May 20, 2004

News & Opinion: Momentum and the Essence of Digital Product Marketing

By: 800-CEO-READ @ 4:44 AM – Filed under: Marketing & Sales

Every once in a way you stumble on a book that is so useful, revelant and strategically insightful that you are loathe to share the title with anyone. It's similar to the way you feel about your favorite B&B or a beautiful, pristine hike. You don't necessarily want people to beat a well-shod path to its doors.
Then there are the books you want shout from the rooftops "Hey, world! Go out and read this now!" You want to shake up and revolutionize the workplace and business everywhere -- and the more the merrier. (Books like Re-Imagine and Lovemarks and Seven Day Weekend come to mind).
Well, Momentum: How Companies Become Unstoppable Market Forces falls in the former camp. And I don't know why I am writing this review. I am definitely tempted to hoard it.
So that's my theory of why this book is virtually a secret. Another factor could be it came out in 2002 -- not exactly great timing for a book on positioning for digital products. And the third could be that the authors are digital product marketers rather than book hawkers.
The book is written by two ex-consultants whom did extensive research on the topic of differentiating digital products. They conducted more than 20,000 customer interviews with business and technical decision makers as well as consumers on their impressions on more than 60 different companies and brands that fall in the realm of creating and selling "digital products".
Now, that seems to be a narrow category, but certainly one that is growing larger. The authors contend that these strategies "apply even if the product's primary function is analog-powered, but the customer relationship is digital-centric." For instance, companies like Sears, GE, Panasonic, Sony would fall into this category. Even the automobile industry, with the advent of digital entertainment and telemetry features such as GM's OnStar. Then add the move towards a Dell-like model for customer configuration and delivery of new car purchases. And more and more entertainment and household goods have a digital component.
I read a lot about marketing in general, and have been intrigued by the emotional and branding aspects. I intuitively understand that evoking emotion plays a crucial role in marketing in some segments...but exactly how does Coca-Cola (Jack, please stock Emotional Branding by Marc Gobe), Nike, or Starbucks strategy translate for an enterprise infrastructure software product, a computer networking product or a chipset?
Truthfully, I didn't have much of a clue as much as I love books in that genre. For consumer oriented digital products, I could effectively apply quite a few of the concepts from these branding gurus, but what about B2B digital products?
I know there was some "emotional" aspect that went beyond sleek industrial design. Many of these B2B digital products aren't inherently "sexy". Luxury and trading up doesn't quite enter CIO's minds that often these days.
Just reading the jacket of the book, I realized that these authors had nailed a concrete analysis of what I intuitively think about when I am the buyer (and not the seller) of a digital product. I'm thinking about whether this company will even be around in three years and if I'm making the right long-term bet.
"The static nature of markets like toothpaste, film, cars and airplanes, among thousands of others, produced approaches to strategic positioning that would never be completely appropriate for digital products and services.
Digital markets are intrinsically dynamic, and momentum comes straight from the field of mechanics and the study of dynamic conditions."
While reading the book don't be too hung up on the snapshots of company case studies outlined. The model is meant to be dynamic with feedback ideally feeding back into the system. Even though the author's use the words "unstoppable market forces" -- anyone can topple -- and their momentum model can show how and why. (They explain how Microsoft faltered with the DOJ trial and how Cisco faltered after the dot-com crash that left it in a wake of unused inventory.)
Their interviews reveal that an important emotional characteristic they call a customer's sense of "inevitability" about the company's long-term success. And they tie this to customer purchase decisions.
"...We were observing what brand gurus such as David Aaker, David Ogilvy, and Trout and Ries predicted for decades: Purchase and loyalty are empirically linked to how people perceive differentiation. But differentiation, whether real or fabricated, exists only in the context of a person's expectations for a product or service."
"The sense of inevitably described by...customers appealed to us because it suggested a state of mind for the digital customer, rather than an attribute such as customer service. We decided at this point to attempt to model the purchase considerations that created this state of mind, as well as how those considerations influenced the sources of differentiation valued by people when purchasing a digital product or service."
Now this all sounds pretty fuzzy and well, emotional, compared to a blow-by-blow feature-by-feature comparison of products. Or that ever-faithful 2002-era ROI calculator.
But the amazing thing is this "sense of inevitability" is measurable. The authors created a dashboard to measure it. They share these conceptual "dials" sprinkled with a generous dose of company momentum snapshots and case studies with us.
I'll set your expectations now. If you were hoping for a layout of this dashboard along with the full 57-question survey and methodology or an outline for an action plan, it's not in this book. It's probably a consequence of the fact that they don't own the intellectual property (the consulting firm they were employed at the time does). But I think the book provides enough context and the framework of the model for any strategic marketer to use it as a starting point.
I had feared the book would be a not-so-subtle plug for their consulting services. But it doesn't read that way at all. And they are both gainfully employed by former clients. In fact, Ron Ricci is now VP of Corporate Positioning for Cisco.
I would say that the Cisco success story is outlined pretty well in this book, and the meteoric rise of Cisco into the realm of a 800-pound gorilla in their market is testament to their successful application and continuous adjusting their positioning based on the feedback provided by the momentum model's dashboard.
To me, the book successfully encapsulates the high-level findings of their metrics for the state of mind of a digital customer.
Just in case you are skeptical that there is any difference between "analog" and "digital" products, I'll share the two characteristics that distinguish digital from analog products -- 1) they are never done and 2) they don't stand alone (but rather are part of an ecosystem).
They chart the evolution of marketplace from one of image to products to ideas. Whereas the Marketplace of Products is about the present, the Marketplace of Ideas is about the future and thought leadership. Customers are essentially implicitly buying a futures contract with the company. They are wondering: "Will this product satisfy the expectations I have from the last time I bought it?" which typified the marketing challenge from the Marketplace of Image -- buyers of PCs started asking new questions, based on their expectations: "Will this product keep up? When is the next upgrade? How can I trust that the upgrade is worth buying?"
Cisco broke from the pack of competitors (mainly 3Com and Bay Networks) by using the authors' dashboard to measure and get feedback on their market positioning. Among the things that stand out in the Cisco case study is a strong ecosystem approach (providing a platform for variety of partners), laying out the future for your customers (thought leadership as well as providing guidance for your customers) and creating a CEO visionary celebrity.
"But the most interesting aspect of Chamber's view of the future was not its ultimate accuracy. What was different about his vision was the fact that it wasn't a vision for Cisco. Chambers was offering a perspective on the future business model of his customers...Until the Marketplace of Ideas, a company's vision typically stayed inside the walls of the organization." In addition, momentum companies "ate their own dog food" -- applying the same advice and guidance they dished out within its own walls.
I still am musing over myself the authors' insistence on individual personalities, specifically that of the CEO. I wonder if they wrote it in 2004 if they would consider Microsoft's strategy of humanizing the company through an army of individual voices all blogging away as an equally viable thought leadership strategy. A few of these bloggers do become blogosphere (and yonder) celebrities in their own right. On the other hand, the book 80/20 Individual and Tom Peter's Brand You philosophy say individual personalities do move product.
All in all, I think the book effectively crystallized how to capture digital customer "mindshare" which correlates to marketshare.
And there, now the secret's out.