Personal Brand

I’ve been thinking about this a lot recently after reading a blog by Mark Suster where he argues that if you don’t define your personal brand, someone else will. He’s absolutely right, it happens all the time and doing an MBA changes the way that you and other people perceive your brand. After reading the article I tried to remember back to the last time I actually stated my brand and for me, pretty much the only time I do it regularly and explicitly is when someone asks “So what do you do?”

When you answer this question, the person you are talking to puts you in a mental box: “that guy’s an engineer” or “she’s in finance”. That then gets packaged up with whatever preconceptions that person has about the box they’ve put you in “that guy’s an engineer; he must be socially incompetent” or “she’s in finance; she must be totally focused on money”. I might be focusing on the negative here, it could quite easily be “that guy’s an engineer; my dad was an engineer and he was awesome” but the outcome is the same. You, as the speaker, have almost no control over the impression you will leave.

This freaks me out a little and it stops me from actually telling people what I am. I want to say “I’m an entrepreneur who started an engineering company with a couple of buddies which went OK, then started a couple more businesses that didn’t go so well. I didn’t do much engineering (because the other guys are better at it than I am) so I filled in the gaps to let them do their jobs better (sales, marketing, accounting etc.) and our businesses didn’t fail because the engineering was wrong, they failed because of everything else so I went to school to learn some skills so I won’t screw up as badly next time and now I’m a student.”

But I don’t. Not just because it’s a bit of a mouthful but also because it’s not going to create the kind of first impression that I want. So how do you get around that?

It comes down to the message you want to communicate. The easiest way to stop being put in a box is to give people an answer they don’t have a box for (some people who have written on this topic before me have suggested things like: “I’m a pirate” or “I run around in circles waving my arms a lot” which gets a giggle but really doesn’t solve the problem). Some people deflect the conversation by stating who they work for rather than what they do (I work for Nike) to create a good impression but that doesn’t tell me who you are unless you’re the personal embodiment of Nike, and a certainly hope you’re not!

And back we come to personal branding: How do you want the world to perceive you? When I read through what I’d like to say but don’t there are three themes that I’m trying to get across.

1. How do I add value? I make other people better. This can be as simple as getting the little stuff done so that they can concentrate on their job and as complex as diagnosing when someone doesn’t have the skills that are needed for the task and can’t ask for help so you have to intervene so that the job gets done but the person doesn’t feel bad about the way that it went.
2. I am disruptive. Anyone who’s sat in a class with me knows I can’t keep my mouth shut, I believe that education is participatory experience, if you don’t challenge what’s being proposed then you’re going to fall for any old crap that someone pushes at you. This extends to my professional life as well, I love technology for it’s ability to completely change the landscape of an industry. It’s one of the big drivers behind my push into 3D printing. Change is amazing!
3. I like to learn. I’ve always been surrounded by people who value education (my parents, my brother, several cousins and many of my friends are teachers or in academia). This has led me to sign up for MOOC’s, use codecademy and spend at least an hour a day to reading blogs and education sites (I’d recommend the conversation, macrobusiness, hack-a-day and seth godin’s blog as a great range of interesting reads that you can digest quickly on a mobile device in between whatever you are doing). I’m interested in stuff.

Distilling this down, I can turn it into three key messages:

• I make others better
• I am disruptive
• I want to learn

How this ties back to the MBA is that I feel a bit like that about being a student. If I say I’m a student to someone, they look at me and think; here’s guy in his 30’s who’s still at school, mustn’t know what he wants to do. Some people might argue that if I gave some more information, “I’m doing an MBA at Melbourne Business School”, I might get a different reaction but I still have no control. Maybe the person I’m speaking to thinks an MBA is a waste of time, maybe they don’t like formal education. Ultimately it doesn’t matter whether I’m a student or not, that’s not who I am. What I really want to communicate is those core concepts: Disrupting and making others better and learning. So now my response is clear, when I get a question like ‘what do you do’ I can answer it in terms of what I really want to communicate:

               “I’ve gone back to school to study so I can help the people I work with do their jobs better because we are going to change the world”

Plenty for the listener to respond to, creates a huge level of engagement, hard to put in a box and, creates a positive, memorable first impression. That’s what I wanted to say.

Ruslan Kogan on Leveraging Digital Marketing

A couple of weeks ago I was lucky enough to see a presentation by Ruslan Kogan (kogan.com.au) which was put together by the MBS Marketing Association (but more on that down below). Apart from being a really engaging presentation, there were a couple of key items which have stuck with me and I’ve been meaning to share.

As a bit of background, Ruslan started Kogan by importing a container of TV’s (I guess they were plasma’s given the vintage) from China after identifying the price differential between what was being offered ($3-4k plasma’s through Harvey Norman and JB-Hifi)and what he could source (a $1200 TV with the same components, from the same manufacturer, without the Samsung or Sony branding). From this he’s built the biggest online electronics retailer in Australia and topped the Richest-Australian-Under-30 list last year.

He’s made a name for himself by being innovative, taking on big-guys like Harvey Norman, in an established industry and doing it successfully by bringing a new business model into the market. The first time I heard about Kogan was their “Don’t buy into the cable con” promotion when JB Hi-Fi were upselling to HDMI cables to TV and Blu-ray purchasers for hundred of dollars. An HDMI cable connects devices together and because the signal is digital, it doesn’t degrade like analog so there’s no appreciable difference in signal quality between a $5 cable and a $200 cable. Because the customer is instore and in many cases, needs to buy a cable to connect their new toys, the only choice they have is to get gouged for a cable with a 4000% markup. It’s like saying that a streamed video looks better on your laptop because you upgraded your ethernet cable… it just doesn’t make sense!*

Two things really struck me about his presentation. Firstly, he’s a guy who is always looking for the win-win. This is a fantastic attitude to take in business because when you succeed your partners succeed which makes everyone rich and happy. There’s no point in developing supplier relationships where you’re out to screw every last dollar out of your partner, if they’re not making money then they aren’t going to provide you with the level of service you need to keep your customers happy. By way of example, the automotive industry is often quoted here. Toyota works hard with it’s supplier to improve their efficiency and profitability, to the point where if a supplier is struggling, Toyota sends in process engineers and analysts to support the supplier. Other manufacturers (GM is often mentioned) have an adversarial relationship with their suppliers. They’re constantly pushing for the lowest price-point and threatening to remove contracts. That sort of activity breeds an unsustainable working relationship. Suppliers are no longer trying to help you, they’re just trying to get what they can and get out.

Ruslan was talking about manufacturing in China  and how, in the initial negotiations with the factory they started talking dollars and once they settled on a price the factory manager told him how well he’d done and how the factory was losing money because Ruslan had done such a good negotiating job and Ruslan said “I don’t want to work with you” and walked out. The manager is sitting there shell-shocked and Ruslan’s translator is running along behind him saying “what are you doing, what are you doing” and Ruslan turns to the interpreter and quips: “Either this guy is an idiot and he’s not going to be running a business in 6 months if he makes deals that he loses money on or he’s a liar and I don’t deal with liars”.  It’s interesting because you can approach that idea of sustainable business and win-win from another angle. Apart from the idea of a situation where both parties do better as a result of the deal we’ve also covered the concept in class of creating a deal where the costs of not completing the deal are greater than the potential benefits of ripping the other party off. If you’re interested in the idea, have a search for transaction costs and transaction specific assets or drop me a line and I’ll send you some stuff.

The second idea that Ruslan really pushed was something that’s consistently mentioned by all the entrepreneur-oriented speakers I’ve heard, the importance of failure and of persistence. I don’t want to tell all of Ruslan’s stories (if only because I don’t do it nearly as well as he does and I’d hate to steal his thunder if you ever get a chance to see one of his presentations) but he makes himself relate-able by talking about the ways in which he failed. Working at a high-profile consultancy firm and the frustrations associated with that. The failed business ventures and the opportunities that he had a go at but didn’t get up and running. Apart from the humanizing aspect to that, he identifies a cultural component as well as a personality aspect that contribute to his willingness to get back on the horse and have another go at things. Kogan was a big roll of the dice for him, his first container-load of TV’s placed him in debt after he’d just lost his job but you get the sense that even if that TV venture hadn’t gone right for him, he would have licked his wounds, built some capital and had another crack at something else. And I find that heartening…

One of the things that was pointed out in our very first week at MBS was that, by-and-large, the people that were sitting in that room were winners, were successes and had probably succeeded at most of the things they’d ever done. But there’s some instances in which that’s not such a great thing. Success is a lousy teacher so when you eventually fail, you’re worse off for not having the support network and coping mechanisms for being able to deal with it. Entrepreneurship is all about failure, as much as it is about anything else and that’s something that a business school affords you, a chance to fail and a chance to learn from that without burying yourself in debt or being so demoralized that you don’t ever have another go. I don’t believe that persistence is something that can be taught, the best you can hope for (I suspect) is picking it up by osmosis from your peers. The people you surround yourself with and how they react, either in support of or by criticizing you for your failures, will be a primary factor in whether you continue down that path. For me, the opportunity to access that peer group and environment is something unique and valuable that a business school can offer.

*Note that you can buy more “fully featured” cables which support higher bandwidth or audio return etc. but that’s a case of features, not quality. These additional features are for users with specific needs, they aren’t something that anyone with a system under $100k is going to use.

Product Life Cycle and the Limitations of Frameworks

So I’m going to start with something I got from a class I took on product development 5 weeks ago. It’s taken me this long to get around to posting about it because I’ve been turning this idea over in my head. I guess most people are aware (conciously or subconsciously) of the idea of a product lifecycle. It’s been around since the 60’s and the basic premise is that products, most often thought of as an item, like a piece of clothing, have a lifecycle and at any given point in time, the product will be in somewhere on that lifecycle timeline.

Intially, Products are introduced and whoever is selling them is focused on creating awareness in the marketplace (in Australia recently: cider as an alternative to beer & wine). Assuming you’ve got a good product and a willing market you should experience growth, you’re trying to expand your distribution, competitors enter the marketplace, you start to focus on why your product is better, to differentiate from the other offerings. Then comes maturity, you’re a recognised brand in the marketplace, you have your niche or segment and you’re trying to defend your market share and remind people why they should be buying your product (they’re already aware of the product category and they know what your point of difference is) and eventually you fall into decline. Competitors turn your points of differentiation into points of parity, the markets shrinks because the trend has moved on (ie: basketball in Australia now, as opposed to the early 90’s) and you start looking for ways to invigorate your product or find a new product.

In pretty much all cases, companies are selling a product to make a profit and the model allows for that as well, showing that during the introduction phase you’re making a loss while you try and build awareness. During the growth phase you start to make a profit but at a lower rate as you reinvest to build your market and then you hit high profitability during maturity which peters out as it becomes unprofitable to manufacture and service your declining market. One way companies deal with this is releasing new products which then may make the model a self fulfilling prophecy because the new product superseeds the old and so you see that product go into decline.

But there’s something else, right now you’re probably looking at the diagram above and wondering why it just doesn’t look quite right. As a whole, the idea makes sense but as soon as you actually start to apply it in practice, things go wrong. For starters, there’s other factors affecting the sale of a product such as how your Brand is perceived and the timing of the product entering the market.  If the product you are launching is a brand new concept then you need to educate the marketplace about what it does (ie: the original iPad) or you might be trying to emphasize the differences in the functionality of your product where the product is understood (ie: car manufacturers)

The model above shows four relatively equal periods of time for each of the phases but that will almost certainly not be the case. Some products live really successfully in the maturity phase for a long time, others never get there (fashion clothing for example: grows and is gone).

Then there’s the industry factors: maybe you work in tech where the turnover cycle for a product (say a mobile phone) is a sales cycle of 12 months (3 months growing and being the latest tech, 6 months as the “Free on a $59 plan” phone and eventually in decline a pre-paid handset). Or you might have a business based around getting the product up and running, creating the niche, and then selling it off to a bigger player in the marketplace (a pretty common model for tech start-ups). Some people even create businesses around supporting the products that other people have dropped because of this idea that a product in decline is not worth it. For instance, SAAB closed it’s doors earlier this year which has a flow on effect to a bunch of secondary industries including auto mechanics. Now that SAAB owners can’t get their cars serviced through the manufacturer there’s a whole new market opening up, for a product that’s on the decline, but that still needs to be serviced and probably can be quite profitably. I guess the smart mechanics got out there and setup an agreement with the local SAAB dealership that went along the line of “you love the cars, your customers love the cars, give us the details of your servicing list and we’ll keep them happy.” Chris Anderson covers it pretty comprehensively in his now lightly defunct blog ‘The Long Tail’ which has a bunch of fascinating related examples like netflix where as their library of titles grew, they saw significant shift in consumption patterns away from the top 50 releases into less popular titles, servicing the long tail of the declining market.

These models and frameworks are designed for people like me, may not have experience in the area but need to apply some sort of structure to make sense of what they are seeing, the model is not much more than a pretty picture but credit where it’s due, it introduces the concept simply. I guess my observation for studies so far is that MBA students are always looking for a model or a framework to apply, the key points that you can take away from a lecture and the rule of thumb but these things only work if you check that things make sense in the context of the situation. Worse, in applying an ill-fitting model you actually limit your opportunities because you rule out servicing the declining market of SAAB’s or you go in with the mindset that a product is designed to be replaced every 18 months to keep consumers purchasing. Frameworks don’t replace the process of thinking and sometimes that gets lost in a formal education system.

Marketing in the Boardroom

So I’ve prepared a model which attempts to summarize the major points I’ve learned so far in marketing. It has been developed with the intention of being able to expand it as the course continues (ie: the 4 P’s of Product, Price, Place and Promotion) but  in order for me to organize my thoughts, it’s important for me to get something down on paper. It’s also a great opportunity for me to play with a new software package I’m trialling. If you’ve been looking for something that allows you to draw quick conceptual maps then checkout Mindjet MindManager. Thanks to the Devil’s Inquisitor for pointing me in the right direction and if you’re interested in sustainability, check out his blog ‘The future we face rests on the choices you make.’

So looking at this process, there’s another insight that’s been bubbling away for me since I started looking at the value creation process. Namely that marketing isn’t a business unit, at least, not in the way that manufacturing or HR or accounting is. There’s an execution component, sure, activities that needs to be done by marketing professionals like setting up the advertising campaign or understanding the customer and explaining that to the rest of the organization but the more I look at it, the more critical it seems for C-level executives and members of the board to have not only an understanding but a marketing orientation.

It’s a bit like organizational culture; an organization where the CEO yells at people gives implicit permission to the rest of the company that it’s acceptable to do the same thing. In the same way, if you don’t have at least a member of your board with an understanding and willingness to promote marketing within the organization then you’re going to miss out on diversity, insight and perspective. That’s not unique to marketing, and holds true across a board for a number of specialties, but I’ve observed that this is acknowledged far more readily for technical professions or legal or finance than for marketing and that’s the sort of unrecognized bias that keeps a company from reaching its full potential.

In terms of business as a whole, selling has been a critical component since the market came into existence, but selling isn’t marketing. I’d argue that sales is a business unit, like the others listed above (HR, accounting etc.) but where marketing differentiates itself is that it is cross functional. It’s job is to share the mantra of the company, to align the different organizational silos so that everyone understands how they contribute and impact the customer. From this perspective, it’s just as important to market internally as externally, to use the marketing team to help the manufacturing group understand what our customers want via market research or to help the HR team understand the drivers of company culture to assist them to recruit people that are the right fit.

Going back a couple of posts, I talked about customer orientation vs. product orientation: where the product is determined by the customer needs rather than creating the product first and then finding a market to sell it into. It’s the marketing team that is driven to understand the customer and share that insight with the rest of the organization. This intrinsically links marketing with vision and strategic direction and that’s without bringing in the ongoing tasks of product line extension and mix, branding or customer relations.

Post-MBA I’m intending to move to the boardroom, to use the skillsets I have to work as a non-executive director. Taking on the Masters of Marketing has given me a whole new insight into the diversity that needs to be present at board level for the management of risk and the optimization of vision but also how marketing is used internally as another channel for creation of culture and dissemination of information. Having a background in business, but no previous experience in marketing, the value generated from doing a compressed course in Marketing has helped me far more than continued technical specialization would.

Positioning

So this weeks lecture was on positioning, which is the final step in the STP (Segmentation, Targeting, Positioning) process.

In my previous post I talked about segmenting the market, putting your customers into categories. Off the back of that, you make a decision about which customers you want to target (the health conscious breakfast market with a vitamin enhanced juice for example). Positioning delves deeper into that side of things ie: what strategy are you going to use to sell to the segment you’ve targeted.

Positioning relies heavily on your brand. If you are a known brand in the marketplace then consumers are already going to have a bunch of preconceptions about who you are and what you do. When you launch a new product or service, they’re going to assess that new product against what they know about your brand and attribute emotions and beliefs to your product before they’ve even seen it. Likewise, if you’re an unknown brand, you may find it a tough sell if you’re asking people to buy stuff that requires that they trust you (say a car for example, where you want reliability and the assurance that they’ll be around over the next 10 years for servicing and parts). We’ve got a whole unit on brands (which I’m told is really, really good by a lot of the senior students) so I’m not going to get into it too much now but I did want to highlight that it’s an important part of the positioning process. Sort of the background picture on your desktop… something that sets the unconscious mood.

But the thing I found really interesting in Positioning was the idea of Points of Parity and Points of Differentiation. Points of Differentiation (PoD from now on for ease of use) is the one we mostly think of when we’re thinking about products. ‘What does this product offer me that the competition doesn’t’ – like an app store that extends the functionality of your phone to an extent that no single company could match.

But from a product design point of view, that’s starting backwards. Where you need to start is the Points of Parity, namely, what do you need to offer to be considered a ‘product’ in a category. In the example below, that’s the first three circles: the core benefit, the generic and the expected. So for example with mobile phones, the core benefit is that it needs to be able to make & receive calls and be conveniently portable. Every generic product needs a screen for feedback and an address book that stores numbers. Expected benefits are things that might have once been a point of differentiation, but are now just par for the course, things such as customizable ringtones, inbuilt music player and internet access.

Figure 1: Philip Kotler - Five Levels of Marketing

Which now leads us to the two outer rings. Firstly, the augmented product which is the level at which most PoD features occur. This is where an app store like iTunes offers a point of difference to a traditional Nokia or Ericsson. With Windows Mobile and Android both pushing hard into the ap space, it won’t be long before this drops back to the ‘expected product’ ring rather than being a PoD (acknowledging that the ap stores for each system will be different and have their own benefits).

The really interesting one though is the potential product ring. This is where the next set of PoD’s come from, it’s where you leapfrog your competition. One of the things that is really cool about the ap store is it gives Apple (or android or whoever) far more development power than they would have if they were doing all the work themselves. For those of you familiar with Apple products this seceding of control is a big thing for them (they love their end-to-end hardware and software integration and control) but someone there understood that by giving up a little control, they opened up so much potential. There’s stuff put out for phones now that no one could have envisaged 4 years ago when smartphones were just starting to enter the market, augmented reality, micropayment systems, Urbanspoon and yelp.

But to round our the discussion on Points of Differentiation, whatever your killer PoD is, eventually the market will find a way to replicate or offset it. Which is why being the cheapest as your PoD is a really bad idea. Whatever you’re doing, someone can do it cheaper and if you teach customers that the most important thing is price, then the moment someone else is cheaper, you’re market is gone. Which leaves you with a couple of options: Constant innovation (which is good) or making a PoD out of something that’s not easy to copy, like service. In a world where just about anything can be bought out of China (and probably cheaper than you paid for it) finding another way to differentiate means looking at other parts of your product and the most obvious one is service, the way you deliver what you deliver. When I look at the state of Australian manufacturing, I think this model holds true:

There are the innovators – some bring an innovative product to the marketplace and stop, some have a culture of innovation that allows their organizations to exist beyond the first product

There are organizations with differentiators that still apply – ‘yeah you can get it cheaper out of china but who knows what sort of steel they’ll be using or what type of paint but we can guarantee the quality and we’ll have it there in 3 weeks because we only need to truck it down the road’

and there are the organizations with differentiators that no longer apply – ‘yeah you can get it cheaper out of china but who knows what kind of steel they’ll be using or what type of paint… Oh, you’ve got 3 months to procure it and the Chinese are offering 3rd party inspection in their factory for 40% of our price… Oh…’

And the difference between the second and the third type is all on the consumers side, not the suppliers. So I’d get cracking on a new differentiator if I was you… because in the economic climate we’ve got, companies are going to become more concerned consumers.

Market Segmentation

So today’s class was all about Market Segmentation which is the first bit of a 3 part process called STP (Segmentation, Targeting and Positioning).

The idea is that you segment your market and develop consumer profiles for each target segment. There a whole bunch of ways that you can segment a market by:

• geographic (important if you’re a pizza shop, no point in targeting markets outside your delivery area)
• demographic (income or age or stage in the family cycle)
• Psychographic (grouping people based on psychological or personality traits which is important for fast-moving consumer goods in a supermarket: is your target market an impulse buyer or a shopping list maker)
• Behavioural (are they a first time user or a repeat, are they buying from you in a professional context or a personal)

It’s also really important to understand what the market it. When you’re segmenting a market, it’s not just the users of your product, it’s anybody that can use it. The example we were given was fruit juice. The company in question sold fruit juice but had no segmentation of the market. They had a range of products, different flavors, different pack sizes but no real understanding of who wanted them and why. So they sat down and figured out what there main consumption groups were. Turns out there were 3 major times that people consumed juice: at breakfast; out-of-the-home as a snack/lunch drink in a cafe; after school when the kids come home and raid the fridge for anything that will tide them over until dinner.

Then they pushed deeper. Within the breakfast category the Juice company developed consumer profiles, sort of an amalgamated profile of the characteristics of that purchaser/user. There were those consumers who were looking for a meal replacement, others were looking for a heath product and another segment was looking for taste and variety. So the company developed a product for each of those segments. The first one turned out not to be a juice at all, it was a non-juice breakfast meal replacement drink, the second segment got several juices fortified with vitamin A, C & E and folate to capture that health market and the final segment got interesting blends of exotic juices and seasonal flavors.

Every business sells something and for someone with my background, manufacturing engineering, where the selling of the product is quite remote from the execution of the project there’s always the risk that your designers might not have any idea what it is that the consumer actually wants. Which is why marketing is important internally for an organisation. These are the guys who should be helping the designers and the engineers (or the lawyers, or the chemists) understand who the end user is, what motivates them and what their needs and wants are. I’ve never met a designer who wanted to make a crap product but it happens all the time because the communication between what the user wants and what the designer thinks they want isn’t clear (there’s the additional factor of what management will allow them to have but that’s something that marketing should be managing as well). Thoughts?