian army of over a million soldiers, delaying the advance of the army long enough to allow the Greeks to regroup and ultimately defeat the Persians. In doing so, the Spartans, led by King Leonidas, won everlasting fame and glory.

Well, at least the last sentence is correct.

You see, nearly everything about the story we all remember and believe is wrong.

The 300 Spartan warriors did fight to the last man, but they were joined by 700 Thesbians who chose to stay and fight. (I guess "1,000" didn't seem quite as cool a title)

The Persian army probably numbered around 250,000.

A Greek army of several thousand, led by the Spartans managed to delay the Persians for three days, before the Persians managed to outflank them (a covering force of Phocian troops inexplicably abandoned their post, sealing the defeat). Leonidas and his men chose to stay and die, possibly in order to fulfill a prophecy from the Oracle of Delphi who had stated that Sparta would burn unless a Spartan king died. At any rate, the sacrifice of the 1,000 bought the Greeks exactly one additional day, as they were quickly overwhelmed by fighting superior armies on two fronts.

While Thermopylae was a tactical victory (the Greeks inflicted perhaps 100 times the casualties that they suffered), it was a strategic defeat, and the Persian army continued to advance. Ultimately, the Greeks won the second Persian war because of the Athenian general Themistocles, who correctly reasoned that the Persian army was dependent on the sea for resupply, and managed to inflict enough damage on the Persian fleet during the battle of Salamis to force the Persians to end their campaign.

Yet in the end, few people remember that the Greeks won because of their understanding of Persian logistics. They remember, even 2,500 years later, that 300 Spartans gave their lives to defeat the Persians.

That, my friends, is the essential story. Storytelling isn't about conveying a sequence of events. It's about making an impression and being memorable. It's about stripping out the extraneous information and focusing on a simple core message that has the power to compel. Freedom. Honor. Glory.

As you attempt to persuade, simply using the weight of facts isn't enough. You need to tell a story that taps into our universal emotions, that takes us on a journey. Don't just talk about the benefits of your product--help the prospect paint a picture in their mind, both of their struggle, and (with the help of your product) their eventual triumph.

In this larger sense, Thermopylae was a strategic triumph. The sacrifice of the Spartans, while of negligible military value, served as the core of an extremely persuasive story, a story which the Greeks told to themselves to boost their morale and hearten them for the struggle, a story which still resonates with us today.

Thursday, March 08, 2007

Didn't The RED Campaign Work?

There's been quite a bit of agita in the blogosphere about this Ad Age article that details how the companies involved in the RED campaign spent $100 million on marketing, and thus far have only raised $18 million for charity.

The problem is that all of these bloggers are dead wrong in the conclusions that they drew, as was Ad Age. Anyone who read the article and considered the campaign a failure knows nothing about business.

So let me break it down for you, HBS-style:

According to what I've read, the companies that participated in the campaign committed to donating 40% of profits on the merchandise.

Checking Yahoo! Finance, it looks like Gap makes pretax profits of $1.7 billion on sales of about $16 billion, for a profit margin of roughly 10%.

If the other companies participating in the campaign show a similar pretax profit margin of 10%, then we would expect the $18 million to represent 4% of total sales, pegging total sales from the RED Campaign at $450 million.

So while spending $100 million to get $18 million may seem like a total bust, the companies that participated did manage to sell $450 million of merchandise, and made profits of $27 million, even after spending $100 million on marketing.

You can argue whether or not the RED sales cannibalized existing sales, and whether or not the campaign delivered a better ROI than the other options, but when you consider the positive halo effect of the campaign (donating millions to charity can help a lot of people forget about sweatshops and other such sins), I'm betting that the companies that participated aren't crying in their drinks.

The outrage and schadenfreude over RED seems to be focused on how the $100 million that was spent on marketing could have been donated instead. And that may be the most inane thinking of all.

Businesses exist to make money, and there is no way that the CEOs of the participating would consent to donating $100 million to charity without getting something back. That option was never really on the table.

Now if you do feel like getting outraged about something, how about protesting the fact that the 2008 presidential campaign is likely to see candidates raising and spending $1 billion on advertising and marketing.

Monday, March 05, 2007

Is This The Age Of Features?

From time immemorial, one of the most sacred shibboleths of Silicon Valley has been that to launch a startup, you need to be a product, not a feature.

Generations of VCs and entrepreneurs has agreed on this point. But I'm wondering if today's Web 2.0 world has fundamentally changed the equation.

Let's start with why you need to be product, as opposed to a feature. When it cost $3 million to develop and launch a product, simply adding a cool feature could never generate enough revenue to justify the investment. Moreover, the proverbial danger was that if all you had was a feature, the product manufacturer would eventually develop its own version and turf out out of the market.

Today, two important things have changed: One, it costs a hell of a lot less to build products or features. And two, in the loosely coupled world of the Web, it's unclear that product makers have much of an advantage when it comes to turfing out incumbent features.

When you can build a cool new widget in your spare time, let the blogosphere do your evangelism for you, and then sell for a couple of million, suddenly being a feature doesn't seem so bad.

I don't know how much it cost to develop and operate AddThis, but I suspect it's less than the cost of a Prius if you don't count labor. Sure, this is a feature that someone like 6Apart or WordPress or Google should be able to add practically overnight. But once it's in, why would a blogger switch? As a result, I'm just waiting for the inevitable buyout news to appear in TechCrunch or VentureBeat.