CMO

Positioning the Underdog: T-Mobile as a Concept Company

With the recent success of T-Mobile, it's hard to believe it wasn't that long ago that T-Mobile was left for dead - a deteriorating asset waiting for someone like AT&T, Dish or Softbank/Sprint to pick up. It was losing customers thanks to no iPhone at the time, and its network infrastructure was late to the LTE game. Today, T-Mobile is the number three wireless carrier in the US, having just surpassed Sprint in the number of subscribers. It's worth taking a look at what they did from a strategy and positioning point of view.

Why strategy and positioning? A company's position is tightly coupled with a company's strategy and operations. Without that tie, a position lacks credibility from the inability of a company to deliver on its promise. Comcast has announced that it wants to be a "customer-focused" company, but given its organizational structure and internal incentives to reduce churn, Comcast has thus far been incapable of delivering on that message. Customer focus is not in Comcast’s DNA.

When we help reposition companies, we use a Company DNA framework to assess its ability to deliver on its differentiation. In our collective experience, we have found that technology companies can be categorized in one of three ways — Product, Customer and Concept — and each can be differentiated in one of two ways.

  • For a Product company, it's about features or value.
  • For a Customer company, experience or segmentation.
  • For a Concept, it's category creation or cult of personality.

All companies have aspects of these three categories, but only one can be a dominant personality. As a former client noted, DNA is the "first impression you give when you meet for the first time" (thanks Arkady).

T-Mobile decided that the only way it could win was by becoming a Concept company. In March 2013, T-Mobile launched its Uncarrier effort to position itself against the Big Two wireless carriers (Verizon and AT&T). The face of this effort is CEO John Legere, who has adopted a straight-talking customer hero persona that T-Mobile die-hards have embraced.

What's interesting is that T-Mobile executives made that conclusion earlier, but they didn't have the leadership with the right DNA to match until Legere took the job as CEO.

It was equally important to make radical changes to its products and services to credibly deliver on a Concept differentiation - no contract plans, unique phone payment plans, etc. These are changes that Verizon and AT&T had no choice but tofollow.

In many industries, but especially in tech, success is often times measured in marketshare. You could argue that if T-Mobile were really that successful, it should be #1 in marketshare, right? Actually, no. Concept companies are out there to change the world, and success is measured in how many believers you've acquired and what kind of outsized impact you've made to the world.

Has T-Mobile’s repositioning been a success? Absolutely.

Growth Hacking and the Philosopher’s Stone

Growth HackingThe search for the philosopher’s stone has confounded some of the world’s brightest minds for centuries. Alchemists, from as far back as the 8th-century, have longed for the day when they would be able to mix the right ingredients, in the right way, to create a stone that would not only turn commonplace metals into gold but would render its owner immortal.

Just like the alchemists of the past, today’s marketers are constantly on the hunt for a recipe of tactics that, when combined in the right order, will create a whirlwind of viral growth that accelerates revenue and generates eternal success.

This idea of using low-cost tactics to achieve expectation-shattering revenue is frequently known as “growth hacking.” It’s a buzz phrase that will light up a CMO’s eyes. But, while it is easy to understand why a company wants to integrate growth hacking techniques, few leaders truly know exactly what recipe will achieve alchemic-level results.

Because, unlike the practice of alchemy, which predicted that any person could be victorious by using the same recipe, successful growth hacking is distinctly unique to each and every organization. It can rarely be achieved by reusing the exact formula of another.

So, if there is no universal recipe for achieving viral growth, where do you start in the hunt for revenue gold and organizational immortality?

Download the rest of the ‘Growth Hacking and the Philosopher’s Stone’ whitepaper to learn how you can successfully craft and implement growth hacking campaigns into your digital strategy.

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Jobs to be Done? It's All About Substitutes

img.phpWhen thinking about who your real competition is, it is helpful to step back and think broadly about all the different ways that the problem you're addressing can be solved. Clay Christensen and his disciples have come up with a framework - Jobs to be Done - and are trying to create a movement around this concept to help understand the competitive environment and how to refine products. They've even created their own hashtag - #JTBD - on Twitter to engage others in the conversation. But is it really that new?

To me, this is just a reformulation of the economics concept of a substitute (let's skip the math for now). The challenge for people in technology is that they tend to consider only perfect substitutes - competition that looks, smells and tastes like them - instead of stepping back and considering gross (or net) substitutes. To me, that's all this "jobs to be done" stuff is about - what are other ways that people are going about solving their problems?

A good example of this is when I was at a client discussing the merit of spending marketing dollars to promote a marquee feature of a product - photo sharing - that no one was using. When I asked the product manager who the competition was for this feature, he immediately started listing all the products in their space - little black boxes that were networked-enabled and had storage options.

The real answer was Facebook and Instagram (and now Google, Apple and Dropbox, among others). The product manager didn't step back to understand what are the real alternatives (the substitutes) for the act of storing and sharing photos with others rather than just other consumer electronics that have some photo sharing capabilities (or not).

No amount of "marketing" to promote this feature would have helped. Consumers already left this feature behind, which is why there was no adoption.

So, as a product manager, it is important to understand not only what a feature does, but also why it should exist and how it solves a problem in a way that's better than what they do today in general. Step out of your own space and look around. And if you need the #JTBD framework to help you, that's fine. You should be thinking that way anyway.

Experiment Traps: 5 signs that your business experiment isn’t actually an experiment at all

Part of SeriesC’s Statistically Speaking series Over the past 40 years, the Harvard Business Review (HBR) has studied how companies conduct business experimentation and they often find that companies fail to learn from their tests because they never adopt the true discipline of experimentation.

Using J.C. Penney’s costly and disastrous 2012 overhaul as a key example, HBR pointed out that ­– had CEO Ron Johnson established a proper set of experiments to test his ideas to do away with coupons, double down on upscale brands, and use technology to eliminate cash registers – he might have discovered how customers would revolt and push store sales down by 44% that year.

Too often these days we hear business leaders in CEO and CMO roles declare that they need to “test their hypothesis” or “run an experiment” in hopes of discovering whether a new business model or product will succeed. The trouble is, they don’t actually form solid hypotheses or conduct experiments correctly. The right way to experiment involves five scientifically sound steps: form a specific hypothesis, identify the precise independent and dependent variables, conduct controlled tests in which you can manipulate the independent variable, and then do careful observation and analysis of the effects, leading you to actionable insights. If you follow the steps, they’ll always present you with a valuable answer. So, where do many seemingly smart companies go wrong when it comes to business experimentation?

HBR posits that businesses can fall down at various stages when running a business experiment. Here, we’ve taken HBR’s Checklist for Running a Business Experiment and included what we’re calling Experiment Traps that you should recognize and avoid throughout the process:

  1. Purpose – HBR asks: Does the experiment have a clear purpose?
    1. The Hypothesis Hypocrisy Trap – did you and your management team agree that a test was the best path forward? Why? Is your hypothesis specific and straightforward (A good hypothesis clearly identifies what you think will happen based on your "educated guess" ­– what you already know and what you have already learned from your research)? If not, you’ve already fallen into the biggest experiment trap: Hypothesis Hypocrisy
  2. Buy-in – HBR asks: Have stakeholders made a commitment to abide by the results?
    1. The Cherry-Picking Trap – are you entering into this experiment equally prepared to be delighted or disappointed in the results? Will you avoid the temptation to cherry pick results that support your preformed ideas? Avoid this trap by sitting down and agreeing how your company will proceed once the results come in. If you see the experiment as part of a larger learning agenda that supports the company’s overall strategy, then you’re off on the right foot.
  3. Feasibility – HBR asks: Is the experiment doable?
    1. The Unsound Trap – HBR says “experiments must have testable predictions” but complex business variables and interactions or ‘causal density’ can “make it extremely difficult to determine cause-and-effect relationships.” Avoid this trap by knowing your numbers. Start by figuring out if you have a sample size large enough to average out all the variables you’re not interested in. Without the right sample size, your experiment won’t be statistically valid. Engage SeriesC’s analytics team to help you determine the right sample size for your experiment.
  4. Reliability – HBR asks: How can we ensure reliable results?
    1. The Corner Cutting Trap – when conducting your experiment you’ll be faced with challenges of time and cost and other real-world factors that can affect the reliability of your test. Resist the pull to cut corners by adopting proven methods from the medical field, like randomization, control groups and blind testing, saving you time in the design of your experiment and producing more reliable results. Or tap into big data to augment your experiment so you can better filter out statistical noise and minimize uncertainty.
  5. Value – HBR asks: Have we gotten the most value out of the experiment?
    1. The Wrong Impression Trap – don’t go to the trouble of conducting an experiment without considering and studying not only the correlations – the relationship between one variable and another – but also the causality. Causality helps us to understand the connectedness of certain causes and effects that usually aren’t as immediately obvious. Make sure to spend just as much time analyzing the data from your experiment as you did setting it up and executing it.

The bottom line: why go with gut and intuition and past experiences that aren’t apples-to-apples when you could be informed by relevant and tested knowledge? Steer clear of these experiment traps in your process and you’ll avoid inefficiency, unnecessary costs, and useless results. Embrace the proper process and you’ll learn something valuable, increasing your chances of success. Statistically speaking.

Avoid these experiment traps

Growth-Stage Start-ups: Aligning Your IT and Marketing Needs Now

In August 2013, Accenture published a detailed report titled "The CMO-CIO Disconnect," about the importance of marketers and information leaders collaborating, and the un-stellar level to which they're doing that in enterprises today.  Enterprise marketing leaders and CIOs at the U.S.' largest 2,000 companies probably gobbled up the report. I would bet, though, that very few CEOs of growth-stage tech start-ups have paid any attention to it. It's not marketed to them, not considered relevant. They probably don't even have CMOs or CIOs yet.  Listen up, entrepreneurs. You should pay attention to the report. Its wisdom is absolutely relevant to you.

Here's why: A CEO of a growing tech start-up has all of the upside to gain from aligning IT and marketing interests early in the company's evolution -- combined with none of the legacy baggage that makes the alignment difficult to achieve. Start-ups enjoy a nimble agility that enterprises don't have. Only 1 in 10 enterprise marketing and IT executives interviewed by Accenture say the level of collaboration is where it needs to be. You want to disrupt a larger competitor as you vault your company through its growth phase? Knock this alignment out of the park from today forward.

Let me summarize the three strategic imperatives from the report that strike me as most relevant to CEOs of start-ups, especially if there's no CMO or CIO in your company yet.

1. "Identify your CMO as your Chief Experience Officer. "

Okay, so you don't have a CMO yet. That's fine.... as long as the CEO -- or someone -- is passionately stewarding the quality of your customers' and partners' experience in using and interacting with your company and its products.  Who is looking out for things like:

    • how easy it is to find what you have, understand it, try it, and buy it?
    • how easy it is to use it, from the day of purchase until it's time to replace it with something else?
    • how easy it is to support and sell it, and to collaborate with you, for your channel partners?
    • how easy it is to transact and collaborate with you, for your supply chain partners?
    • how these external stakeholders' point of view is represented in your brand, your communications, your strategic decisions?

If no one in your company owns this critical function today, get it assigned, preferably to someone who brings a passionate point of view to it. (The responsibility can get passed down to a marketing leader later in your evolution.) Then, move on to the second bullet point below.

2. "Agree on key business levers for marketing and IT alignment."

In other words, decide what drivers will govern who prevails if marketing and IT have conflicting needs.  This may seem far ahead of where you are if you're a growth-stage start-up, but you're designing now the architecture that is going to become your "legacy" later -- with all its benefits and limitations. Anticipate that IT and marketing conflict will tend to converge most at two intersections:

1) Where marketing's need for transparency of customer and company data will intersect with IT's need for information security.

2) Where marketing's need for third-party, best-at-what-it-does software intersects with IT's need to control system standards and protect the sanctity of its infrastructure.

Here are some questions your CEO and leadership team can ask yourselves today, to ensure what you're building will meet your needs as you scale and reap new and loyal customers and partners:

    • What kind of customer data, and how much, will our company eventually need to exploit to gain new customers and keep existing customers? To deliver on that great experience we're designing for them?
    • What kind of company data will our company eventually need to make transparent in order to support the ideal experience we are creating for  our customers, channel partners, and supply chain partners?
    • What third-party software demands are we going to have in marketing this business -- keeping in mind things like mobile marketing and mobile service delivery, mobile payments, targeted marketing campaigns, customer relationship management, information management, etc? How will emerging trends like NFC and biometrics impact these needs?
    • Given the countries in which our target market exists, what kinds of data security and consumer privacy legislation are we subject to? How is the legislation evolving in these countries?
    • Where do we fall on the spectrum of conservative to aggressive when it comes to data privacy and infrastructure standards? Are we certain we can scale, market, and interact with customers and partners effectively and profitably given our answer?

3. "Change the skill mix to ensure that both organizations are more marketing- and tech-savvy."

This one's easy to adapt to growth-stage tech startups. Just change the sentence to read: "Hire people who are both marketing- and tech-savvy."  Be smart. Build the team right from the ground up.

When it's time to bring on a CIO or similar functional leader, ask candidates for their point of view on how their job intersects with marketing needs. Ask them for their point of view on how digital marketing is most effectively enabled, and what it might look like within your organization.

When it's time to bring on a marketing leader, ask candidates what they need from their IT partners in the organization.  Ask them for their point of view on how the balance should be struck between data access and information security.

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You can download and read the full Accenture report here, if you want to know what other recommendations .... and the data that shows how your enterprise (future) competitors are performing against them.