Setting Expectations for White Space - Apple iPad

by Adam Hartung

It's easy to misunderstand White Space. About twenty years ago Apple launched the Newton. The company sold about 375,000 of the first commercial PDAs, but Apple's leadership thought the market wasn't really there - and decided instead to focus on growing Mac sales. Obviously, as Palm and other PDA makers demonstrated, there was a tremendous market for PDAs. Apple misread the feedback from White Space.

Look now at the recent iPad launch. Silicon Alley Insider headlined "Now That They've Seen Apple's iPad, Most People Don't Want One." The headline keys on the fact that after the launch the number of people who said they were not interested to buy doubled (26% to 52%). Wrong fact to grab onto.


Instead, look at the fact that the number who said they would buy one tripled, from 3% to 9%. This is incredible, and should excite Apple's management as well as employees, suppliers and shareholders.

Most people will see a new, innovative product and say "why would I want that? I already have this other thing and it works great." And that is what marketers should expect. Most people are just trying to 'Defend & Extend' what they regularly do, and thus all the want is a product that helps them do their thing a little easier, faster, better and cheaper. They want minor improvements - variations and derivatives of what they already have. Improvements that are immediate, without them doing anything new or different.

All new deeply innovative products start with customers who are under-served or unserved. And this is why it is so important they be launched in White Space. White Space teams aren't intended to develop the big, mass market of known customers looking for something new. White Space is about doing new things that bring in new customers, give new solutions that attract real growth. And White Space teams have to learn how the market is evolving, how they fit into the market shift and how their solution will advance the market in order to sell more.

For the iPad, the 3% to 9% shift in likely buyers is huge because it shows that the iPad is an offering that appeals to people who are not today well served by their existing PC, laptop, netbook, mobile phone, kindle or mix of these solutions. 9% of respondents are saying that they see the iPad and they see a solution for what they want to get done. And if 9% of potential buyers see this option, that is HUGE. By White Space standards, often there are only .5% or 1% or 2% of people who initially see how the new product fulfills their under-served needs.

Set expectations right for White Space. White Space is not for launching variation 4 of an existing product - targeted at existing customers. That's what the marketing and sales department can do fine, thank you very much. White Space is the team that finds the 3% (or in Apple's case 9%) of users that see value in this solution, then works with them to implement the product/solution in order to make sure it fulfills the market need and is priced to sell effectively while providing a profit to the company.

Apple understands this, you can be assured. Look at how successfully the Apple White Space teams found the underserved users that jumped all over the iPod and iTunes, the iTouch and then the iPhone. They got the product positioned and selling in a hurry. And now that Apple has that skill, the company is going to apply it to the iPad. If you understand this chart correctly, you understand that it bodes very, very good things for Apple.

And it tells you the importance of having White Space teams, setting their expectations correctly, and managing them for the kind of results that can turn your organization into the next Apple. It took Apple 10 years to reach this skill level. It did not happen overnight. Or with one product introduction. And it will take your organization a few years to build this skill. So, what are you waiting on?


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Adam Hartung, author of "Create Marketplace Disruption", is a Faculty and Board member of the Lake Forest Graduate School of Management, Managing Partner of Spark Partners, and writes for "Forbes" and the "Journal for Innovation Science."

Non-profits - Maximize Value from your Board of Directors

by Matt Heinz

Every non-profit I speak with wishes they could get more value from their Board of Directors. It's not that their directors aren't engaged or interested, it's just often difficult to get more of their time and specific, focused attention in between board meetings.

Here are several recommendations for how nonprofits (and any organization with board members and advisors) can get more value from these important partners.

• Give them smaller, contained tasks: Make it easier for them to execute, and get things done for you. Big multi-stage projects can be intimidating to tackle, but if you break those requests into smaller, more attainable tasks, things will get done more quickly


• Tap into their networks: Find out who they know, and how they can help you. Help your directors feel good by making connections within their network to other people, resources and organizations that can also help you get things done


• Leverage their specific expertise: I'm surprised at how few non-profits do this. Know what your board members do well - what they're passionate about, where they have experience - and make sure you tap into that


• Use them for ideas, not execution: This is more natural and achievable for board members, but the key is to not only let them be wildly creative - but to write everything down, capture all ideas, then triage, choose and execute the right ideas, right away


• Maximize meeting time with them: The more time you prepare, the more you'll get out of it. Have a set agenda and expected outcomes, give board members materials to review in advance, be focused during your time, record next steps and follow-up


• Track and hold accountable on commitments: Your board members are well-intentioned, but they can get busy and forget. Send them email reminders, set deadlines, and help hold them accountable. They'll appreciate that you do this


• Choose new board members wisely: As board seats come up for renewal, make sure new candidates understand the commitments. You want folks who are passionate about your work plus willing to help execute


• Reward them: For non-profits, monetary compensation isn't a part of the picture. That said, you still can offer introductions within your own network that will benefit them personally and professionally, give them awareness and public recognition for their time, etc.


• Get their families involved: Invite their family to recognition events, and give families a chance to donate time together for the right projects. Help the rest of the family feel good about the director's involvement and contribution. It'll make those couple extra hours your directors spend on a particular project or task easier to swallow


• Give them tools to work: This can be online collaboration tools, CRM systems, whatever is necessary to help them work faster and easier

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

February's Top 10 Innovation and Marketing Articles

This year I thought I would experiment with a Top Ten list at the beginning of each month, profiling the ten posts from the previous month that generated the most traffic to Blogging Innovation. So, without further ado, here are February's ten most popular innovation or marketing posts:

1. Two Biggest Mistakes in Social Media - by Mike Brown


2. Radical Innovation of Meaning - Apple iPad - by Hutch Carpenter


3. Four Models for Competitive Crowdsourcing - by Hutch Carpenter


4. Aligning Social Media, Marketing and PR - by Matt Heinz


5. 56 Reasons Why Innovation Initiatives Fail - by Mitch Ditkoff


6. Bill Gates Coming out of Retirement? - by Anonymous Microsoftie


7. Reverse Innovation a Popular Trend - by Yann Cramer


8. Innovation Metric of Leading Companies - by Stefan Lindegaard


9. Are MBAs becoming irrelevant? - by Idris Mootee


10. Ideas Are Core to Enterprise 2.0 - by Hutch Carpenter

If you're not familiar with Blogging Innovation, we publish 2-3 new articles every day built around innovation and marketing insights from our roster of contributing authors and ad hoc submissions from community members.

Join our Continuous Innovation group or subscribe to our RSS feed to follow along.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Alice.com Proves Not Making Money Can Be a Winning Strategy

by Ric Merrifield

It doesn't happen very often, but sometimes I hear about a new company or a new innovation and slap my forehead wondering why I didn't think of it first. Netflix was a little bit like that, but I heard about alice.com today and that one in particular bugs me because I have been writing about the basic idea behind Alice for nearly three years, I just hadn't thought to turn it into an actual Web storefront.

So what is Alice and why is it such an a great idea? Well, Alice (named for the Brady Bunch character - good move), is a site that sells consumer goods over the internet. Things like soap, toilet paper, laundry detergent, and so on. The clever part about their model is that they don't make any money selling the products that they offer. They make their money selling advertising on the site, and selling purchase data back to the manufacturers (which the manufacturers have wanted, but lacked forever). Data is king in the world of sales, and Alice is positioning itself to be the impartial third party that sits between the customer and the manufacturer. As long as Alice doesn't compromise the identities of their customers, I don't see how they can lose. Customers value price and manufacturers value richer customer data (what they buy and what causes them to buy), and everyone wins.

This model is in some respects like Costco in the sense that they also don't try to make any money selling the products in their stores. It's no secret that Costco's profits come from their membership dues and that model has served them (and their shareholders) very well for a long, long time. Counter intuitive, but brilliant in retrospect.

I love the spin that Alice is putting on this, and with such a great name, the only way they can fail is in execution, and with two seasoned leaders, that seems pretty unlikely.

This is the kind of rethinking other organizations need to be doing right now. Instead of just optimizing business models that are based on the old fashioned brick and mortar models (like narrow margins on markup), there are so many opportunities to solve age old problems (like manufacturers not getting good data on who is buying their products - and what advertising actually causes customers to buy their products). People need to figure them out like Alice.

I am half tempted to start a site that sells meat at cost and call it Sam (after Alice's boyfriend, the butcher), but meat's a very different animal, if you will.


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Ric Merrifield is known at the "Business Scientist" at Microsoft Corporation in Redmond, WA and is the author of "Rethink". He blogs about ways to rethink through getting out of what he calls "the 'how' trap".

PR is about the story, not relationships

by Matt Heinz

Maybe 10-20 years ago, PR was more about the relationships you had with the right press. Reporters and their publications were the gatekeeper to getting your story heard, and PR professionals were the gatekeeper to those gatekeepers. But even then, relationships were only as good (and ultimately as successful) as the story you had to offer.

Today, story matters more than ever. Yes, a good relationship with press helps you break through the clutter and get a few extra minutes to pitch your story. But a good story stands on its own.

Plus, you don't have to rely on a finite set of traditional media outlets to give your story a voice to the masses. Today, you can publish on your own. Self-publishing won't have the audience others have, but that's not the point. Share that story in a public forum, that both press and your direct customers/prospects/constituents can read, and a good story can get legs, find unique angles through other storytellers and redistributors, and be shared with countless others.

Traditional PR was about telling the story of the company in question. Press releases touted what a company recently accomplished. Those are stories, but not very interesting stories.

But it's more than just shifting focus from relationships to good stories. The stories that get noticed and retold today are about others. They're about the impact you have on your customers, their industry, and the people they work with in turn.

Tom Peters wrote recently that people don't care about your story. They care about their own story. Your job, he said, was to become a primary character in your customer's story.

So if PR today is about the story, and the best stories are about the impact you can have on others, how does that change the storytelling your organization is doing today? What do you say, where do you say it, and what do you want people who read or hear that story do next?


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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Aligning Social Media, Marketing and PR

by Matt Heinz

I'm moderating a panel on the alignment of marketing & PR in a couple weeks at Dan Greenfield's PR + Mktg Camp in Seattle. Should be a great day of discussion. Earlier this week Dan and I talked how marketing and PR teams have traditionally worked together (or not), and how those relationships are evolving now - especially with the maturation of social media as a cross-functional tool set. Excerpts from our conversation are below:


Question: Are PR and marketing more aligned or less aligned because of social media?

Matt: The idea of separating marketing teams and functions is a remnant of the "old way" of doing marketing. When most marketing was one-way (i.e. customers couldn't react, respond and create messages of their own), it was more acceptable to separate PR from product marketing, and even lead generation activities. Now, especially because the customer has so much control and such a strong voice, it's critical that brands act as one. That means PR, advertising, social media, lead generation - they all need to work from the same playbook in a coordinated fashion. Easier said than done, but that's exactly what today's most successful brands are doing.

Social media has enabled the consumer to talk back in a powerful way, which is accelerating the need for this consolidation and integration of marketing strategy by products, services and brands today.


Question: PR is generally about placement, reputation, messaging, impressions and storytelling. Marketing is generally about transactions, click throughs, key words and web applications. How is social media changing that, if at all?

Matt: Everything is about getting the sale. It always has been, but now it's easier to see and map the progression of a customer from awareness, consideration, intent, trial, purchase - then repeat, renewal, referral, etc.

Social media is blurring the distinction between customer engagement stages. Ten years ago, it was easier to segment the functions - PR talks to the customer at the beginning, then product marketing takes over and offers demos, free trials, etc. Then once they're a customer, your loyalty/retention team takes over. That approach doesn't work anymore.

The way we measure different marketing elements, by function, probably still works. But it has to be put into the context of a more immersive, cohesive customer engagement strategy that blends messages and tactics across stages of a customer relationship.


Question: What disadvantages (inefficiencies, lost opportunities, customer confusion) and advantages (integration, cost savings) are these shared tools like Facebook and Twitter creating for PR and marketing?

Matt: The sales cycle has always been far shorter than the customer's buying cycle. Five years ago, the customer buying cycle was a black box for marketers. We had no visibility to what was happening, what prospective customers were thinking or asking, who they were even considering. Now, thanks to social media, we have insight into how customers are thinking well before they engage directly with brands.

But this isn't an opportunity for selling. It's an opportunity to engage and become part of the community - add value, answer questions, provide valuable content. Earn trust, respect and credibility. Community engagement and social media are at the very top of the buying cycle, before the sales cycle, and it doesn't really matter which part of the organization manages and executes there, as long as the approach is right.


Question: Should social media ultimately be the responsibility of PR who manages reputation and conversations or marketing who is in charge of transactions and sales?

Matt: It doesn't really matter. Everyone in the organization needs to understand the customer, what they want, what they need, and how to address them - with or without a paid relationship current or pending. Every member of your organization should know how to address customers in a respectful, value-added way.

Social media has accelerated the tearing down of walls between customer and provider. There's more transparency, less formality. Brands need to be accessible, approachable and authentic to be accepted.

The social media strategy doesn't end when a customer enters a selling cycle. They aren't going to stop talking to their friends, and using Facebook, or commenting on Twitter, just because they're talking to a sales rep. Their interaction with and reflection of your brand continues across functional sales & marketing groups. That's why ownership of the social media "voice" within one marketing function or another is problematic. Today, that strategy (and especially the execution) is a job everybody has.


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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

What's in a Name?

Lessons in Insights & Innovation From Anti Monkey Butt Powder

by Mark Prus

I am a professional name developer, and I like to gather opinions about product names. Earlier this year I posted a Twitter Poll to gather opinions on Anti Monkey Butt Powder... Good Name or Bad Name? The results indicated that about 70% of people thought Anti Monkey Butt Powder was a bad name.

However, the real learning came from the comments I received about the posting. The people who thought it was a bad name were making fun of the name and the product. The people who thought it was a good name were people who suffered from what might be described as a "chafed butt" due to extended horseback riding or motorcycle riding or truck driving. Several claimed to be consumers of the product and they were very defensive about the name... they thought it was perfect.

So what is the lesson on insights and innovation? It is very simple... do a great job of developing consumer insights behind your product and those insights will lead you to terrific ideas, such as a novel name for your product that speaks loudly to your target market. Who cares about the majority of people who might ridicule your product? What you should really care about is the "passionate minority" who will turn into loyal fans!

The owners of Anti Monkey Butt Powder did a terrific job of identifying with their very narrow target market. The "problem" of having a chafed butt is not one that everyone has, but if you do have it, you understand what Anti Monkey Butt Powder is designed to do. If you do not have this "problem" then it really does not matter what you think because you will never buy this product.

I chose Anti Monkey Butt Powder for the Good Name Bad Name poll because I thought it was a clever name, but when the passionate responses came in from people who identified with the product, I loved the name even more!


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Mark Prus is a marketing consultant who offers a name development service called NameFlash^SM.

Will Spiderman be real soon or is it just hype?

by Idris Mootee

Every time there is a new product launch, there is always hype around how innovative the product is. Not all innovative new products deliver on the hype like Apple. Although the Segway was a big engineering achievement, it didn't live up to the hype. Its sophisticated system of dynamic stabilization certainly showcases electronic engineering excellence and did deserve some hype, but not to the level it soared.

Paul Graham's recent essay about why the Segway failed to change the world is interesting. He focuses mainly on the fact that the Segway basically makes people look dorky - and that a better design might have helped more people find it enticing. But at the end he notes:


"Curiously enough, what got Segway into this problem was that the company was itself a kind of Segway. It was too easy for them; they were too successful raising money. If they'd had to grow the company gradually, by iterating through several versions they sold to real users, they'd have learned pretty quickly that people looked stupid riding them. Instead they had enough to work in secret. They had focus groups aplenty, I'm sure, but they didn't have the people yelling insults out of cars. So they never realized they were zooming confidently down a blind alley."


The Segway Human Transporter (HT) was no question one of the most hyped engineering projects of the last 12 or 30 years. Starting with "managed leaks" to the press, the secret $100 million "Ginger" project that VC John Doerr said "could be bigger than the Internet." I can't think of anything bigger than the Internet. People then were guessing it was some sort of space program.

Apple's new iPad was also very hyped before it launched. It is a great product no question, but essentially the iPad is a big iTouch, or iPhone, doesn't have a camera, doesn't use facial recognition and doesn't have any advanced interactions design or high definition video.

But not all interesting ideas get over-hyped...

Here's a good idea which has the right ingredients for hyping up. A bunch of engineers have invented an adhesive technology has taken its cue from the gravity-defying gecko, but the Cornell team looked elsewhere - to a beetle native to Florida that can stick to a leaf's surface, through wet adhesion, with a force 100 times its own weight. What does this mean? We are talking about the possibility to mass-produce Spiderman capability. Cornell University researchers Paul Steen and Michael Vogel are working on a palm-size liquid-adhesion device that could enable movements just like Spierman's arachno-riffic moves. The design is based on bonding methods observed in the beetle. Their research was funded by the Defense Advanced Research Projects Agency (DARPA) and the National Science Foundation.

The first application may be for the military. It is highly likely that there will be a 'Spiderman' team. Not sure they will adopt the stretchy red and blue tights. The mechanism includes a flat metal plate with micron-size holes and sits atop another piece holding a liquid reservoir. In between is a porous layer. An everyday 9-volt battery pumps tiny droplets of liquid through to the top layer and the surface tension of the exposed drops makes the device grip another surface. Just make sure you don't run out of battery while you're outside 29th floor of a building.

Many science and technology innovations are hyped by the media. Nanoscience and Nanotechnology are hailed as some of the most exciting areas of science with promised to our current and future problems. But translational research in the emerging areas of nanoscience and nanotechnology is sophisticated, complex and expensive and the hype around the technological advance often overstates the applications of nanotechnology. But in this case, Spiderman may soon be real...


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Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

10 Simple Ways to Stay Connected

by Matt Heinz

No matter what you do for a living, an active network is critical to your current and future success. That said, it's very easy to ignore the often simple, tactical things you can do to keep your network engaged and growing.

Here's a list of ten things to consider doing daily. If ten is too much to start (although this list should take all of 15-20 minutes if you stay focused), start with just 2-4 and expand from there. Each piece incrementally will help, and you'll be surprised how quickly your investment comes back in the way of opportunities, introductions and more.

1. Email three people you haven't spoken with in some time, just to catch up
   
2. Scan your LinkedIn home page for profile updates, and comment back on 2-3 that are particularly interesting to you
   
3. Use Gist.com to see what your contacts have done, read or published recently
   
4. Send one hand-written thank you or congratulations note to someone
   
5. Return one phone call or email from a sales rep. Make it short, but return the connection. You'd be surprised how often these turn into something more valuable than the pitch.
   
6. Give someone an unsolicited recommendation in LinkedIn
   
7. Scan your blog RSS feed, and forward 1-3 articles to people you think will find them interesting or valuable
   
8. Invite someone to lunch today. You have to eat anyway. If they say no, they're happy you asked. If they say yes, you get a valuable chance to reconnect.
   
9. Thank someone for the hard work they did yesterday, and copy their manager if sent via email
   
10. Send an unsolicited email to someone you've always wanted to meet, asking for a quick phone call or coffee. Do this daily, and I guarantee your response rate will be better than zero.

What would you add to this list?


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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

January's Top 10 Innovation Posts

This year I thought I would experiment with a Top Ten list at the beginning of each month, profiling the ten posts from the previous month that generated the most traffic to Blogging Innovation. So, without further ado, here are January's ten most popular innovation or marketing posts:

1. 10 Lessons Learned from 2009 - by Holly G. Green


2. Top 10 Innovation Articles of 2009 - by Braden Kelley


3. Microsoft - Apple - Google in Tablet Battle - by Braden Kelley


4. Three Enterprise 2.0 Themes to Watch in 2010 - by Hutch Carpenter


5. Apple Tablet Sneak Preview - by Braden Kelley


6. Apple Tablet Won't Be Runaway Success - by Braden Kelley


7. Should you be measuring ROR instead of ROI? - by Ric Merrifield


8. Presenting Twitter in Search Results - by Hutch Carpenter


9. 10 Signs That Innovation Will Fail - by Stefan Lindegaard


10. What is Design Thinking? - by Venessa Miemis

If you're not familiar with Blogging Innovation, we publish 2-3 new articles every day built around innovation and marketing insights from our roster of contributing authors and ad hoc submissions from community members.

Join our Continuous Innovation group or subscribe to our RSS feed to follow along.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Two Biggest Mistakes in Social Media

by Mike Brown


What are the two biggest mistakes in social media marketing?

1. Believing everyone sees your content

2. Believing no one sees your content

In the first instance, thinking you can simply dabble in social media and get lots of people to see what you're saying doesn't work. For nearly any traditional brand (and @shitmydadsays isn't a typical brand) wanting to talk about itself, audiences don't spontaneously emerge. It takes time to create an effective fan/follower base. Simply picking a fast-approaching date and saying "implement Twitter (or Facebook) by such-and-such date to get our message out" is asking for disappointing results.

The second mistake rests on the assumption you can ease your way in, make some mistakes, and find your social media footing. Maaaaaaaaaaaybe. But there are too many counter examples of brands that screwed up and got burned because of not knowing, understanding, or working within the evolving conventions of social media. If you've got a brand worth anything, you need to be ready for prime time the instant you step on the social media stage.

How do you avoid these terrible two?

Focus first on developing a solid social media strategy and ignore the ridiculous peer pressure you may feel to create a social media presence ASAP. This is a game made for deliberate, smart followers - not fast, unprepared, first-movers - to win.


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Mike Brown is an award-winning innovator in strategy, communications, and experience marketing. He authors the Brainzooming TM blog, and serves as the company's chief Catalyst. He wrote the ebook "Taking the NO Out of InNOvation" and is a frequent keynote presenter.

Role of Social Media in Creating Word of Mouth and Customer Experience

by Paul Williams


What's the role of social media in creating Word of Mouth (WOM)?

You could say there are two parts to WOM - the analog and the digital.

• Analog is person to person... face to face. I'll also put written and print media into the analog category.


• Digital WOM is converted and stored in a format that can be sent and re-sent electronically.

Social media refers to tools that allow us to easily spread the story electronically, digitally. Like a pyramid marketing scheme I tell my network, and they tell theirs, and they tell theirs... Social media tools (blogs, Facebook, Twitter etc) make the spread easy.

In fact, I may have to contradict my earlier statements indicating that Malcolm Gladwell and Seth Godin are the father's of Word of Mouth (WOM).


The REAL Originators of Word Of Mouth

I think the folks who wrote the Faberge Organics Shampoo commercials in the 80s invented it.

Do you remember those ads?

If you tell two friends about Faberge Organics shampoo with wheat germ oil and honey, they'll tell two friends, and so on... and so on... and so on...

Sorry about the poor quality - this is all I could find.


(Feed Link For Faberge Commercial)


Has the focus of Social Media had a negative effect on the Customer Experience?

I'll say potentially, YES. Marketers dazzled by the shiny object that social media is, may think they've solved their communication problem - or are engaging in a 'meaningful' way because - for example - they've created a Facebook Fan Page for their business.


False Sense Of Security

Let me pick on one of my favorite brands, Starbucks Coffee, as an example. Specifically, their "My Starbucks Idea" website. Through this site, Starbucks welcomes everyone to submit product, program, design, service, or ANY idea.

The My Starbucks Idea home page declares:


"You know better than anyone else what you want from Starbucks. So tell us. What's your Starbucks Idea? Revolutionary or simple - we want to hear it. Share your ideas, tell us what you think of other people's ideas and join the discussion. We're here, and we're ready to make ideas happen."

• Starbucks thinks they are listening.


• Customers think Starbucks is listening, and taking action.


• Starbucks thinks they've "checked the box" (to some extent) in being a social media player by having this site.


• Power to the people!

However, if you look at the "milestone" of the 50 Ideas Launched and Still Counting! - celebrating customer ideas implemented - Starbucks has technically only implemented six (6) ideas submitted by customers. If you dig into it - as John has on his Brand Autopsy site in his Tough Love For Starbucks post - you'll see that most ideas were already in the works, would have been done anyway, or aren't even customer-facing ideas (e.g. Employee discount on work clothes).

A problem with social media is that companies may think - simply by participating in the trend - that they're meeting customer need. Starbucks has invested in this suggestion site and believe they are checking the "we care and listen to customers" box. They think they've fulfilled the portion of their strategy, that supports the objective: to "Develop enthusiastically satisfied customers all of the time."

Starbucks isn't being as democratic with ideas as they claim (and think) they are. It really isn't "power to the people." Social media (or maybe improper use of social media) is giving Starbucks a false sense of security.

Social media isn't for everyone. To "engage in meaningful conversation" may actually mean a conversation. A face-to-face, human-to-human dialogue. For example, the kind a barista can have with a customer at Starbucks.


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Paul Williams is a professional problem solver at Idea Sandbox. He can help you create remarkable ideas to grow your business. You may read more at his website and find him Twittering as @IdeaSandbox.

Creating Preference in a Commodity Business

by Matt Heinz

I was asked recently how to successfully sell value in a commodity business. When your product or service is virtually identical to what is available elsewhere, how do you create differentiation, preference, value and market share acceleration?

It's not easy, but there are ways. Here are five to start:

Service: How well you treat your customers can make a big difference, especially if you want to be a premium-priced commodity seller. Customers who don't value service will always buy on price, and if you want to be the low-cost leader, that's fine too. But if you want to sell value with a commodity, provide excellent, remarkable service at every level and every interaction with your customers and prospects.

Trust: What's your reputation? What are you known for? Do customers trust you, and why? Know what your customers value, and establish a tight bond between those values and the trust you create and strengthen in the way you do business, every day.

The Little Things: There are countless ways to do little, remarkable things for your customers. Unexpected things that make you stand out, thoughtful gestures that show you're different, and that you care. Real estate agents who bring new buyers a pizza or sandwiches on moving day, that's special. Auto dealerships that offer free car wash service for life. Things like that can be huge for differentiation and preference, not to mention word-of-mouth for your business to new prospective customers.

A Consultative Approach to Selling: Are you just selling the commodity, or are you providing additional value in the sale? Are you teaching customers more about the industry they work in, the environment in which they need that commodity. Are you helping them be more successful in the process of buying? Provide that kind of value-added service as part of the sale, and you're creating immediate value & differentiation.

Results: A commodity market doesn't necessarily mean that every option is the same, and will deliver the same results. How are you able to transcend what you're selling, and deliver differentiation and value in how that commodity impacts your customers? Is the end-result better through you? How? And how effectively can you communicate that results-based differentiation? Let your happy customers tell that story for you. Use their enthusiasm and success in the market to drive preference and value.


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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Solid Service Principles are Crucial

by Damian Kernahan

Below is the latest blog I just received from Seth Godin. He (as he does most days) makes an important point especially for Service based companies and provides additional reasons why Service Design can be such a potent weapon for progressive companies.

It's not JUST the steak or the phone call or the insurance cover that your customers are buying when they look to buy something from you. It's not JUST the all the elements that make up the customer journey and everything within it. The touch-points that deliver it, the spaces where engagement with customers occurs through channels such as in-store, call centre, postal mail, or online. The 'moment' within each touch-point where there is an interaction and your staff or systems engage with your customers.

These are all crucially important and without it, your business will not thrive and grow new and recurring revenue streams. But how do you handle situations when the unexpected happens. When there is no script, no exact procedure?

We have been working with a large Australian based firm recently who is acknowledged as a great Service Innovator and relative to their peers, they are head and shoulders above in terms of customer experience and growth. However they also know that their competitors are quickly imitating them in marketing, minimising the perceived gap. It's time to leap ahead again with a sustainable differentiator.

Having developed deep insight through design research methods we have developed innovative human centered Customer Journey Maps, an Experience Strategy and undertaken Intention Engineering.

However you cant stop there. On top of that we have developed the mortar that holds all those bricks together. It's a set of Service Principles that allow their team to take the right decisions each and every day when there is no touchpoint, no planned interaction. It provides an important guide, a set or principles on how to act to remain customer focused even when no-one is looking and no one is listening. It fills in all those 'in between moments' that all add up to the delivery of an exceptional customer experience and transformed loyalty and profitability for companies.

As is quite often the case, the ideas are the relatively easy part, the real expertise comes in how you hang it all together and make it work in a repeatable, sustainable manner making it work within your clients organisational systems and infrastructure. That is our singular goal here at Proto Partners and should also be for each and every Service Design firm.


Seth's blog entry is below

Scott McCloud's classic book on comics explains a lot more than comics.

A key part of his thesis is that comic books work because the action takes place between the frames. Our imagination fills in the gaps between what happened in that frame and this frame, which means that we're as much involved as the illustrator and author are in telling the story.

Marketing, it turns out, works precisely the same way.

Marketing is what happens in between the overt acts of the marketer. Yes you made a package and yes you designed a uniform and yes you ran an ad... but the consumer's take on what you did is driven by what happened out of the corner of her eye, in the dead spaces, in the moments when you let your guard down.

Marketing is what happens when you're not trying, when you're being transparent and when there's no script in place.

It's not marketing when everything goes right on the flight to Chicago. It's marketing when your people don't respond after losing the guitar that got checked.

It's not marketing when I use your product as intended. It's marketing when my friend and I are talking about how the thing we bought from you changed us.

It's not marketing when the smiling waitress appears with the soup. It's marketing when we hear two waiters muttering to each other behind the serving station.

Consumers are too smart for the frames. It's the in-between frame stuff that matters. And yet marketers spend 103% of our time on the frames.


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Damian Kernahan is the managing partner of corporate growth consultants, Proto Partners, www.protopartners.com.au.

How is Innovation Like Pornography?

by Jeffrey Phillips

I made what in hindsight is a fairly funny mistake recently. Working with a new client who wanted to become more innovative, we pressed ahead into a project only to realize that their definition of innovation was to have customers interact with their products in a technology showcase. When I think of "innovation" I think of teams using a number of tools and techniques to generate and bring to life new products, services and business models. When this team said "innovation" that's what I thought, and what I assumed. What they were thinking was something else entirely, and that didn't become evident until we developed a workplan. Then, the differences in the expectations and definitions were clearly exposed.

We failed at what should be an upfront discussion - that is, what does innovation mean to your firm? I've been around innovation so long that if I'm not careful I just assume that corporate executives that I'm working with have the same expectations and definitions as I do, and that can be very problematic. Definitions matter because they drive corporate expectations and commitment. If it seems "innovative" to have your clients interact with your products in a showcase environment, and that adds value to your organization, great. But in my mind that's not innovation. And also not my client's fault. It's mine, for not taking the time to understand what the word "innovation" meant when they used it, and what their expectations and best outcomes were.

Innovation is one of those words like "pornography" that, in the immortal words of the Supreme Court can't be defined, but we know it when we see it. Our client thinks it will be considered "innovative" if it allows customers to interact with its products in a high tech, high touch environment. They may be right. However, that's not really "innovation" in my mind, because they are not trying to use the facility to generate new ideas or bring new products and services to market. The center may become a marketing program, meant to create good will and more openness to the market, but not ascertain ideas or seek consumer input. This won't create new products and may divert funds from other efforts that would create new ideas, so it may be doubly risky, while seeming very innocuous.

The morale of this story is simple. As innane and obvious as it may seem, when the words "innovative" come out of your client's mouth, stop and ask for an example or a definition. If they can't provide one, then work with them to create a definition that you, and they, agree is correct, because there's simply too much room for assumption, and error, when the word is taken at face value. Too many firms, and too many people are simply throwing the word around for advantage, which leads to misguided expectations and disappointed consumers.


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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

A Branding Lesson From Leno

by Steve McKee

The big news this week in Medialand is NBC's decision to cancel The Jay Leno Show and move the eponymous comedian back to a late-night time slot. About the short-lived experiment, Jeff Gaspin, NBC Universal's Chairman of Television Entertainment, said, "I don't think it's wrong to take chances... Sometimes they work. Sometimes they don't."

Fair enough. But with a little more imagination, NBC might have been able to predict the outcome. The much-hyped decision to launch The Jay Leno Show was made in part based on economics - it's a whole lot cheaper to produce an hour of live TV than an episode of Law & Order. While the show was profitable for NBC, it's not terribly surprising that it would lag its competition in the ratings - especially in its first season, when loyal viewers of competitive offerings were caught up in current storylines.

The Jay Leno Show's low ratings created a "lead-in" problem for NBC affiliates, who rely on audience carryover to provide viewers for their late local news. Michael Fiorile, chairman of NBC's affiliate board, said NBC's Leno strategy "has been devastating for a number of late newscasts around the country."

While that's unfortunate, it also underscores an unhealthy dependency that too often blinds local news providers to their task. And it provides a valuable business lesson for us all.

Most people tend to think of the television industry as something "other" than the product and service sectors that comprise the rest of the economy. But in reality it's no different. Television news is a "product" that consumers "buy" (we pay for free TV with our time), and competitors are called to offer their prospective customers an experience that is unique, relevant, and valuable, just like any other business.

When a local affiliate complains about the network not offering a good enough lead-in for its local news, it's like McDonald's complaining that the Burger King across the street has better access to traffic. While that may be true, it can also serve as an all-too convenient cop-out. McDonald's job is not to complain about the way the street is designed, but to get people to cross it - by offering something intriguing and unique (a task the company has performed quite well in recent years).

That's where TV news falls down. Local news directors too often live in a "be better" bubble. That causes them to overstate the impact of their slogans, overvalue being first on the scene of an accident, and overpromote their handsome/pretty/ smart/honest/capable/talented/sincere news anchors. If they instead applied their intelligence and intensity (the news directors I've met have both in abundance) to seeking new ways to truly differentiate their offerings from the competition, we could see some real innovation in how local news is delivered. I suspect most viewers - and most people in the industry - would agree that there's plenty of room for improvement.

Jay Leno is proven product whose success is in part dependent on how well he's packaged and distributed. Local news is no different, and as Gaspin said, it's not wrong to take chances. If only more news directors would.

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Five Nonprofit Marketing Fundamentals

by Matt Heinz

We've been working more closely with several local nonprofit organizations lately, and the more I speak with those responsible for fundraising and donor relations, the more I realize just how similar the process is to creating and managing a for-profit sales process.

I'm also seeing the same fundamental needs for those marketing a charitable cause or nonprofit organization. The below five fundamentals of nonprofit marketing are a starting point, but should be at the core of every nonprofit's strategy.

Donor Profiles: There are so many worthy organizations out there. Which prospective donors are going to be most predisposed to support your cause? What do those potential donors have in common - their associations, their history, their demo or psychographic make-up? You don't need to hone in on just one specific donor profile, but you should have a good sense for the 2-4 profiles that are your primary target. The more you know about them, the more self-evident the messages, channels and tactics will be to engage them directly.

Defining Your Product: What are you "selling" to prospective donors? It's not the tactics of what you actually do, but the outcome of that work. All too often, nonprofits tell their donors about the operations, or what additional infrastructure or materials they need. But what is all that for? What are you enabling? How are you making lives better? What's the benefit, the result, the outcome of what you're doing? THAT is your product, and that's the kind of vision your prospective donors will be attracted to.

Storytelling: Spend less time describing what you do, and more time telling stories about the differences you're making. Tell stories about the recipients of your work. Share the before and after. When it's an option, let the recipients of your work tell the story for you - in print, on video, and in person. Stories make an impression far longer-lasting than mission statements and operational descriptions. Stories can communicate the emotion behind what you're doing better than anything else.

Mobilizing the Community: Take your product definition, your mission, and think carefully about the ecosystem of people, groups, organizations, communities and businesses that relate to it. How can those various individuals and groups help you spread the word, or even contribute directly? If you're involved in transitional housing, how good are your relationships with local real estate offices? Are they giving directly? Are the individual Realtors involved, and getting their own buyer/seller customers involved? Be exhaustive and creative about mobilizing related communities on behalf of your organization.

Creating Evangelists: You have them already. Passionate donors. Highly-involved volunteers and board members. A variety of individuals and groups who feel strongly about what you're doing. No matter their level of passion, they won't help spread the word as widely as they could if you don't help them. Give them reminders to do so, give them content to pass along, give them the facilities and tools to share. This alone can be so simple, but so powerful. Identifying, arming and mobilizing the evangelists in and around your organization can be the very foundation of your marketing strategy.

Over the next several weeks, I'll go deeper into each of these fundamentals with more examples and suggestions for action.

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.