Echo Chamber Marketing

While you may have many happy customers, you can rest assured that every unhappy potential customer and past customer is going to your competitors and telling them how awful you are. You just don’t know it.

No matter how many tech companies we talk to we are constantly amazed at how many believe the exact same thing about two issues.

1. Customer satisfaction


2. Technical superiority

In issue one they believe that their customers are, collectively, more happy with their service and technology than with their competitors’; that their competitors are widely hated by their own customer base; and that their competitors, even those that no longer exist and all that are going to be are incompetent boobs.

In issue two they believe that customers see their contribution as the “secret sauce” behind the customers’ end products (e.g. “Our chip makes their mobile phone the fastest/lowest power/most versatile mobile phone ever). But that contribution is considered to be a “competitive advantage” by their customers and, therefore, the customers do not want to be identified or quoted.

Reality, however, is not as clear cut.

Reality check #1: There are incompetent people in every company and they annoy customers, some to the point that a customer will drop a product or service simply because they are annoying. But if the product or service provided gives them what they want at the price they are willing to pay, they will put up with the annoyance and incompetence. Any company that demonstrates incompetence, bad products and poor customer service will cease to exist. So if your competitor is still in business then they are doing something right.

While you may have many happy customers, you can rest assured that every unhappy potential customer and past customer is going to your competitors and telling them how awful you are. You just don’t know it.

Reality check #2: Every company we talked to in the past 20 years has told us, “off the record”, that they are providing products and services to a very large customer, or selling products and services to a vendor who is selling products to a very large customer. But at the same time, they say they are not allowed to publicly mention that customer or vendor because they are considered a “competitive advantage.” Every. Single. One.

We have found that smaller customers are generally more willing to give endorsements because it gives them attention in the marketplace, but we have also found that the companies we talk to prefer to talk only about the customers that they cannot publicly talk about.

So in both cases, their claims of customer satisfaction and technical superiority are unprovable.

This is what we call echo chamber marketing.

In their defense it is the only option they have because they really don’t know what the market is saying about them, or even if the glowing reports they get from their customers is anything more than polite conversation and a means to get a price cut for the next round. We have also noted that most of these companies have significant outstanding invoices on the books that have yet to be paid by their “happy” customers and when they threaten to withhold service or delivery the customer immediately calls a competitor. So how “happy” are they, really.

It does not have to be this way.

There are several tools and services that can get you honest feedback from your current and potential customer bases. There are ways to encourage customers who are truly satisfied with you to state so publicly. The choice is yours: Survive as long as you can in your self-built echo chamber, or learn how to thrive in the real world.

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There's media, then there's media, part 5

We've looked at content for purchase content, owned content and social content in the previous posts and we're getting close to the end of our series.  Today we look at the reality and difficulty of earned content.

This is why earned media is so valuable.

The chart indicates relative costs and effort that go into the various forms of content and how the market audience views those various forms. Paid content (advertising) is the most expensive of all media and requires the least amount of effort but is the least trustworthy.  Owned content costs less and takes about more effort but us not viewed with the same level of suspicion, generally because there is a level of human contact involved.  Social content takes more effort but even less cost than owned because you can do it even without a website. Social begins to cross the trust barrier because objective third parties may have the opportunity to state their position... if social is done right.  Most of the time it isn't, which is why it is still in the untrustworthy realm.

Earned content alone resides primarily in the trustworthy realm.  Even people who don't trust the press will refer to a magazine, newspaper, broadcast on online site for information before they will visit a corporate site or advertisement.  As we have said in previous posts, press releases are not earned content, nor are rewritten press releases even if they are published.  The best they can be are owned and owned isn't trustworthy.

Earned content is the most valuable of all content in your communications arsenal.  You don't produce it, you don't control it and you pay relatively nothing for it.  Earned content is created by journalists, no one else.  It is as objective as a human being can be, it is independent, it is the most trusted of all, and it takes enormous effort and/or time for it to become reality because it require developing trusted relationships with the third party journalists.

However, because you can't control it, it can't be considered a strategic effort.  A press release that goes through the marketing effort is packed with cliches, buzzwords and superlatives and, with some luck, may include a nugget or two of information interesting to a journalist.  It may or may not stay in his files or floating in the back of his head until he has enough information to put together an interesting story.  Or it may or may not get rewritten into a small blurb on his publication.  In the least, the publication may just post the release in it's entirety.  You won't know what will happen for sure until you see it published.  It is hard to build a strategic plan with all that uncertainty, but why is it so hard?

Because most companies and publicists really don't understand how a journalist's mind works.  Most companies are nose-deep in their own marketing committee discussions and cannot see beyond their own messaging.  They may think they have looked at all the possibilities and come up with something unique, but the journalist they are trying to reach really does see more than the marketers do.  And even with their perspective, most of them are just taking educated guesses as to what the reality is, simply because they have far too much information to process and not enough time to do more than they already are. 

So while earned media is the most valuable content you can get for your company, it can be harder to find than gold in the Sierras, which is why so many companies never even attempt to make a decent effort to get it.

 That doesn't mean, however, that getting it cannot become a strategic effort.  And that's what we will talk about next.

That Toyota mess? That's on me

It's time to fess up.  All the problems with the Toyota Prius brake and acceleration systems are my fault.  Let me explain.

A few years ago I was a PR consultant to VaST Systems who made virtualization technology allowing engineers to simultaneously test and modify hardware and software designs prior to prototyping and manufacture.  Shortly before I came on board, EE Times did a teardown of the Prius at the 2007 Embedded Systems Conference and one of the small bits of the discussion was how VaST Systems tools were used to build the engine control systems of the 2006 models.  VaST was very proud of this fact and as a result, they turned a lion's share of their concerns to automotive systems development.  Toyota was a marquee customer that th mentioned in all their presentations.

Through most of my tenure with the company I regularly but softly recommended that improved safety and reliability should be front and foremost in their presentations, but the reality was that the message was a throw away point.  Most of the presentations were focused on time to market, and product quality and making engineers' jobs easier, which is pretty much the same thing that everyone else discusses in the semiconductor/hardware industries.   I let it go because, after all, the client is always right, aren't they?

In 2008, however, the automotive market starting hitting the skids and everyone was cost cutting, even high-flying Toyota.  Among the cuts were purchases of design tool licenses, including VaST which devastated a lot of the companies in VaST's niche, including CoWare and Synopsys' Virtio.  My relationship with VaST was discontinued in April 2008 and I had failed to win my point about the importance of safety and the bottom line.  This is my understanding of what transpired after that point.

(NOTE:  I know the publicized accelerator problems were mechanical, not electronic in nature, but subsequent recalls have been based on electronic/software issues, especially after Steve Wozniak himself brought the issue forward)

For 2008 and 2009 Toyota made do without the VaST technology as cost cutting became the important issue. Yes it made the engineering easier, but engineers get paid pretty well so they need to work a little harder, don't you think?  That would turn out to be the years for the development of the 2009 and 2010 models.  Just a few weeks ago, VaST was sold at an undisclosed (and apparently very low price), along with CoWare to Synopsys giving the latter a virtual stranglehold on the entire market.

I say all this and take responsibility for what happened because I want to make a point.  Some people want to know why I seem so angry and confrontational about the changes in media and communication paradigms.  This situation with the Prius is why.

As professional communicators, we have a responsibility to look beyond the trite marketing messages and ancient sales philosophies that our clients and employers cling to and see to the real potential, both good and bad, of what they are creating.  We are the people that create the vision and if we don't have it, people can die.  

I'm not being over dramatic here.  Take a look at what is playing out on Capitol Hill this week.  Look at the pictures of the charred wrecks.  Toyota could have avoided this if they had the right tools for the job, and maybe they were short sighted, but the message that was given to them was that we could make their jobs easier and maybe make their products cheaper, but we just don't have the research in hand to prove that last point... so let's just go with it makes an engineer's job easier.

The research that needs to be done to prove the hard bottom-line and human safety of the systems rolling out the door is done by marketing and communications people.  If companies don't want to invest in that kind of effort, that's on them, but as professionals in the business we need to make them understand what kind of hell they may be unleashing if they do.  And we need to be ready to walk away if they won't listen.

Synopsys now has that responsibility.  They have the technology to stop this thing from happening again, and it is the responsibility of the marketing people to find the right message and It isn't time to market and it isn't ROI. I have every confidence in their ability to do exactly what needs to be done.  But I reiterate: People's lives depend on it.

What we do is neither inconsequential nor should it be done on the cheap.

I'm taking some days off next week.  This has been a marathon week because the world is changing faster than I can type.   I'll leave you with an often unremembered quote from Peter Drucker:

"Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."

Macro/micromedia

I want to write something about Twitter... and a lot of other stuff, but before I do I have to establish a concept that I've come up with.

This blog has always been about the concept of mass media: what it is, how it's used, where it's going.  We all pretty much know that mass media is information sent to large groups of people and we identify it in traditional forms of broadcast and print.  Sometimes we look at Google, Yahoo, Bing and any other kind of search engine as a threat to mass media, but in reality it is just another form of it.  Google still pushes out a bunch of information to a munch of people so it is still mass media.

What makes online mass media the same as traditional media is that the goal is to get a response from 1 percent of the audience.  For example, in EDA, if you sent out a bit of communication to an audience of 10,000 people and you got 100 leads and maybe one sale, you would have more than paid for the effort.

But social networks are also a form of mass media, although different from search engines.  The difference is that while they are still putting out information to groups of people, the groups can be only a small percentage of the total audience of the niche and be more successful than even a Google campaign.  Why? Because the social network audience is not made up of the whole audience, but the RIGHT portion of the audience or, specifically, the 100 leads you would have gotten from the original 10,000.

Social media is an entire different segment of mass media from traditional media.  The rules are different, the practice is different, the success rates are different and in order to do it right you have to do it completely different than traditional media campaigns.  So I'm creating two separate divisions of mass media that I'm calling macromedia and microcmedia.

The macro division includes print, broadcast, website and search engine practices.  The micro division refers to Facebook, Linkedin, Google Buzz, blogs, status sites (Twitter).  I'm going to leave this at the front of State of the Media for a while for reference, but we're going to camp out here for a while.

Why you don't (or do) like social media, part 2

As I said in part one a few weeks ago, Social media attacks the tradition mass communication paradigm with a natural flow of communication, which is why marketers and journalists often chafe at embracing the practice.  What I've seen happening through this paradigm shift (geez, I never thought I'd hear that phrase again) is the rise of the value of talented, trained and experienced communicators within corporations and organizations that are making an effort to figure this stuff out.  That probably doesn't include your company, though.

I was describing what is happening in social media to a friend who has no connection with high tech (they do exist, you know).  He thought a bit and then said, "Sounds like their going at it like they're killin' chickens."  It was a great analogy.  When you slaughter chickens (and yes, I have done this) it involves a lot of running about, noise, flyiing feathers and blood.  Total chaos.  And when you sit down to eat them, you wonder if it was worth the effort.

That well describes how most companies are going after social media.  Chaos. It looks like it might be important, but at the end of the day you have to wonder, was it worth the effort.The reason for the buyer's remorse is that most companies are still trying to apply to old paradigm's interpretation of media to the new paradigm's infrastructure.  And it doesn't work.

Most corporate communications involves a bunch of people sitting in a room with a white board and trying to figure out "messages" that will convince customers to buy their stuff.  David Scott Meerman calls it an MST (making stuff up) meeting.  That is translated into news releases, brochures, white papers, press pitches, trade show signage, etc.  Then when it doesn't work they call the customer stupid or fire the PR agency.

Social media steps into this mess and says, "Hey, why don't we ask the customer what he thinks."  This concept is completely foreign to most marketing people, and anathema to the sales people.  Remember, the customer is stupid.

But companies that adopt the attitude of listening to, rather than talking at the customer... they're the ones that go at social media the right way. The bottom line is that those customers understand that social media is more than another communication medium, it is a way of communicating.  Until you understand that, your social media effort will resemble an abattoir more than a virtual marketplace.

Happy Thanksgiving, BTW.

The king is not dead... but he's not feeling too well

Had a real surprise this weekend when I got the New Tech Press web metrics for the past week (yes, it's doing quite well, thank you).  I got to the end to see where most of the referrals came from and had to sit down for a minute.

About 30 percent of the traffic on NTP comes from referrals, like blog posters mentioning the article or the site and, of course, web searches.  For most of the past year, most of the referrals came from Google, which is no big surprise.  That changed after Microsoft launched Bing last month.  

I started noticing that more and more visits were being referred to NTP through Bing almost immediately, but last week, the final result was that Bing referrals were twice Google's.

I have no idea why this is so, but I do know that the searches are for subjects in my metatags and keywords and when people are searching for news on EDA, semiconductors, green technology, they are being referred to NTP through Bing, more often than through Google.

Anyone who knows me knows I am not a big fan of Microsoft, but from a purely selfish perspective, I have to take my hat of to Bill's team.  They are really helping me out.

Revelation: Communication does not belong in marketing

I just attended a joint meeting or the Project Management Institute (PMI) Marketing and Sales SIG, Marketing Operations Partners, (MOP) and the Marketing Operations Cross Company Alliance (MOCCA) on the subject of the future ... of the marketing operations field (just in case you were wondering.)  It was, in a word, revelatory.

PMI has realized that a great deal of the input and output of marketing and sales is not organized, but has a significant impact on it's own resources, especially with the growth of social media.  The IT departments of companies are most heavily impacted with the development and maintenance of dynamic websites featuring blogs, video and audio podcasts, forums and customer services.  They formed the Marketing and Sales SIG to get some insight into the issue and reached out MOP and MOCCA to get some clarity and direction on the issue.  What came out of the two-hour session was a dynamic proposal to establish a marketing operations forum, seeking input from all over the communications industry to establish best practices and ... well all the stuff organization like that do.

What came out of it most particularly for me was that I have been talking to the wrong people in trying to expand my business.  I should not be talking to marketing executives but to project and IT management.

Most marketing people, especially in the tech world, don't really know what to measure to determine ROI on the marketing programs.  And if they do measure something it is a useless measurement like how many news releases they put out in a year and how many web hits they got.  What's more, they don't really want to add the process of determining real measurement parameters to their already heavy workload ... not to mention the budget cost.

The IT world, on the other hand, is given the responsibility of creating and maintaining most companies' most important communication tool: the website and is given no authority to determine how best to implement it.  It's like giving a contractor materials and tools and saying "Build me something.  We'll figure out what later."

So it hit me about a third of the way through the discussion.  What my company does would be of more value to the IT department than to the marketing department.  Marketers want data about the market and the customers to pass on to sales and their measurement is what sales brings in.  The IT department wants to create a communications infrastructure and their measurement of success is determined by the value the marketing department puts on the information.  But the marketing department doesn't know what kind of information would actually be valuable so they can't give direction to the IT department.  Someone like me knows exactly what kind of information is needed but can't get the marketing department to give up any budget to do it because they don't know what I can help them produce, but the IT department knows it needs to produce data and budgets specifically to produce data, all it needs to know is what kind.

It's a revolutionary concept: taking the communications function out of marketing, but in a world where the internet is the media, communications programs and IT is a marriage made in heaven.

Broken media equals funding doldrums

About three years ago I attended a financial conference where a big VC stated, categorically, that the reason they were not investing in semiconductor or EDA startups was because there was a lack of informational coverage to validate research.  In other words, because media coverage of the industries had significantly degraded, they couldn't afford to pull the trigger on investment.

This same VC firm has invested heavily in Web 2.0 and green technology over the past three years and you can see why.  There is lots of coverage on those areas.  There is pretty much nothing but coverage on those areas.  The only coverage on semi and EDA is negative.

You might say that that is the media's fault because, after all, the semiconductor coverage is all about the economics of the industry, not the technology so it's naturally going to be bad.  But I would like to point out that the the green Web 2.0 industries has yet to turn a profit, yet the media continues to go bonkers over the technology.  What's the big difference?  Which industries invest more in getting their story out?

I know, I'm a broken record.  But this time I have a case study.

I've been working with a start-up in the semi arena for a few months now helping them craft their message and get a communications program going for them as soon as they get funding.  I've also been introducing them to VCs to get that funding.  We had a lead investor all ready to go.  They got great feedback from current customers.  Dataquest and IC Insights show real growth potential for this particular technology over the next 18 months and beyond  ... but the rest of the players in the market haven't put out anything innovative in five years and they look like they are cutting back even further.  There is no media outreach in the sector so, as a result, the only buzz is negative.  Even with all the numbers lining up for success, negative buzz made the VCs back off.  They still want to invest, but they don't want to take the lead.

There are many similar stories out there.  Investors are lined up and ready to invest in technology outside of Web 2.0 and green, but not as a lead investors.  All because of a a lack of media.

What about all the bloggers covering the semi sector?  Well, here's the thing: the VCs haven't yet come over to the blogosphere, even when they invest in it.  That's going to take some education still.  And education requires some investment in media.  Funny how that works, isn't it?

Tell them what they want to hear and they will listen to what you have to say

The cornerstone of the VComm program was the understanding
that most companies looking for VC financing really have no idea what a VC
wants to hear.  Two years ago I sat
with a group of investors at a major conference and listened to them complain
about the quality of the material and, in the end, how useless it was.

Understand this: 
There are, at any given time according to Dow Jones, 5000 tech startups
in the US alone that are seeking funding. 
But less than half of those companies have any credible research into
their technology market.  The press
covering those markets has shrunk almost to the point of non-existence.  The VC's are flying blind nowadays,
which explains why so many are having poor returns.  What they need is real information about market potential.

But most companies pitching VC's spend 90 percent of their
time in front of them explaining how great their technology is.  Get a clue!  They know you are doing something interesting or you
wouldn't be doing it.  What they
want to know is, if they invest in you, how are they going to make a return on
their investment.  Drew Lanza at
Morgenthaler puts it specifically: "How am I gonna make a bunch of money
for retired school teachers?" 
(Think about it.  Most large
investment firms are responsible for investing the retirement funds for common
people.  They have an enormous
responsibility.)

So the purpose of VComm, at the core, is to prepare
companies to present the information that the VCs NEED to hear.  Once you have told them that, then they
will be willing to listen about your technology.  Based on the comments we got back from the investors at
VComm, that's exactly what we accomplished.  Lanza even said the presenters were ready to make an initial
presentation before the assembled partners of Morgenthaler.  That doesn’t mean they are going to get
that chance, but how they get to that point is the subject of another post.

What I want to leave you with is another point that I have
been hammering for a decade is: KNOW YOUR AUDIENCE.  If you really have that knowledge you will make progress in
your communications, if you don't you are dead in the water.