How Does Product Marketing Inform Service Marketing?

Because I’ve spent time at both product and service companies, I keep getting asked what the difference is between marketing products and services. For a year, I’ve been saying that they are more similar than you might think. So, I’ve finally collected some of my thoughts on the issue. Since I started in the product space, and because I’ve spent more time there, this is really directed at explaining how product marketing can inform the way services are marketed.

DIFFERENCES BETWEEN PRODUCT & SERVICE MARKETING

PRODUCTS
–  Tangibles
–  Buyer can experience first hand by trying them out
–  Collateral focuses on claims, benefits, features, and price
– Product samples

SERVICES
– Intangibles
–  Buyers rely on second hand experience (testamonials, case studies, etc)
–  Collateral focuses on unique value propositions (quality, speed, flexibility, etc)
–  Case studies, testimonials, brown bags

SIMILARITIES BETWEEN PRODUCT & SERVICE MARKETING

–  Tell meaningful stories about your product or service.
– Marketing leaders act as an internal advocate for the customer.
–  Focus on building an emotional connection with your brand.

ON SELLING SERVICES … LIKE A PRODUCT MARKETER

Service companies must make their intangible offerings feel as tangible as possible. This is one area in which product marketers can inform the development of a services marketing strategy. One way to do this is to focus on developing tangible artifacts that you can embed in your sales process. Include everything from samples of recent work, to case studies, articles, testimonials, and white papers. Use artifacts to foster conversation and build relationships as the primary driver of any service sale. Remember, clients are not just buying work hours or deliverables, they are buying a relationship. That said, the best product marketers go beyond the products they manufacture to build long-term relationships and emotional connections with their brands (think of Brandon Schaur’s Long Wow) …. which means many of the most engaging products enable, you guessed it, services!

To convince prospective customers that a service is different and better on some meaningful dimension, marketing should be focused on the communication of a particular philosophy of service delivery (and benefits of the service to the buyer). This is what gets embedded in communications guidelines, standard collateral, selling points, sales decks, etc.

One significant difference between product and service marketing (at least high-end service companies) is that product-based marketing is typically more price-centric, while most high-end service providers do not compete on price. This is counter-productive because there will always be a cheaper option. Unless volume sales are the driver of your business strategy, price-cutting is probably not an effective approach to attract buyers.

While competing on price is not an appropriate driver for most service companies, it does not mean that the presentation of your pricing  cannot have a significant impact on sales. In fact, offering pricing options can garner greater attention during a client’s bid review process, fosters additional conversation and opportunity to build rapport, and can lead to service up-selling opportunities. For more information on how pricing can have behavioral impacts during the sales process refer to Dan Ariely’s book Predictably Irrational (this link will take you to a series of videos in which Ariely lays out many of the ideas from his book, along with links to the original research papers).  Some of the research Ariely presents explores the impact that sales collateral, visual presentation, and environment can have on decision-making. This speaks to how making services more tangible can drive decision-making behaviors your way.

If you’re a native service marketer, I’d love to hear your thoughts on this …. there is certainly no question that many product marketers could learn something about building relationships from y’all!

CRM Analysis Redux

This is a follow up to my earlier post on customer relationship management (CRM) tools. Thanks to all who responded and provided feedback. I’ve followed up on many leads, and am writing to provide a high-level update on what I’ve learned.

Discovery Summary

The landscape for CRMs is quite diverse in terms of business model, price, and development approach. On one end of the spectrum there are open source tools, which are supported by development communities, such as SugarCRM and OpenObject. These can be inexpensive from a cash outlay perspective but you’ll need a developer to install and manage them on an ongoing basis. They can be hosted by a service provider or on your own, and there are even service options available through partners. Then there are proprietary tools like SageCRM and Goldmine, which position themselves as turnkey solutions that can be hosted or not. They are priced at mid-market and do development internally. SalesForce offers a hybrid approach where they offer a basic turnkey solution that is highly extensible through third party partners, available through their AppExchange. While it is not open source, APIs allow developers to build on the platform. SalesForce is available only through the web and cannot be hosted, and can cost a bit more than the proprietary options depending on the configuration you choose. Finally, at the other end of the spectrum, there is NetSuite. This service goes well beyond CRM as an enterprise solution for running your entire business. From payroll to inventory management, marketing and sales tools, NetSuite is your one stop shop. As a former NetSuite client, I’ve gotta say it’s pretty impressive but it’s also expensive and set up for larger businesses.

Other CRM tools that were sent my way after my last blog included: Zoho, Prophet, Infusion CRM, CiviCRM, Oracle (Sieble), Leads360. Sugar and SalesForce seem to rise to the top if you’re in a small or medium sized business, design consultancy, or consulting practice. To be frank, it’s hard to imagine how the proprietary tools can keep up with the design communities and partners that support these two options.

Observations

  • The cost of switching CRMs is very high, so if you have something that works, and that is extensible for your needs then you should seriously consider sticking with it. This is why I’ve invested the most research time in SalesForce.
  • Make them give you a prototype. This is REALLY important, CRMs are very complex and have to get in there and use the product to be able to evaluate it. I had to twist arms and invest a bunch of time to get a prototype running in SalesForce, but it was worth it. Without doing this you can’t know how well the AppExchange integrations really work, or what the user experience feels like.
  • Pick something that’s going to be around for a while, and that has solid partners. Once you’re into a CRM is hard to get out without significant data integration consequences. The CRM provider is a partner, so select carefully. Make sure to look carefully at their roadmap for product upgrades, and work with them building a prototype to get a sense of their service team.
  • On pricing, there seem to be three levers they you can negotiate with including, payment terms (monthly, quarterly, annually, or contract term – the latter offering the best price), length of contract, and number of users (there are price breaks to consider).
  • Also, if you are a non-profit pay special attention because SalesForce really wants your business (one might say they are artificially deflating the market for non-profits by doing this)!  They are giving away a 10 license subscription FREE, and major discounts additional licenses. And these are enterprise level accounts with all the bells and whistles. More info here.


The Real Value

  • Here is an overview of some of the benefits CRMs can offer. Many of these allow you to work more efficiently, and other’s offer insight into your business.
  • Keep track of all communications with your client in one place. This makes things easier when you want to check in later to see if there are new opportunities to work together. This can also help prevent people on your team from stepping on each other’s toes.
  • Organization charts make it easy to understand who reports to whom on the client side. Who is your financial buyer? Your sponsor buyer? Your user buyer? And, where are they within the organizational landscape? This can really help when coordinating your internal team, or when partners roll on and off projects.
  • If you send out a newsletter, or other online communication, you can see if a potential client has received, and read it, from within that contact’s record. This can help get conversations started, and keep them going.
  • Link case studies, deliverables, testimonials, media contacts, contacts, clients and projects together in one place. This makes it really easy to find and share information that a prospective client might be interested in.
  • Follow up reminders. Ding, it’s time to get back in touch with a past client. In a busy practice it can be really hard to remember to do this kind of work but it can have a profound effect on smoothing out your pipeline.
  • Reporting dashboards show you how your sales process is working in real time. Where are incoming calls trending? How is return business trending? What about outbound sales efforts? Besides saving time (building and updating excel spreadsheets) this makes reporting more accessible, which in turn makes it easier to spot potential opportunities or issues.
  • Finally, for those interested in SalesForce, the new Google Docs integration seems to have a lot of potential. It allows folks to work on the documents at the same time, chat inside SalesForce, capture e-mail chains, and more. This is definitely something to keep an eye one, and you can learn more here.

That’s just an overview, and which tool you use will effect which benefits apply most to your business. Ultimately, these tools are about making the client experience better by being able to get them the information they need faster, following up with them in a coordinated way, and staying on top of the details. Of course, it can also make your experience better by saving you time, and providing insights into your business. For example, if you tracked most of your business as coming in through your blog, you might adjust your marketing mix with this in mind.

A Final Word On User Experience.

Many of the tools that I’ve explored could use some help on the user experience front. Considering that user adoption is probably the single largest barrier to the success of these tools, this is a major issue. It seems the software as service industry has been growing so rapidly, and has been so focused on feature sets, that they’ve overlooked the power of user experience to support adoption. CRMs have something of a bad name from this perspective because there is a legacy of clunky and hard to navigate interfaces. At the same time, the real value of CRMs can only be tapped into if people are engaging with the tool and using it regularly. Of the tools I’ve used SugarCRM and SalesForce seem to be the best, but there is defiantly lots of room for improvement.

Viral Campaign Listens to Customers Sort of …

You may have already heard about the Burger King “Whopper Freakout” campaign which has been spreading virally and driving people to their micro-site here. What I find interesting about this campaign is that it makes a point of listening to customers, which I believe is a primary charge for marketers. I would go so far as to say that marketers need to be an internal customer advocates.

Whopper Free Zone

Whopper Free Zone

That said, Burger King is intentionally pissing their customers off in order to get their reaction, which is what makes it funny but also meaningless from a service development perspective. I have a feeling that it’s about more than just offering “flame broiled” burgers as opposed to fried burgers (insert selling point here). What is does show effectively is that customers are emotionally connected to the brand, which is what any brand should strive for.

I do think there is something disturbing about the idea of artifically pressurizing a market so that you can listen to customer complaints, and then give them back what your purposefully took away. I question if there is a net gain of goodwill in the end, though it’s certainly amusing and seems to be driving brand awarenes.

Adopting the documentary/reality lens works well for the concept, but the video goes on too long. They could have cut this in half and had a more significant impact. I also think they’ve also missed an opportunity to get the community involved with the project and keep the micro-site alive …. letting their community upload video of their own? Or, at the very least including a location finder and coupon so they could track the effect on purchasing.

3 Approaches, and 3 Mistakes Not To Make , When Rolling-Out Website Redesigns

Over the past several months it seems there has been a steady stream of articles about good, bad, and ugly redesign roll-outs. In addition to what I’ve been reading in the media, I’ve been involved in a few roll-outs through my work at Adaptive Path. As a marketing guy, I sometimes work with our clients on the roll-out of our work, so I pay special attention to the way we announce, prepare for, and follow through with launches. In my opinion, sending messages to those who will be affected, and opening lines of communication for feedback, is an important part of this process that still gets short changed. Beyond that, usability testing and roll-out planning are frequently overlooked all together. Often it’s because there is significant pressure to launch the %&#*! thing. Sometimes the roll-out strategy and planning is simply overlooked, or underestimated, when a project is initially scoped.  I’m writing to put a spotlight on roll-out strategy, to highlight the value, and to point out three approaches that might work for you.

The Value Of Rolling-Out Right

A solid roll-out plan is like a good follow through for a golfer. You’re practically done with the swing, but that little bit at the end can make all the difference. You’ve worked hard to create a great redesign and you want to make sure that it comes to market in a way that complements the work itself. This is equally important when you’re working on a short putt or a long drive.

The value of a well coordinated roll-out can be seen clearly through the relationship you have with your customers, and how they respond to change. Most people don’t like change, so roll-outs are inherently a tricky business. I recommend putting a dollar amount on the time you’ll spend managing a roll-out gone bad (not to mention the headache) and I assure you that it makes sense to invest in planning up front. This reminds me of a piece of advice that I’ve heard from many athletes, “it takes twice as long to re-hydrate as it does to hydrate.” Quick response time can be very helpful when rolling out redesigns, so be prepared with for as many scenarios as possible.

The perceived value of your team can be affected as well because their brilliant work can get lost if a flood of criticism rolls in without contingencies in place. It’s important to stay on course towards the long-term value, so plan out how you’ll respond to issues before they arise, and dedicate extra bandwidth to respond to the initial waves of reaction. If all goes well, you can use this extra time to drink some champagne.

Finally, the clearest articulation of value is expressed in returning business. Many organizations track attrition and conversion associated with roll-outs by comparing normal attrition/conversion rates against those after a roll-out. Look at the value of those customers over the average life of their patronage to estimate value. The real cost should be some standard percentage larger than this when you account for the goodwill and evangelism for your service that is lost.

3 Approaches

How you prepare depends on how significant your redesign is. As a general rule, and in the interest of fair disclosure, my own opinion is that large scale redesigns often send the wrong message to the community because they are hard to tie to user feedback. They can cause the support network to break down, they offer less opportunity to build on the site’s legacy of interaction design, and they are always more jarring. Of course, there are situations in which massive redesign can’t be avoided. In other words, I prefer a more Agile approach when possible, because this lets you roll out changes slowly over time and keep your community close. That said, there are different opportunities depending on what you’re launching.

Here are three archetypal approaches to consider as you formulate a plan for your roll-out:

  • The Slow Burn – this is similar to an “early and often” approach and involves getting your initial message out in the context of a multi-part reveal that you’ll be updating at key points along the way.
    • Media Impact: this can be helpful in establishing relationships with the media because you can build the dialogue over a series of communications. This works best with more traditional media where journalists may be working on larger stories that require long lead times. You can still take advantage of exclusive releases, and embargoed stories with this approach if you’ve got a good reason to do so. Obviously there will be lots of opportunities for you to get the message out through your own communication channels, just make sure to honor whatever arrangements you have made with the media.
    • Implementation: Changes can be released on a time-line with countdowns, where you give your community fair warning before they are implemented. If the changes are small enough though, you can sometimes migrate them without much of a fuss. Celebrate the best changes, and minimize the less sexy parts.
  • Going Beta – this approach can be combined with The Slow Burn approach, or can be run faster, and usually includes an opt-in by existing customers.
    • Media Impact: this has the advantage of letting the media get into the opt-in site along side the self-selecting members of your community. The good news is that self-selecting participants may be more likely to like the redesign, which means that media might be exposed to mostly positive feedback. At the same time, the media is less likely to make as big of a deal about a beta release (though there are exceptions to this because different sites interpret what it means to be in beta differently). If they don’t make a big deal out of it, then you should  work with them to make a big deal of migrating from the beta to a fully rolled-out redesign. It’ll be a bit less dramatic though because the cat is already out of the bag.
    • Implementation: when doing opt-in Beta releases you’ll want to make sure you have some sort of moderated feedback forum to collect responses from the community. It can be helpful to collect the most useful feedback on a board along with planned responses and/or explanations. This is most important when you are working in the context of a site that has a tight community of evangelists.
  • The Launch – Many people use this interchangeably with roll-out, but I think a launch is a dramatic type of roll-out. it’s not exactly a secret, but with this approach you’re artificially building pressure by creating a scarcity of information around your redesign. This can be very effective at generating a burst of coverage, and excitement in advance. This works particularly well when you are offering a stand service or content piece that your community can line up to get. Though this was not for a redesign or a website, we used this approach with the release of the Adaptive Path Aurora Concept Video.
    • Media Impact: in this case it’s easier to set up exclusive coverage for a story, particularly if you already have a good relationships with the media outlets you plan on targeting. Embargoed stories may be required, but beware of “leaks” that may compromise your media relationships. Obviously, the more well known the service the better this approach can work.
    • Implementation: the countdown approach works well in this scenario. Be ready for hell to break loose if you haven’t done any test markets or beta testing. This is the riskiest approach, but if you plan well it can survive some glitches. Think back to the launch of Firefox 3 which crashed their servers, but still set a world-record, and came across in a positive light (the ugly example in the intro).

Mistakes Not To Make (And Some Stuff To Watch Out For)

Some of the examples I cited in the introduction involve companies that host significantly engaged communities that were affected by the roll-out of redesigned pages or websites. Earlier this year, Adaptive Path worked on a website with a very involved community as well, MySpace (read a case study about this project here). When there is community involved, you’ll often see sites offering members a chance to opt-in to the redesigned areas to try them out. There are a couple of things to remember when doing this kind of activity:

  • Always remember that you’re working with a self-selecting group that may not be a representative sample of your community.
  • Such groups may tend to be more positive because they’ve actively chosen to participate.
  • Provide a resource for the community to offer feedback and make it highly visible to both those in and out of the opt-in.
  • Make sure that resource includes a means of acknowledging feedback with well moderated replies.
  • Collect the most common issues and respond to them in a clear and concise way that is consistent with your brand personality.
  • Be patient, and wait until new issues come up infrequently.

But beware! It’s possible to listen to all the feedback, and incorporate it in a balanced way, and still get massive resistance during roll-out. Perhaps Facebook did all of the above well, and even extensively tested the redesign to make sure it was solid. Let’s even assume that the redesign benefited from all the community input. That still won’t address the shock that the community will feel when they come to their Facebook page one day and see that everything has moved.

Sometimes this issue has nothing to do with the redesign itself. So what is it about, and how can I avoid it?

  • Don’t move too fast – Avoid going from an opt-in beta to a site wide roll-out suddenly. A banner at the top of the page requesting that people opt-in, is not enough warning in an of itself. Give people time to figure out what’s going on. Some people touch your website everyday, others may only visit once a month or less. This means it may take for the message to get to them.
  • Don’t explain after the fact – Speaking of getting the message out there, don’t forget to let the community know why you are doing this in the first place. I recommend building such messages into some sort of countdown. I’m not necessarily talking about a literal countdown, though that can work. I’m talking about a messaging plan that culminates with a message that reaches deeply into your community, either through your own communication channels or through those in the media.
  • Don’t lose your focus – Direct your energy to the aspects of the redesign that are most likely to cause a stir, and be prepared to support your decisions. The smaller issues aren’t likely to be deal breakers so don’t stress about the small stuff.

There are many approaches and pitfalls associated with rolling-out redesigns, but hopefully this has gotten you thinking. As is often the case, the single most important factor to consider is the end user. What is their experience going to be like, and what can you do to make the experience the best it can be? If you’ve got other insights about how to roll-out redesigns please comment below!

The Ultimate Driving Experience

A couple months ago I had the pleasure of traveling to South Carolina to attend a driving course at the BMW performance driving school. My father had recently purchased an M Series car and attending the school with a guest was part of that package. I love driving, so I was thrilled at the opportunity to take some tricked-out BMWs onto the track. What I didn’t expect was a well crafted experience from start to finish. The weekend really summed up how powerful a great experience can be. Here are some of the highlights:

The experience actually started in a BMW showroom when my father went in to learn about the car in the first place. These cars are marketed to driving aficionados who are often interested in the mechanics of how they work. BMW has lead automobile innovation for a long time, and the M Series of cars is the product line that expresses this innovation most. For those interested in these cars there is extensive information about what makes them so remarkable online. What will probably be more engaging to the readers of this post, however, is how BMW uses Microsoft Surface screens in their showrooms:

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BMW presents technical information alongside information about their driving schools where owners have the opportunity to get training by some very talented, and competitive, drivers. You can watch some of those videos here. Together these presentations are compelling, emotionally inspiring, and contagious enough to make most people want to put the pedal to the metal. But, if you’re not interested in the track, BMW has other experiences on tap. For example, you can pick the car up in Germany and take a road trip through Europe before heading home with the car.

One interesting note about the factory in Germany is that it was one of the first places to use audio tours, which later made their way into blockbuster museum exhibitions. It seems that they are very capable of bringing their design thinking outside of the cars themselves. Before leaving for South Carolina, BMW sent me a nice letter of introduction, an itinerary, and a list of what to bring. When we arrived in South Carolina they were waiting for us in BMW SUVs that took us to our hotel. They’d a BMW branded menu at the restaurant (ok that may have gone too far, but it was a tasty meal), shirts and hats were left in our rooms, and cars were provided if we wanted to catch a movie in the evening. When we got up the next morning there was a bus to take us over to the driving center (sadly, not a BMW bus), which was an impressive bit of architecture.

I don’t want to go too deeply into the curriculum of the driving school itself, but I will say that it was well run and a lot of fun. There was a good mix of play and instruction. I would, however, like to highlight what happened when I got home from the school. A couple weeks after the course. I received a DVD in the mail with footage of my training so they could review my performance, and continue to try and build on the skills that I was introduced to. What I find interesting about the videos is that they embed the speedometer an tachometer into the image along with a representation of where you are on the track. Here is a video clip of my 65 year old father winning a race on a short loop course in the rain (he beat me by three stinking tenths of a second).

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While we were at the school I heard a story of how the BMW design approach had been a barrier to user experience at least once. Apparently, BMW’s M Series cars did not have cup holders for a long time because the designers did not believe it was safe, or appropriate, to drink beverages while driving. When they did initially install them, they were apparently of poor quality. Fortunately for my father, it seems they’ve rectified this issue.

Which brings me to the BMW iDrive, which a computer system used to control most secondary vehicle systems in many current BMW cars. iDrive’s user interface consists of a LCD panel mounted in the dashboard and a controller knob mounted on the center console. iDrive allows the driver and front-seat passenger to control such amenities as the climate (air conditioner and heater), the audio system (radio and CD player), the navigation system and communication system. This is another area where the user experience seems to break down a little bit. You can read some of the critical reviews here:

  1. JAMES G. COBB (May 12, 2002). “Menus Behaving Badly“. New York Times. Retrieved on January 18, 2008.
  2. Jasper van Kuijk (December 24, 2007). “More iDrive Reviews; the Evolution of a Bad Idea“. the product usability weblog. Retrieved on January 18, 2008.

Based on my experience on the track I’d say that many of these issues are still present in iDrive. There is a fairly steep learning curve, and the system seems to contradict the safety concerns that made the BMW designers resist cup holders. In other words, it’s hard to use when driving, which could be dangerous. This begs a question about how siloed the design teams are at BMW, and makes me think there is probably an opportunity here for better management of user experience.

As your industry grows, and user experience teams become more embedded in product and service development practices, there will be a greater and greater need to focus on the managemnet side or our practice. Our conference MX: Managing Experience is all about this effort. If you’re having these kinds you issues please check the conference out.

Thanks for reading, and I look forward to your comments.