Tag Archives: competitive advantage

Intrepid Intrapreneurship, 2012 Style

Have you heard about the League of Intrapreneurs competition going on right now? Ashoka and Accenture are serious about helping companies “build better business from the inside out.”  Early applications were due by October 24; final nominations and entries by January 15, 2013. The top 15 entrants from the competition will form the inaugural class of the League of Intrapreneurs, becoming part of an elite global network of changemakers. These entrants will also receive media and press recognition and will be featured in the publication of a globally distributed intrapreneur toolkit. Of this league, the top four winners will be profiled on Fast Company’s blog, Co.EXIST, and will receive consulting support from Accenture Development Partnerships to further their work.

What is Intrapreneurship? The Wikipedia definition that is quoted on the home page of the Intrapreneurship Conference being held in Paris next month says it is “the act of behaving like an entrepreneur in a bigger organization.”  Their promotional pitch continues: 

Intrapreneurship is a rising concept that tries to gather the natural objective of any organisation in the 21st century to be more innovative with the often non-tapped energy dug into any would-be entrepreneurs. Intrapreneurship create(s) a framework where the latter is granted some freedom to try out a project of his/her own, the benefit being shared with the employer in the case of a successful experimentation.

The… conference, on December 13th, aims to cover this growing trend in corporations’ life, which addresses both the need of companies to produce more innovations and the will of talented people to find achievement opportunities. Experts and representatives of some of the most innovatives companies will share their view on why intrapreneurship is positively impacting their organisation and how they implement it. The conference is designed for human resources managers, chief strategy and chief operating officers, as well as everyone who is interested in the new growing management trends for change.

Ernst & Young has noticed the power of the intrapreneurship trend and, based on recent survey results, offers six guidelines for creating a culture ripe for innovation within larger organizations:

  1. Set up a formal structure for intrapreneurship. Give people enough time away from their “day jobs” to work on creative projects, but provide a formal process for new product development.
  2. Ask for ideas from your employees. They have their fingers on the pulse of the marketplace. Encourage them to contribute to the innovation dialogue.
  3. Assemble and unleash a diverse workforce. It’s no secret that diverse groups come up with more innovative ideas. Tap into this multifaceted source of power.
  4. Design a career path for your intrapreneurs. For the most part, intrapreneurs are mavericks who will quit — and take their best ideas with them — if they don’t see prospects for career advancement.
  5. Explore government incentives for innovation. Ask how these can support your intrapreneurial ventures. Governments all over the world are offering new tax breaks and other incentives for research and development (R&D) — and corporations in turn are urging governments to support innovation.
  6. Prepare for the pitfalls of intrapreneurship. Not all ideas will produce successful new products. Failure is an important part of the process.

Scott Anthony, of Innosight, writing for an HBR blog post earlier this Fall, cited a story of how Medtronic fostered intrapreneurship through a culture of innovation in introducing the Healthy Heart to hospitals. He felt Medtronic had a competitive advantage: 

Medtronic had an internal “corporate catalyst” — someone who marshaled resources both inside and outside the company and built organizational support for the disruptive growth strategy. Medtronic mixed the entrepreneurial approach of a VC-backed start-up with the unique capabilities once housed in corporate labs. Its story illustrates how big companies are powerfully and uniquely suited to tackling large-scale social problems such as hunger, health care, sustainability, and education. These aren’t stand-alone corporate social responsibility efforts — they are strategic initiatives to create profitable businesses that improve the world.

In many ways, Medtronic was applying the E&Y recommended best practices without even having read them. What is your company doing to foster a culture of innovation? Tomorrow, we will tackle the language of intrapreneurship!

 

Traffic Schmaffic – Get Conversions

In the course of advising startups (and some existing clients) on how to gain traction with their business proposition, I ultimately have a conversation about target buyers. Notice the word “buyer” –it is a different word altogether than “shopper” and “viewer.” When we obsess on trying to get web traffic, foot traffic, and the like–but not on conversion–we have lost sight of what is ultimately most important.

If given the choice between 100 website visitors of whom 20 become buyers or 1000 of whom only 15 become buyers, most would actually choose the 1000. Their reasoning would likely be that 1000 impressions is better than 100 and that they hope that the other 985 could be targeted for future conversion or word of mouth marketing. Yet, your business would have 5 fewer sales and a significantly lower conversion rate (1.5% vs 20%). Better, we would argue, to have a high conversion rate, more revenues, enhanced cash flow, and the opportunity to build relationships with five more people.

So much effort is wasted among entrepreneurs to get traffic–and not just in an online sense–that very little is left to think through conversions. Conversions are a better predictor of long term success than impressions. Get this thought into your psyche. It can make the absolute difference between success an failure.

Matthew Toren, founder of Young Entrepreneur, offers the following 5 tips for lead nurturing:

1. Be a problem solver. You have to admit that at least part of business success has to do with the timeliness of your products or services. You must answer people’s needs. The key is settling into a business that has problems you really love to solve, with customers whose pressing needs you are very good at addressing. When you’re able to identify your niche, you don’t only go out there to earn, you have a unique passion and an offering that suits the needs of those people.

2. Get into your customers’ psyche. People buy not only because they need things, they often buy to satisfy something deeper in them. It’s often the feeling they associate with a product that they finally make the decision to buy. Everybody needs a pair of shoes, but not just any shoes can satisfy that need. This is when branding, reputation and customer service come into play. In fact, this is why there is marketing in the first place. Get into what excites and interests your target market. This is the only way you can tailor-fit your campaign to the people who would not think twice of paying for what you have to offer.

3. Where are your customers? In online marketing, determining how your market interacts with the Internet is very important. It gives you leads to “where” they are online. Online behavior can point you to what sites they frequent, the social-media networks they prefer, the news they’re more likely to read and so on. If you know where they are, you can be sure to focus on places you need to have a commanding presence. This assures you of a steady stream of traffic of ready-to-pay customers, and it prevents you from effectively barking up the wrong tree. We all know how costly and time consuming that can be.

4. Do you really know them? To really pinpoint who your target customer is, you’ll want to dig in deep… find out how they tick, if you will. The key is to learn about them, even change with them over time. So basically, this means you can’t just buy one customer list and operate off that in perpetuity. You’ll need to continuously find out about your target audience. Are they reading things you should be reading? Do they shop at stores you’ve never heard of? All of these puzzle pieces could fit together and help you identify the bigger customer picture, if you’re willing to spend time accumulating them.

5. Close in on the deal. Once you know your customers and understanding where they are and how they think, you can specifically design an online marketing campaign that appeals to those people who would love to pay for your products or services. By being a problem solver, you’re forced to know yourself and understand your brand’s strengths and weaknesses. But understanding who you want to engage with online really seals the success of your business.

No Buyer Insight Equals No Innovation

Yesterday, the blog post was on the value of social media inputs in marketing strategy and planning. The core thought was engaging your target market. Once you figure out why consumers like your brand, you can focus on how to give them what they want faster and easier.

Jeff Hoffman, who was on the founding team of both Priceline and Ubid, tells the story of a road trip with the pop wonder band ‘N Sync: (He was in a huge Times Square music store and had the following observation.)

As the CEO of a start-up entertainment company, I was trying to remake the movie Grease with ‘N Sync in the starring role.  And while my friendship with the band didn’t make me one ounce cooler, it did give me a unique view into the inner workings of the music industry. Because of the immense popularity of the band at that time, the owners of the major music store chain were with us in the room.  Watching people come in and out of the giant store to buy music, I asked those owners why they thought people bought music from them.

“To buy CDs,” they told me.  I replied: “I don’t think so.”  

They looked at me like I was nuts.  “Nobody anywhere wants to buy a CD,” I offered.

They responded indignantly. “Do you have any idea how many millions of CDs we sell a year?”

I pushed further, adding, “Nobody in the world wakes up in the morning thinking to themselves, ‘Wow, I wish I was holding a round piece of plastic with a hole in it right now.’  They wake up in the morning thinking, ‘I want to hear that new song in my ear! Right now!’  They have to buy a CD, but what they want is to put a song in their ear.  Right now!” 

Walking away in disgust at my apparent stupidity, the CEO said to me: “What’s the difference?”

Clearly, the CEO did not understand how to give customers what they wanted faster and easier. Napster was the first to try and harness the power of the customer preference, but they ran into legal snags. Apple, through the iTunes brand and a legal approach, came up with  a service, then tied it to a proprietary device and made money on both. In the meantime, record companies and music stores have seen declining margins and top line revenues lost.

Pandora took the iTunes model and provided music on demand. More recently, Spotify began offering streaming music from playlists that consumers could create. Hoffman says that the music chain of stores he was visiting with ‘N Sync in New York City eventually filed for bankruptcy.  Why? Their executive team did not understand why customers came in to buy records.

Take a look at your own situation. Have you clearly identified your business objective and target market?  What motivates your customers?  Hoffman shares that, in the early days of Priceline, when a group of the founding executives and he discussed the fact that they were not selling airline tickets for a living.  Instead, the team saw their “product” as  helping someone get you to a sister’s wedding, at an affordable price.  The difference in perception resulted in an improvement in service.

You too can improve your service by paying better attention to what motivates and engages your target audience. Think through how you can connect with them. How can you make it as easy as possible for them to do business with you instead of the other company? What can you do to help them get what they want faster, at a competitive price?

 

 

 

Does Your Marketing Reflect These 5 Social Media Inputs?

Do you use social media to enhance the customer intelligence of your target market? If not, your marketing is incomplete. Part of establishing a brand is to know what buyers are thinking. What better way to engage than to have a dialogue? Yet, many businesses only have monologues–they don’t listen to what the other party is saying and adjust their conversation accordingly.

When you embrace the power of social media, you tap into the competitive intelligence that enables you to minimize risks associated with media buys, new product development, and misguided sales efforts. As you gather insights into the thoughts of your prospective audience, you are able to make decisions in real time. Molly Gallatin reports an Association of National Advertisers survey which finds that 90% of companies are using social media as part of their digital marketing efforts, but 62% report they are concerned about measuring ROI—indicating at least some difficulty in deriving useful intelligence from their social media efforts.

Gallatin’s article illustrates how you can tie the kind of rich, actionable customer intelligence you can glean from social media into five overarching marketing decisions.

1. Retail Partner Valuation
At Compass Labs, we recently executed a campaign for a major consumer packaged goods brand, in the process unearthing a simple yet extremely significant fact: Its customers had more affinity for one mass market retailer than for others–in fact, much more affinity. The company used this information to drive more sales through that particular retailer by steering more overall advertising dollars its way.

But that’s not the only way that information could have been used. For example, the company could have used the information to build business at a secondary retailer, or it could have used the information to affect pricing and packaging. As it is, that little piece of information paid huge dividends and informed critical decisions.

2. Customer Acquisition Strategies

Especially now that social media networks are connected to ad exchanges and real-time bidding (RTB) technology, brands have access to real-time customer intelligence,  not just to what their fans and followers said about them yesterday. You can get a complete profile of users who are interested in your brand that tells you who they are, what they like, and the things they do. Social intelligence reveals what websites they visit, what events they attend, and their favorite fashion brand.

Use such information to establish a relationship and two-way dialogue with users and acquire them as customers. Rely on your most engaged “fans” as brand advocates and use the interactivity of social to acquire customers through word of mouth. Discover an entirely new segment of users ripe for conversion that extends the audience you initially sought.

Customer acquisition has reached a whole new depth and level of interconnectivity. When considering growth strategies in a tough economy, intelligence you gain from social media is crucial in driving customer segmentation, audience targeting, and even off-social marketing.

3. Brand Sentiment

We’ve been in the middle of the election, and it’s been especially easy to see how brand sentiment can be understood and effectively managed across social media. What’s played out before us is a head-to-head brand battle the likes of which we haven’t seen since Coke and Pepsi’s taste-test wars.

For example, one presidential candidate’s messaging focuses on job creation; the other candidate’s messaging is about lower taxes. Seeing a positive reaction to these different points of view, the candidates’ campaigns immediately positioned messaging around “tax reform” (Romney) and “no off-shoring” (Obama). Don’t think the candidates and their advisors don’t know how these messages play.

This kind of sentiment strategy is not limited to politics. Social media intelligence can feed brand sentiment analysis and enable you to quickly execute your corresponding marketing strategies. On the flip side, negative brand sentiment can also be quickly detected and remedied by harnessing social media as a CRM strategy.

4. Media Placement and Value

You don’t have to guess which media are most effective at engaging your customers. You can track the actions a user takes on Facebook after seeing or clicking on your ad, and attribute off-site conversions to ad views or clicks. This allows you to make creative ad placements and strategically optimize them.

Plus, knowing your engaged audience’s favorite TV shows and websites allows you to take this kind of optimization off-social.

5. Competitive Evaluations

Let’s go back to the retailing analysis that we did for the CPG company, but let’s flip it around and analyze the retailers. If a set of five retailers were in this competitive picture, the retailers themselves could use the natural-language processing technology that drives sophisticated social media intelligence to understand one another’s fan base and social standing.

At the most basic level, each brand’s number of Facebook “likes” serves as a measure of customer engagement. But the retailers could go further and look at actual engagement levels via Facebook’s People Talking About This (PTAT) metric. Comments and shares, different affinity markers, and common interests are some other good ways to measure and predict competitive success.

Market Your Way to the Top

Businesses who are ineffective in conveying their mission and product offering  to the marketplace simply cannot effective and efficient enough to wring profits out of insufficient revenues. Image may not be everything, but it can mean a great deal in terms of buyer perceptions that influence purchasing decisions. Clearly, not every business can be recognized as the “best in category.” However, you can continuously improve your market position by marketing and positioning your company as one that fulfills its mission and satisfies customers. The public must know your company and its offering!

Name Recognition

One goal for keeping a business strong in its marketing efforts is to increase name recognition. Keeping the company–and often one or more of its top executives–in front of the local “players” (centers of influence who will talk you up) can provide tremendous benefits; when these individuals refer or bring a client to you, it is because they:

  • know you,
  • know your reputation, and
  • trust you to do a good job for their friend(s).

Other means of getting the word out include building a thought leadership role through public speaking. If you are not the type who enjoys standing in front of a room and attempting to engage them in a conversation, you may be more comfortable as a panelist or panel facilitator. Through active participation in community groups, you are afforded a unique opportunity to discuss your company’s success and how your core values, product offerings, and service standards are opportune for the listener or someone they know. 

Customer Research

The customer must be researched continually, paying particular attention to discriminating tastes and preferences. Your sales team should be your best source of information as to what buyers seek. Research reports should compile information gathered from key figures in your community–those “centers of influence” who are gateways to networks of potential buyers for you. Study what you find out with an eye towards possible adjustments in product offerings as quickly as possible; the key here is to beat competitors to the punch. When you meet new prospects, ask them questions about what they like, try to keep a running tab of demographic trends about them, and find out what may be holding them back from purchasing from you.

Marketing Trends

Attend industry meetings for either your vertical market or the markets in which your customers are likely to hang out–better yet–do both! Stay abreast of trends in the market, listening carefully for changes in design, pricing, or delivery. This information can serve as a launching point for later team discussion back at the office of how to “up your game.” On at least a quarterly basis, someone should “shop” the competition, pay attention to how they operate and promote, so you can glean strategic insights. Chances are high that, armed with better information, you will make significantly better decisions!

Weighing the Competition

Ask your management team what they hear about competitors from suppliers, attorneys, CPAs, banks, and the like. It can be very helpful to keep spreadsheets listing others’ products, price points, features, and promotional incentives. By monitoring these over time, your team begins to get a feel for where the competition feels the market is moving–and you can adjust your own planning accordingly. Try to figure out how many employees your rivals have, as well as their real estate expenses, number of sales or distribution arrangements, and other key metrics. Watching these statistics from one measurement period to another can provide you with opportunities to win market share. When you have a feel for what obligations the other guy has, you can estimate their break even point, which translates into pricing policies, potential availability of financing, and many other factors critical to your success!