Entrepreneurial Marketing
Entrepreneurial Marketing Ted Finch Chief Marketing Officer Titan Solutions Group Overview Objectives Background Marketing defined The marketing organization A Plan of action Strategy Tactics 004 p00 Operation Objectives To explain how to setup marketing at a high-tech startup, which positions and tripwires for when. Startups can be external (started from scratch), or internal (started from existing company with hand-picked team). External startups usually require self-funding, friends & family, angel investors, VC, or public funding. Internal startups are usually new divisions or new companies funded internally00nd are often spun off (like my current company). All startups use a similar marketing process By the way, these slides will be a little 00ext heavy00so you can refer back to them later Background 21 years of marketing. 7 years consumer marketing in entertainment industry. 14 years high-tech marketing. Sold the company00as acquired five times. First high-tech external from scratch startup in 009, VP of sales and marketing, original 13 people grew to over 4,000 people. Sold company. Executed over 400 product launches from over 150 companies (Sony, Microsoft, Ashton Tate, Compaq, Adobe, Lotus, IBM, Citrix, Aldus, Corel, Autodesk, HP, Intel, Canon, plus many more). Industry mercenaries 00launched entire categories. Sold company. Later formed an internal startup000publishing00software. Helped launch a category called the Internet. Four world-wide top sellers, including Netscape Navigator and AOL. Sold company. Formed another internal startup (1/2 owed by us, and 陆 owned by Tom Clancy)--Red Storm Entertainment. Sold company. Senior VP at Metrowerks, sold to Motorola. Sat on 7 person marketing board, headed up $2 billion division. Headed marketing at internal startup division. VP of Marketing at $130 billion GE, highest % growth sector. Responsible for re-booting acquired company marketing. Chief Marketing Officer at Titan Solutions Group. Currently creating a software startup division00ntend to take public. Founder of 00hanimal 00The Ultimate Resource for Software Marketing00at Market driven companies ask, 00hat do you want (and are willing to pay for), and then they build it00/font> The following org charts show a standard marketing organization, the stages of startup/marketing dept. development and tripwires Marketing Organization Chart represents functions that exist within a marketing organization. In startups, multiple functions are handled by one person. As the organization grows, and the workload increases, each area is handled by a specialist. Areas 00lump00from this point on depending on the # of products, channels, international, in-house work, etc. Product Definition, Price Build, buy, align Promotion Early Organization Get the product defined, validated and into development Wordsmith positioning, collateral (packaging, on-line, copywriting) Start pre-sales Formal alliances to ensure complete product Setup channel kit, define program, early recruiting Hiring order Next Stage Organization 5. Additional sales to pre-sell product and start long sell-in 6. Start analyst meetings, prepare for press release, product launch 7. Setup on-line presense, product information, line up promotions, setup portals (press, reseller, customer) 8. Start recruiting in mass Definition, setup and initial promotions come first. The rest of the positions are filled as the product is launched. This is a self-funding model. External funding may accelerate the process (but actually shouldn00 00unless entering a hyper competitive market) Sage Tip: Organizational Chasm Having personally gone through this stage six times (and having consulted multiple companies), I have found that the marketing generalist (wearing multiple hats) stage typically changes when the company transitions between 12-20 million and between 75 to 110 people. At this time, the workload is usually too great for the initial marketing individuals. The team must diversify and specialist must be hired (or be ready to step up internally). This is also the time that the original entrepreneurial 00o it all00skills may bottleneck the company growth if they don00 evolve, or let go (of 2-3 roles) for the group to specialize. I have seen some companies move all the way to 50 million and then stick there like glue, until they get through this transition so they can move to the next level. Observations Marketing has a mixed reputation00ften deserved. Management seems to know the least about the roles of marketing and typically fill the department with engineers, customer support, sales, accounting, interns, you name it. To top it off, they throw in a graphic artist, since this position has to be specialized. Also, most VPs of Marketing that I work with, don00 know much about marketing (having no formal marketing education (school or books), having come up through the ranks with similar non-marketing backgrounds). At Motorola Semi-Conductor Sector, with about 400 marketing people, only a handful had any marketing training. At multiple GE divisions (industrial systems 00not consumer goods), most of marketing was from support and engineering00ith only 1 business degree within the entire group. Other 00arketing00VP00 were technical lightweights, and usually only knew marketing communications--no formal pricing, product marketing, alliances or channel marketing background. Best background, technical undergraduate (or aptitude), graduate degree with marketing emphasis. Plus, sales and consumer marketing experience00o apply to technical products. 00eal00marketing professionals, that are skilled (and practiced) at all 4 of the marketing P00 are rare. However, they can chew up a market and eat competitors for lunch and can easily recognize big holes to capitalize to help their startup succeed. They can also train and mentor existing folks with templates, processes and example. I00e spent much of my time mentoring teams00any became world class (such as the team that launched Netscape Navigator, the oldest had been out of college for 18 months). Overview 00 Plan of Action Setup (equipment, hook up, create plan of action, internal assessment) Strategy Situational analysis 00market strategy Market environment (competition, economy, regulations, etc.), Market segments, Product offering Organizational strategy (adoption cycle, growth strategy) Market size, share (forecast), growth potential, product positioning Tactics Product (product & company, build, buy, align, positioning, , naming, branding approach) Pricing (objectives, strategy, structure, levels) Placement (direct, indirect, OEM, channel) Promotions (PR, on-line, ads, events) Collateral Operations Goals, budget, organization, support 00summarized in Marketing Plan Start with a Plan of Action In a start-up (internal or external), I always start with a plan of action. Personally, and require it of each team member. This is a high-level action plan that sets the framework for how you are going to proceed. It helps level set the team and establishes the stages and high-level target deadlines. The 2nd step estimates the time frames, could go into a Gantt chart, and proceeds to the business and marketing plan (with a lot of definition/validation work up front). I will take you through my actual plan of action for actual live work (nothing confidential, but this is the 00eal00process 00you are seeing how it is done, line by line) Note: it contains information to level set the executive team on terms and processes Setup & Plan of Action Done. Setup laptop, network, password, access, filing system Done. Initial assessment. Competition, market size, alliances, budgets, organization, collateral Done. (need to review & sign-off). Plan of action. Identify and sequence most of the marketing, sales, training, support, and product action items to create a commercial software division. Done. (setup meeting). Hook up with John to parse out Business Plan deliverables. Prepare w/Plan. Strategy Identify the 00ncontrollables00 (competition, economy, regulations, market demand, market size, existing segmentation), and decide how to address them with the items we can control (product positioning, marketing mix (4 000000(product, price, placement, promotion) to achieve our overall financial objectives (including sustainable financial growth). Formal Plans Business Plan Marketing plan is a subset of overall business plan covering the market section. I will work internally to further delegate so we can meet our timeframe. Marketing plan will dove tail with financials and projections. Situational Analysis Market environment Define our current and future space (hi-level, where do we want to play now, where should we play later) Competition Identify current and potential competitors - ranked Review product (install, timing, usability, features00verything a prospect would see), price, distribution and sales, promotions, alliances, OEM00, supply chain. Identify holes. SWAT analysis Technological issues Preferred platforms (.net versus Notes), latest technical options, trends Economic issues State of the economy, current impact on home sales, dynamics of sales to software systems adoption Social political issues New regulation that will help, hurt us (financing, security installation, etc.) Situational Analysis Market size Compile list of top 10, 25, 100, 1000 to evaluate size and characteristics Compile secondary research (reports) to validate sizing Market segments 005 questions to evaluate Smaller homogeneous subsets of overall heterogeneous market (will one product satisfy the wants of everyone within the market? (size, sophistication, platform)? Easy to identify and characterize? Easy to reach, find and promote to? Individual segments large enough to be profitable? Are all buyers in same segment responsive to similar promotions? Organizational Strategy Growth or Consolidation Consolidation strategies Determine course of action for existing product (harvesting, pruning, retrenchment, divestment) Growth strategies Market penetration 00better ingress into existing markets Product development 00change product or perception Market development 00find growth in new markets Diversification 00introduce new products Strategy - Growth Potential Market share Percentage - justification Gaining Sales forecast By product By segment By region By distribution Product/Company Positioning The APEX of strategic analysis 00how do we expect to compete and grow in this space? What is our product00 key differentiators, unique value and positioning? What is our company00 key differentiators, unique value and positioning? Marketing Mix 004 P00 Product Product type, name, features, benefits, competitive positioning, buy/build or align Price Objectives (marketshare, ROI, sales growth, long-term profit) Strategy (22 options 00floor, penetration, parity, cross-benefit, etc. Structure (which products, by account, time & conditions) Levels (volume break points, site license, by product, service and peripherals) Placement Direct or indirect Promotions PR, advertising, direct response, on-line, alliance, events Product Review current product (install, learn, demo) Product definition Existing product fixes (usability, bugs, enhancement request) Competition (more detailed analysis 00summary) Review, evaluate and contact potential alliances (align or build) New product research (or shortcut and summarize any existing) Decisions 00 if we believe we know most of the requirements based on previous product, we can proceed until we receive early validation and then move into Market Requirements Document (MRD) Secondary 00reviews and reports Primary 00qualitative and quantitative (to validate frequency) Competitive matrix Internal assessment (engineering, support, QA, sales) Current customers (CIO, roundtable (person, phone, webinar), test for usability, installation, platform, features Analyst, consultants and resellers Prospects Focus groups, trade show meetings, roundtables, phone calls, webinar Survey prospects, analyst, resellers and have them prioritize suggested features Product Product definition Summarize customer business case Identify major problems we need to solve Evaluate which can be solved currently Create roadmap to address overall needs Quantify our savings and $ in pain Positioning (transfer this info to strategy section) Finalize our build, align, buy strategy Market Requirements Document (MRD) Formal as necessary to create the product (less formal, less time, more hands-on) Functional characteristics Use case scenarios Usability requirements Performance capacity, speed, concurrency Interface/integration requirements w/3rd party hardware and software Prioritized according to a phased roadmap Name product (review naming conventions, follow 5 step process). Not necessary until the product is defined. Warning: Never release name until press release. Name division (review naming conventions, follow 5 step process) Create brand identity (name, logos, messaging, look and feel, usage guidelines) Product Brand identity Not necessary to name the product, division, etc. until the product is defined (have not even solidified its positioning until then00hich may come into play with the naming). Always use code name. Never release name until the press release (or we don00 have 00ews00. Name product (review naming conventions, follow 5 step process). Review naming conventions (budget, abstract/descriptive/suggestive (etc.), positioning, tag lines) Brainstorm for names (that meet objectives and finalized conventions) Narrow the list and do basic name search Conduct basic and quick acid test with prospects/customers Decide final name candidates, prioritize and conduct advanced name and trademark search Finalize name 00 do not publish until press release Name division (review naming conventions, follow 5 step process) Create brand identity (name, logos, messaging, look and feel, usage guidelines) Product Development Get alliance or OEM agreement w/timeline for anything we align, versus build Review and validate our architecture to ensure modularity, standards, expandability Review product specification to ensure it maps to MRD Formal sign-off (as needed) Setup beta sites for testing, pre-sales Setup initial usability and benchmarking review Product sign-off meeting Price - Strategy Price distinguishes our offering from the competition and similar products. It communicates our value proposition and influences buying behavior. Review pricing for competitive and similar like products Review prospect00 cost for home grown and alternative application (how have they been getting the job done) Review cost for the entire system (looking for ways to reduce the overall price, not ours) Understand the overall cost (software, customization, support, maintenance) Pricing Pricing objectives Marketshare, return on investment, sales growth, short/long-term profit, etc. Pricing strategy Floor pricing, penetration, price taker/maker (pariy), premium, cross-benefit (razor/blade 00software vs. customization), etc. Pricing structure Which products need to be priced Software, professional services, installation, support, maintenance Time and conditions Pricing levels New customer matrix, competitive upgrades, update price matrix, alliance pricing, OEM pricing, sample (NFR) pricing, reseller discounts, international pricing, gratis items, exception policies Price sales dialogues 00price savings build-up, reduce to simple, price versus 00ost00/font> Placement - Sales Direct vs. Indirect 00trip wires Direct sales 00 company initiative Hire a 00ands on00sales director/manager Setup sales compensation, commission, bonus program Recruit appropriate sales people and/or hire rep firm Prepare sales kits (see collateral) Train sales people (product, market, customers, sales training) Setup field systems (contact mgmt, etc.) Create and populate field database Setup field sales lead dissemination and follow-up system Placement - Sales Indirect Program setup Program definition 00reseller levels w/benefits and requirements Setup co-op, mdf policies and guidelines Reseller kit w/program descriptions Intro letter, Reseller PowerPoint, checklist, reseller application and agreement, levels, contact information, reseller prices, part numbers, customer PowerPoint, training requirements, collateral samples, product reviews, etc. Recruit resellers Setup distribution agreements (Ingram, Tech Data) Identify target resellers (size, type, markets) Setup contact database and compile list Setup initial reseller database (password protected, overview of program, product info, bbs00ollaboration, lead dissemination and follow-up Contact and recruit (PR, alliance resellers, direct mail, VARVision, roadshow, temp firm, reseller-centric events) Reseller training (certification, training materials, physical and/or on-line training) Reseller promotions and Co-op/MDF management - ongoing Promotions PR (1/7th the cost, 15 times more believable 00always start with PR!) Setup Determine objectives and measurement Company positioning statements 3-5 key talking points division and product Company backgrounder Internal media training (what to say, cautions) Establish policies (flaming, spokesperson, routing) Setup crisis management process External PR 00 hire PR firm Internal PR Build target list, database and calendar Identify and compile industry influencers (analyst, consultants, organizations) Identify and compile target publications Identify target trade events Create master calendar Create reviewer00 guide Promotions PR Internal PR Proactive campaigning Setup interviews with analyst and key executives Follow-up with executives to stay in contact with press as experts Issue press releases Setup press tour (preferably at trade events) Speak at trade show events 00as the industry expert Write ghost stories and submit to freelance writers Create white papers to validate company00 unique value Place success and case stories On-line ombsbudsman Follow-up and tracking Read, correct all mistakes Setup clipping service, clip books, bulletin board 00communicate Calculate response and value (Media Quality Quotient Analysis) Promotions On-line marketing Definition stage Solidify objectives, consistent look and feel, PR/reseller/alliance portal, buy domain name Building stage Setup lead portal, product information, plan-o-gram and e-commerce CD-ROM version, site stats, on-line surveys, search engine, Web policy Promotion stage Metatags & key search words, submit to search engines, link to/from alliances, organizations, op-in list, announce on-line forums, affiliate program Promotions Alliance marketing Setup & definition stage Define objectives Identify potential alliances based on product, complimentary sales contacts, etc. Prioritize alliances into top 10 (most of your time spent), top 25 and self-serve (compile contacts) Define the levels, benefits and requirements Create alliance policies (screening criteria, process) Setup 00elf-serve00 alliance info for non-top 25 and above Alliance kit Intro, benefits, agreement, NDA, logo usage, hi-level roadmap, calendar, order form, contacts, workshop agenda, alliance PowerPoint, Titan sales script and presentation (cross-selling), alliance portal Recruiting stage Contact top 10, sign agreement, setup workshop dates, contact next 25 Development, sales and promotions stage Complete alliance workshop, issue alliance press release, link web sites, add to alliance portal, exchange demo software/training materials, prepare an alliance promotions plan and follow-up Promotions Advertising Determine objectives Review competitor00 campaigns (if any) 00Adscope, personal clippings Determine target audience (buyers, influencer, resellers) Media selection (order trade pubs, review demographics and editorial schedules, initial media selection) Create ad concept, copy and design (Z format, direct response w/offer) Determine frequency, negotiate placement, submit ads Create on-line direct response landing page Measure and evaluate media, message and response Promotions Event marketing Roadshow for resellers and prospects Prospects 1st half, resellers 2nd half Trade shows Attempt to exhibit in alliance booth If own: Determine who will coordinate Booth size Rent or buy a booth Pre-show activities Post-show follow-up Lead dissemination and follow-up Show report Collateral Price list and matrix Customer PowerPoints Reseller program PowerPoints Alliance PowerPoints Alliance kit Product demo script Folders w/sticker space Product packaging Product slick Sell sheet (resellers) Family brochure (if applicable) Press reprints Customer testimonials Business plan - investors Demo CD-ROM / Video Case stuides White paper Sample RFI and RFQ templates Competitive matrix (sales version) 3rd party add-on book Branded give-away items PR Reviewer00 guide 35 mm slides, Web versions Hi-res .jpg of key executives and products Logo usage guidelines Marketing Budget To be added, depending on programs and ability to use existing resources Process, first we create the promotions with the expected ROI, then we get sign-off Note: Be prepared to sell your budget, by first selling and getting agreement that your promotions are needed. Under funding (and over funding) is death to your product 00you must cost justify Budget Summary 00Expense/ROI Channel Marketing 00recruit new resellers, sell more through existing resellers (increase recommendation rate). Expense: $160k + Channel Mgr Return $4.9 million. Advertising 00new product announcements, generate leads for sales and resellers. Expense: $416k (50% new verticals) Return $1.8 million. Promotional PR 00 generate leads, credibility and awareness. Expense: $144k + PR Manager (contractor). Return $2.3 million. Events 00 generate leads, customer, consultant, reseller and press meetings00nly ASIS 003. Expense: $338. Return: $513k Customer & Reseller Conference 00customer, consultant and reseller support, pre-sell on-going releases. Expense: $320k ($320 CASI, $110 other divisions). Collateral 00product catalog, price lists, CD00 (support material), reseller sales kits, data sheets, etc. Expense: $394. Return: Cost. Required to sell the products. GENERIC EXAMPLE OF POSSIBLE BUDGET INFO Channel Marketing Promotions Direct Response 2,000 targeted locations 00$8k ROI: 2,000 x 5% response = 100 leads x 10% conversion = 10 resellers x $100k/reseller/1st year = $1 million Reseller database list - $5k ROI: Needed to run campaign Events Reseller Roadshow (10 cities, $80k less contribution) - $25k ROI: 10 cities x 25 resellers/each x 10% conversion = 25 resellers x $100k = $2.5 million Reseller Collateral ((brochure, binders) (2,000 x $50/ea)) - $100k ROI 00Necessary to run the program. GENERIC EXAMPLE OF POSSIBLE BUDGET INFO Summary This process is exactly how products like Netscape Navigator were published and launched. This process helped create the world00 largest services company (launching over 400 products and over 1 million promotions) This process helped companies like HP, Corel, Microsoft, Motorola, and GE There is still a lot of expertise involved in knowing how to execute each phase of this plan and get a high-tech startup off the ground. The process is not secret, and not particularly brainy (besides, it was condensed), but it works and should be helpful in jump-starting your future startup efforts. Resources To find out more, visit my industry resource, Chanimal 00The Ultimate Resource for Software Marketing at
refer page:-------http://www.officesoon.com/doc/52229-entrepreneurial-marketing
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