A white paper just published by Business Wire titled “State of the Press Release” reinforces what I have posted in my previous blogs about the enduring power and growing flexibility of the news release.  The white paper aptly asserts the news release “has evolved into a Swiss army knife of communications tools that can address myriad of marketing and communications challenges.”

Some of the more interesting factoids presented in this white paper are:

1. Business Wire issued more than 288,000 press releases in 2009, and it estimates that a million more were sent out by other news services. One study suggests that a whopping 1.7 billion are sent out via email annually.

2. The news release has morphed into a multi-purpose marketing tool. When treated as an interactive web page with links, multimedia and tags, can perform and deliver results from multiple platforms and devices: the computer, the television or your mobile phone.

3. A decade ago, a news release would sit at the altar of journalists, hoping to be “picked up,” rewritten and published. Today, it’s likely to skip gatekeepers altogether and jump straight to the screens of target audiences.

4. As more and more journalistic gatekeepers have been downsized or laid off, social networking sites like Twitter and Facebook have assumed a role as community plaza where information is shared and exchanged. Skim any social networking site – or simply search the word “news release” on any of these sites, and you’ll find that releases account for a hefty percentage of content.

5. Treating your release like an interactive webpage can further amplify your message/content and its usefulness. Links to a chart, map or URLs that direct readers to deep content on your website can enhance the understanding of your product, service, company or point of view.

6. Business Wire asserts that one of the most important things you can do to get your press release to stand out is add a logo, graphic, photo, video or other multimedia element. Its internal research shows that press releases with any kind of graphic or multimedia generate 2.5 times as many clicks as text-only releases.

I recommend this white paper to anyone still wondering about the currency and power of the news release, which has come a long, long way since the first one was issued 104 years ago by Ivy Lee for the Pennsylvania Railroad (see my first blog entry  ”News Release Evolution: In The Beginning” for details on this historic event.)  This white paper can be downloaded at no charge at http://glomosome.businesswire.com/

Does the salesforce actually look at sales leads?

The ugly truth is a lot of “sales leads” go right into the trash can without even being opened.  I’ve seen it happen more times than I can count.  And at the same time they’re going in the trash, some media buyer back in marketing is listening to a sales pitch telling him that XYZ media  is delivering thousands of qualified leads coming in from the company ads and press releases.  What’s going on here?

When you drive by a billboard on the freeway, are you counted as a sales lead?

Of course not.  You may not have even noticed the billboard, let alone read and internalized the message.  Even then, you may not be in the market for that product or service.  The same thing is true of readers responding to ads or visiting the company website.  If they have not been qualified in some way, they’re basically just people driving down the freeway.  Of course in the case of the website, unless the visitor registers in some way, you would never have their contact information anyway.

The qualification process turns freeway traffic into real leads

My first job in marketing was running a little digital chip line.  I did everything from set the prices to get the datasheets written and published, train the salespeople on the line, etc.  And during the average day a half-dozen potential customers would call in looking for information on the line.  Usually they had seen an ad or a press release reprinted in one of the trade Gee-Whiz magazines.  One step up from freeway traffic — they had at least seen the billboard and read it.

During the discussion that followed, at some point they would request more information, typically in the form of datasheets.  This was before the web, so that meant mailing them copies.  And that meant they had to give up their address.  Someone that has just given you their mailing address will almost always give their phone number too, if you just ask for it.  Sometimes they’d ask for prices, and while I normally don’t believe in giving out pricing directly from marketing to customers (it should always go through sales), it was hard to avoid.  But we had a printed price list for small quantities, and I could give those out without stepping on anyone’s toes… those prices were on the high-side so the salesperson always had the ability to “work the pricing” for the customer.

Now I had to write this stuff down somewhere.  I did it during the phone call on forms I had created (in those days that just meant drawing some lines on a piece of paper with labels and running off a hundred or so on the copy machine).  At the end of the call, the form was handed to my secretary and magic happened… literature got sent, and… this is important… a copy of that form went to the appropriate salesperson in the field.  Knowing the mailing address automatically meant we knew who the closest salesperson was.  They got the copy, saw that literature had been mailed, what had been discussed, what the application was, etc.  After a week, the salesperson picked up the phone and called the prospect to be sure the material had arrived and see if they had any questions.  Now that’s a sales lead.

Real sales leads deserve follow-up

In those days offices across the country all had metal desks and on the top left side was a pullout panel that people invariably taped the office phone list to.  In my case, I kept a sheet of paper listing the deals going down that week for my product line, organized by sales area.  Each customer name was followed by two numbers which represented my worst-case and best-case guesses of the size in dollars of the deal.  About twice a week I would get into the office early… 5am (I live and work in California so 5am Calif time was 8am in Boston, Baltimore and Florida).  I’d call the sales offices on the East Coast and chat with the sales people about the deals going down in their area, what remained to be done, what was holding up the close, etc.  And then I’d run through the forms of customer phone contacts from their area, and we’d chat about their applications, who the competition was, etc.  After an hour, I’d start on the Midwest sales offices, and work my way across the country.  Those two things… the phone forms that were my version of sales leads and the followup phone calls once or twice a week made the whole thing work.  I believe that they were the real reason for my success and everything else was just details.

What makes up a real sales lead?

A real sales lead should have the complete contact information… enough so you can figure out who in the salesforce should get it, and enough detail that they can contact the prospect.  It should have a brief description of their application — how they plan to use the product.  And it should state what the next action is… follow up phone call, etc.  Those things are the bare minimum.

Of course the process does not need to start with a phone call.  It might happen at a trade show.  Most people walking the aisles have their badges swiped at booths of interest, but these are the freeway people.  The real sales leads are the people who are willing, or best of all volunteer their business card.  You can write a couple of cryptic words on the back, and bingo… a real sales lead.  A walking, talking prospect who is asking to be contacted (that’s why the business card instead of a badge swipe).  Pure gold.

Use Targeting Techniques to Reach High-Value Potential Customers Directly

We’ve talked about how traditional advertising in space-ads in trade magazines and TV is not effective when trying to reach narrow demographic segments.  For this, techniques like direct mail were used.  You would use a list containing just the names and addresses of the category you needed and simply send them your material.  To give you an idea of how this worked, I used a list service called TIDS — Technical Information Distribution Service.  TIDS had the names of over 100,000 designers in the electronics community, and had them all sorted by company, company size, title, etc.  Then they had those people fill out a questionnaire that listed all of the possible categories of products… they could pick as many as they wanted.  These were the product categories they were interested in receiving material on.

In the case of reaching the 100 engineers designing disk controllers, all we needed to do was call TIDS and instruct them to sort on that product category.  They would give me the exact number of people in their database and we’d send them the material to send.  Talk about targeted!

To give you an idea of just how targeted, I once saw AMD use a TIDS mailer to recruit some hard-to-find analog designers.  It turned out there were very few in the country, but a group was working at Harris Corp in Melbourne, Florida.  AMD prepared a recruiting ad and sent it out as a TIDS mailing.  It looked like it had gone to the entire country, but in fact only about ten copies were actually sent… all to the zip code of Harris.  If Harris realized the ad had only been sent to a few of their employees, they would have been upset, but they never knew.  You might wonder how I happened to know, but let’s just say that chip marketing in Silicon Valley is a small community.

Using Search Engine Ads

TIDS is long gone, and as much as I bemoan their disappearance, direct mail has pretty much disappeared too.  Fortunately there is a new way to do this, in many ways better than TIDS.  That way is buying search ads on sites like Google.  Think about it.  We never really knew if the people that checked the box on the TIDS questionnaire for 16-bit microcontrollers were really using them… they might have just been casually curious.  Personally I would guess that at least half of the checked categories on those questionnaires fell into the  casually curious area.  But if you were to buy the search term for 16-bit microcontrollers, you can be pretty sure the people are more than just casually curious… they’re so curious they’ve taken the time to type that term into the Google search box.  That’s a LOT better.

Of course, limiting these people to just those in Melbourne, Florida gets tricky, but why bother?  You could just as easily have bought the search terms covering people looking for employment as analog designers.  That would actually be a wider, richer net than just the Melbourne zip code.

Advertising and Direct Mail are NOT Dead

Although a glance at the size of most magazines today show a big drop, there are still products that are well suited to conventional space ads.  Remember that because of the fixed ratio of ad pages to editorial pages, a 10 page drop in ad pages probably results in an addional 10 page drop in editorial pages too — a total of 20 pages!  Look at the ads that are left.  The cigarette ads have disappeared, the car ads are greatly reduced, but beer still sells well in all of the broad audience publications.  And there’s still lots  of travel and medication ads.

Direct mail has fallen off a lot due to a combination of higher postage rates and folks’ growing ability to just ignore it and toss it, unopened.  Traditional wisdom was that direct mail response rates were around 1% (1% of the mail sent out resulted in sales), but I think that was always pretty optimistic.  I’ve done this stuff from time to time and the average was closer to 0.5%.  In fact, I always designed these campaigns to break-even at a response rate of 0.25%.  Catalogs have always done far better than this though.  I’ve seen many cases of 2+%, and have heard of catalogs that ran in the 4-5% response rates.  Not surprisingly, the direct mail I do still get is largely made up of catalogs.

99% of the websites out there are hoping to attract advertisers.  Most will fail in this endeavor, especially in these days of sharply reduced advertising budgets, but a few will succeed and give hope to all the others.  Look at the situation through the eyes of the advertiser.  It’s easy to “buy” zillions of eyeballs. It just takes money… a lot of it.  That’s what Budweiser does…

But no advertiser is really looking for zillions of eyeballs.  The key is getting the RIGHT eyeballs.  Very few products command a market as large as Budweiser, and that means very few can utilize mediums like TV effectively.  The problem is that, for most products, most of the TV eyeballs are not potential buyers so that most of the advertising dollars are being wasted.  Let’s say you’re trying to sell spjecial chips for building disk controllers.  How many potential buyers are there for these things?  100??  And actually you don’t necessarily want to talk to buyers and purchasing agents.  You’d probably be far more interested in talking to the engineers designing these systems or subsystems to convince them to use your chip in their next design… that’s a smaller set of people and one that’s even harder to reach.  Really think you’ll find them watching Desperate Housewives?  Maybe, but so are 10 million other people and you have to pay the network for all of them too.

OK, so TV advertising is not appropriate… what next?  A good choice might be what are termed “space” ads — generally magazines.  Now you’re probably not going to advertise in Time magazine.  It has the same problem as TV… it’s too broad.  What you’d really like to find is a publication called Disk Controller News… but if there are really only 100 potential readers for this subject, it’s extremely unlikely that there would be a magazine just for them.

That means we’ll have to find a compromise magazine, one that has our 100 target readers without too many others.  To put hard numbers on this, there used to be a magazine called Computer Design with a circulation of about 80,000 readers.  Buying a full 2-page spread (so you can tell the whole story) cost about $15,000.  That meant that running our disk controller chip ad in Computer Design was costing us $150 for each of our 100 target readers… certainly no bargain.  Another way to look at is is that you’re paying for 79,900 readers you don’t care about.

To be fair, this is a terrible example to use in a space advertising environment.  The target audience is so narrow and so specialized, the numbers will always look terrible.  A real-world advertiser would never run a large ad targeted at such a narrow group of readers.  It’s just too expensive.  Instead, they would run an ad covering multiple chip families, one of which was the disk controller chip.  That would spread the cost of the ad out over many more readers.  Of course, it would also limit the message you could deliver for each chip.

But this just makes our point.  If you could find a way of targeting readers in a more effective way, it would make it feasible to promote much more specialized types of products.  That’s what the web does or at least tries to do.  Now don’t misunderstand here.  It’s very easy to spend $15,000 on a website to promote a set of complex, highly specialized set of chips.  In fact, you could easily spend much more.  But if you could somehow attract those 100 target individuals to the website, you could turn them into a community and proactively interact with them and make them part of your process, from chip design to sales cycle.  That’s a lot better than paying $15,000 EVERY time you ran the magazine ad in the hopes of catching the readers you were targeting.

When you build a website dedicated to something as narrow as disk controllers, you are essentially becoming a publisher on that subject.  In the heyday of trade magazine publishing, there were six main magazines and another dozen or so second tier publications with lower, slightly more specialized circulation.  There was no way to beat the problem of buying all those extra readers.  But with the ability to create dedicated websites, it’s as though Disk Controller News just sprang into existence.

Understanding the advertising world is key to understanding all of promotional marketing.  That’s because the principles that were developed for effective advertising carry over to all aspects of the messaging job.  What’s more the business models and even the jargon used by the new media types like web-based advertising comes directly from the old print ad world.  Finally, understanding how to message and promote in these new still-being-defined media types is a market advantage, though not one likely to last too long.

There are lots of ways of approaching ads — of categorizing them — but I’m going to suggest a simple 3-way split.  It has the advantages of being simple and at the same time can teach us something about advertising in general.  Although Mindpik specializes in marketing for tech firms, this way of considering advertising is not limited to techie ads, but works at all levels.

First, are the “life-style” ads.  Their purpose is to just get the company name out there in front of the public.  The classic contemporary case is represented in the Budweiser TV commercials that show a horse team pulling a beer waggon with a Dalmatian dog perched on the seat alongside the driver.  The sponsor here is Anheuser-Busch and the name is prominent on the waggon, but that’s pretty much it.  Now ask yourself, does seeing a team of horses and a dog normally make you thirsty for a beer?  Probably not much.  These commercials are intended to make you feel good and associate that warm, fuzzy feeling with Budweiser beer.  They’re especially effective at the holidays when the message becomes, “Merry Christmas from Anheuser-Busch.”

The biggest problem with these kinds of ads is their expense.  They work well on TV, but they assume you already know the brand name… they’re just reinforcing it.  How did you get to know that brand name?  Because you’ve already seen many, many millions of dollars of their commercials already.  It’s hard to think of a case where a tech firm has used this approach, though Intel comes close to it with their Blue Man commercials.  Remember, no real message — just motherhood and warm puppies plus the company name.

The second category is “name + message”.  In print versions of ads in this category, there is usually a provocative headline plus a simple message tied to some graphics.  There are many TV commercials in this category.  One of my favorites are the PC vs. Mac commercials being run by Apple, with two actors playing the parts of PC and Mac.  Hillarious, simple 20-second spots that make a simple message statement such as, “Vista is broken.”  Done well, these types of ads are incredibly strong.  They make their case so strongly that people talk about them around the water cooler.  That said, really great ads in this category are very, very difficult to do.  When marketing people are trying to “sell” one of these ads, they use the term “snappy” a lot.

The third category is “name + message + information”.  This is my favorite because it’s so easy to do if you have a compelling case.  Yes, make your message statement and get the company name in there, but go on to tell a real story that goes into the pros (and cons) of your product in detail.  The best of these ads get clipped by readers and passed around, and they’re ideally suited for tech products.  When these ads are criticized, it’s usually in terms of being “too wordy” or “too much copy”.

When I think of the great advertising giants, at the top of the list is David Ogilvy, the founder of Ogilvy & Mather.  This is the agency that did the great VW ads, put the patch on the Hathway shirt man, and so on and so on.  He felt that the sole purpose of advertising was to sell.  That said, he was more than willing to break the “rules” in order to deliver that sales message.  One of those rules was to not have too much copy in an ad… no one reads a lot of copy.  Ogilvy would challenge people that he could write a full 2-page newspaper ad that was 100% copy in little, tiny newsprint and that people would read every word of it.  In fact, he would bet $20 on it… and then say, “Hold on, I’ll save you the $20… I’ll give you the headline… the headline is, ‘Everything you wanted to know about John Doe’.”  And if your name happened to be John Doe, you would, in fact, read every word of it!

These ads work well in print form, either as full-page ads or speads (2-page ads).  That’s because you need serious space to tell the whole story.  When I did these ads, I wanted to answer as many questions as possible so the next logical step for the reader was to buy or call us.  People frequently misunderstand these ads and how they work.  Someone will say, “This ad on how to design disk controllers with our chip… it’s too long.”  “OK,” I reply. “How many disk controllers do you design/build?   None… you make the chips.  Then you’re not a good judge.  This ad is for the engineers designing them, and the point of the ad is to show them in a single page how easy it is.  Let’s call someone who actually designs disk controllers for a living and ask them what they think.”

The key to these ads is to qualify the reader right in the headline.  A possible headline for this example might be, “The entire story on how to design great disk controllers.”  Now the readers that don’t happen to be disk controller designers will flip right by this ad, but those that do will pour over every word… will make copies of it and pass it around, will compare their current designs to the approach you’re laying out in the diagrams in that ad.  And you know what?  These are the only readers you really care about  — they’re your potential customers.  I like to get the company name right into the headline along with the most basic version of the message and a strong indication of who should read this ad.

In a nutshell, this is my approach to all of promotional marketing.  Identify the people you want to talk to… call them out by job title or applications area… and then tell them a complete and compelling story.

Next up… demographics.

In many low-tech industries, mention marketing and people think of advertising.  That’s not true in tech companies who tend to be organized around marketing viewed as Product Marketing.  That said, tech companies still do promotions and that certainly includes traditional advertising.  In many companies this activity is grouped with other related activities and labeled “Marketing Communications,” or MarCom for short.

Some of the things that typically fall under this group include but definitely not limited to:

• Advertising
• Public Relations
• Literature including data sheets, catalogs, brochures and sometimes annual reports
• Trade shows
• Preparation and coordination of industry trade show papers and presentations
• Managing the annual sales meeting
• Give-aways like T-shirts and other branded items
• Logo designs
• Tag lines
• Package designs
• Website creation and management
• and these days,  Presence on social networks

In some companies this can also include things like the logistics (location and staging) of the annual shareholders meeting, company parties, award ceremonies, etc.  One of the reasons all of these things are handled by one group is that group has the resources.  Generally they engage an advertising agency and sometimes a separate public relations agency.  In more sophisticated groups they will also hire an outside design agency to “design” templates for things like data sheets and catalogs.  Design agencies are frequently called in for specific jobs like brochures and especially for annual reports.

When I joined Intel it was to create that group — I called it the Merchandising Group though it would become known later by the more traditional term, MarCom.  Intel was running at $50M a year and doubling every year.  They had about 1500 employees many of which were offshore building parts, but that headcount was also doubling every year.  That meant that after just 12 months you had seniority over half of the people you passed in the hall.  The fact that Intel had gotten this large without a central group working literature, for just one example, was amazing.  Everyone in marketing was doing their own stuff working with outside services called paste-up shops, and everything looked different.  For one thing they had that “ransom note” look — I counted 9 different type fonts, styles, and sizes on the front page of one data sheet alone.  But just as bad, they didn’t look like they came from the same company!

I’m a big believer in having a “designed look” for a company.  Years ago I found myself on the Orient Express from Paris to Milan on, believe it or not, a sales trip.  It was quite an experience but one of my most memorable impressions was the look and feel of everything from the inlaid wood in the compartments to the towels in the bathrooms and the appointments in the dining and club cars.  They were all designed and executed by YSL — Yves St Laurent — and the consistency made everything look like it belonged.  That’s what I want to see in any company we’re involved with.  Getting that designed look is far less expensive than you would think, it’s mostly just knowing to ask for it.  This is the kind of thing that having a good MarCom group does for you.

In the next couple of postings (I haven’t written them yet so I don’t know how many) we’ll look at the basic things this group does.  But basically they all revolve around the concept of messaging.  If anyone but me understood it, that’s what I’d name this group — the Messaging Group.  But since people don’t get that, I tend to call them the Promotional Group.  I refuse to call them the advertising anything, because in many companies they really don’t do any advertising per se.  But they certainly do everything else on that list.  Now having brought up the subject of messaging, let’s focus on that.  This is a 3 part process.

First, you need to figure out the content of the message, not the exact wording, but what the message is supposed to convey.  And that content is not determined or set by the Messaging or Promotional Group.  It is determined by Product Marketing in conjunction with company management.  It says things like, “we build microprocessors for embedded applications that provide orders of magnitude more performance than competitors but sell for under $10.  While the applications we go into have been done before, they have never been done economically in a commercially successful product because of the expensive computing power required.”  OK, that’s some real content (literally real — we wrote it for a past client).  Unfortunately it’s not something you can put on a postage stamp or a T-shirt.  This content is delivered to the Promotional Group — it’s their input for the messaging process.

The second step is creating a memorable message from this.  The marketing poetry that people will hear and remember and associate with the brand.  “Intel delivers” and “Intel inside” are marketing messages that imply all sorts of things — hopefully positive things to the people on the other end of that message.  The promotional group creates these messages from the content provided to them.  A friend of mine, Andy Arbuckle at Borders, is a poetry fan.  I asked him once to define poetry, and he told me that it had been defined (by others) as “words made memorable.”  That’s what you’re aiming for here.  Marketing poetry.  Branding messages made memorable.

The third step is delivering that message to a mass of people.  You can certainly do that through advertising, but it’s just as important that every press release, website page, product package, conference presentation, etc. — they ALL have to carry that message, some more overtly than others, but they HAVE to be CONSISTENT.  This third phase is also owned by Promotional Marketing.  They receive the intention — the content — and create a memorable message, a tag line, around that message and then find ways to get it to the absolute maximum number of key people.

In future posts, we’ll discuss the ways that message is actually carried to the world of customers and prospects, editors and analysts, friends and wives.

Here in Silicon Valley we have an interesting group of car washes.  Maybe it’s the same all over the country, I have no idea, but some of our car wash spots here have themes.  There’s one called the Delta Queen which is built to a very realistic approximation of an old paddlewheel riverboat.  The one in my neighborhood is a reconstruction of the buildings that occupied the corner 40 years ago when it was mainly orchards, accurate right down to the live chickens in the coop.  Fun stuff.  I’ve been going there on an occasional basis for years.

Originally you pulled in and a kid with a clipboard talked you through the choices… just a wash or do you want wax too… what about the interior… want us to make the tires look black again?  Pretty simple and took just a second.  But as they became more popular the range of services got more extensive… too extensive for a quick chat with clipboard Bob.  Then they added a touch of product marketing and “productized” the service.  They grouped the services into a couple of different lists… one was called “The Classic” and another, “The Works.”  All together these days there’s about five of these, so nowdays the conversation with Bob goes along the lines of “I’ll take the works.”  OK.  Done.

Now notice what the operation did NOT do.

1. They did not name the offerings with numbers.  No one had to pull up and say, “I’ll take 9047LPDTL,” for instance. No, that would be what a chip company would do.  Instead they came up with simple, easy to remember names… what a breakthrough!

2. They put up a big sign with the prices… “The Works… $19.95.”  This set people’s expectations right up front, since they could see the sign and vector themselves into the level of wash they felt matched what they felt like spending.  Simple.

I frequently talk to companies/clients that want to hide the price from people until they have pretty much convinced them to do the deal… at least that’s what they think.  In my experience, people recognize this and resent it.  You can save everyone sooooo much time by just getting the price out up front.  If people have a real need, they’re not going to run.  Putting the prices out in a visible way also settles the question of upgrades.  If one product costs $19.95 but the premium version only costs $21.95 and PEOPLE SEE THAT AT THE BEGINING, a much higher percentage will want the premium.  This is much easier than trying to upsell them later.

By grouping the services this way, you’re sending a subtle message to people that these are the things other customers tend to choose.  That’s comforting and saves lots of explanations.  Now Bob never refuses to sell you something.  But it’s a lot easier for the customer to say, “I want the Classic but skip the phony new car deoderant… it makes me sneeze all the way home.”  Bob has only one response to anything you say… “Got it.”  I sometimes tell people that a good way to approach marketing is to find out what’s easiest to sell, and then find ways to make it easier yet.

Actually I hate being exposed to sales people that try to pretend they’re not in the sales mode.  This happens frequently on the phone when someone starts the conversation with, “Are you having a good day?”  What the heck does that have to do with anything?  This is a stranger talking… does he think I’m fooled by this opening?  What an idiot.  When I’m in the sales mode the “opening” I tend to use the most is just a casual, “I’m here to sell you something.”  That usually shocks people into a listening mode for a minute, and it’s so novel because it happens to be the truth.  Sometimes when I’m in a particularly expansive mood, I’ll make it, “I’m here to sell you something.  I like to get that out right up front so there’s no confusion about what I’m doing here.”

This has never — not once — resulted in the other person ordering me off the premises.  About half the time it provokes a chuckle.  For me it has always resulted in the other person giving me their attention and listening, but I don’t offer this to you with any sort of guarantee… just the opinion that trying to hide the sales intention is terminally stupid.

A couple posts back, I mentioned that my wife had gotten us into watching America’s Cup sailboat racing on TV.  At the time this was on a channel/network  named “Outdoor Life Network” which was mostly about fishing and hunting, neither of which we do.  But their handling of a sport that is very hard to translate to TV was amazing.  Somehow they had hooked into a computer program that could show, in real time, the two boats, their courses, the placement of the buoys that marked the turns, the wind direction and speed, and conjure up these fascinating vector displays showing who was actually ahead despite appearances.  It was amazing.  Now my wife was hooked because every morning in her hotel in New Zealand, she’d watch the boats head out for that day’s race, and was now extending the experience via TV back in Silicon Valley.  For me, however, my first introduction was the TV coverage.

The first thing I noticed was that sailboat racing at this level is something of a hit or miss affair.  If the wind was too weak, the race was called off.  Same thing if it was too strong.  As a result, at least half of the days we turned the TV on to watch the race, it was called off.  Now at our house, these races came on right around knock off working time… right in that transition period my wife thinks of as a glass of good wine and I think of as a vodka martini  (Belvedere straight up with a twist, please).  As a result, after the race failed to appear on the screen, we normally didn’t bother to change channels… it kind of ran on in the background… one of those big-screen high def things talking to itself with no one even nearby.  That’s really how we discovered bull riding.  When the boat races were called off, Outdoor Life Network ran bull riding instead.

The first thing that caught our attention were the wrecks.  That’s what they’re called — wrecks.  A typical wreck happens when a bull throws the rider into what would be the second story and he comes down on his head.  Sometimes the bull then rakes him over a bit after he’s on the ground.  Our mouths dropped open.  Now we ride and show horses, and as anyone around horses knows, they buck.  But not like this.  These bulls are 2,000 lbs of muscle and when they throw the rider he sails… I wasn’t kidding about the second story.  I’ve never seen bucking like this.  The riders turned out to be young… 18 and up… an old timer was anyone in their 30’s, and I don’t remember seeing anyone past 40.  Most of them had broken so many bones they had lost track.  But they got back on and kept riding, frequently wearing casts.  We sat down and had another drink… stronger.  Couldn’t believe our eyes.

The events came on weekly and after three or four we had begun recognizing the kids… and a couple weeks after that we knew all the bulls too.  The deal was to ride the bull for 8 seconds… and then get scored on how much style you showed.  The interesting part was the bull got scored too.  My favorite bull was a small one called BlueBerry Wine who could toss anyone… the announcers would say, “… here comes so and so who’s going to ride BlueBerry Wine,” and we’d shake our heads and say, “He’s NOT going to ride BlueBerry Wine.”  And they never did.  Total score for any ride was the combination of rider and bull’s scores.  At the end of the year, a champion rider was declared, and so was a champion bull!  I couldn’t get over the punishment these kids were taking… and then I found out why.  They were riding for a million dollars.  These were basically all farm kids, half of them from Mexico and Brazil, but at the end of the year the champion got a check for a million dollars… not to mention all the little 10 and 20 thousand dollar checks along the way.  This was serious money!

PBR, Profession Bull Riders, was started in 1992 when 20 of these “kids” each put up $1,000 to start a professional bull riding tour.  Their goal was to become the NASCAR of the rodeo circuit.  I’m not a fan of NASCAR — my wife and I are Formula One addicts — but you have to admire the way NASCAR turned a bunch of unorganized little stock car events into a gigantic business.  Rodeos are a bit like that… the stock car events I mean.  PBR set out to turn it into a serious business by focusing on the single event that was the biggest, hardest, highest-jumping, most thrilling part of the rodeo — the bull riding.  They created a tour of events and worked out a point system that ultimately determined a champion.  Today, it’s over 100 events on four different tours, that over 16 million people watch or attend (and that was back in 2004).  Advertisers came… Super-8 Hotels (8 second rides… get it?)… Ford… all sorts of companies lined up to endorse riders and advertise.  People began to breed bulls just for the PBR circuit just like thoroughbred horses. All the major cities began to hold PBR events, and last year PBR began holding them in Mexico and Brazil too.  One reality TV show was based on PBR with the participants learning to ride bulls with the finale being a ride in one of the real events.

PBR became so popular that it changed the network… the original hunting and fishing network, Outdoor Life, changed its name to VS (Versus) to pick up on the contest between man and animal.  Las Vegas now hosts the championship — the final event that settles the million dollar question — and if you don’t have your tickets for Mandalay Bay six months in advance, forget it.  Oh, and those 20 kids that put up $1,000 each… when PBR was sold to a large company, they each reportedly received $4.7 million.

Now this is serious marketing.  At each step, PBR understood how to make the attraction even bigger… how to turn a weekend rodeo into a gigantic business… how to attract advertisers and endorsements… and how to make the thing work on TV.  They did something I always advise service companies to do… turn their service into a product.  Give it a name (Blueberry Wine is already taken), and put a price on it.  Every company regardless of the product or service should have a price list.  Potential customers are always reassured when they see a list of “products” with prices on them — it implies you sold a few before.  The real test is can you do a datasheet on it?  Think about it… could you do a datasheet for a bullriding event.  I haven’t seen it but I can pretty much guarantee PBR has done it… and they send them to all the potential advertisers.  Find a way to turn your “thing” into a product and put a price on it… then you can treat the special versions by just having price adders for the various features and addons.  PBR did that by providing a product to their cvonsumers — the people that came to the events and watched them on TV.  That product constisted of a consistent scoring system backed up with knowledgeable and colorful commentators, lots of instant replays, a button the rider could push (and pay a $500 fee) to get the judges to look again if he thought they had hit the 8-second buzzer early, and lots of quick interviews after the big rides and background stories on each of the riders.  That’s a complete product.  They had a second product they delivered to the advertisers… millions and millions of fans who tended to buy Ford trucks among other things.  The point is, these people understood how to take the enterprise out and ride it hard, always moving up to the next step when the time was right. Never seen it?  Give it a try, it’s addictive.

That year at Christmas, my wife gave me a little stuffed copy of BlueBerry Wine (did I mention PBR has merchandise?) and he still stands proudly in the wine bar along with the bust of Voltaire… great conversation piece.  And after watching a couple of seasons of bull riding, my own skills on horseback got better… well more relaxed anyway.  I’ll never forget how the 2-time champion Chris Shivers, finding himself on a less-than incredible bull, started selling to the judges.  Whipping his white stetson off and swatting the bull on the butt with it and then waving it over his head to the crowd as the bull jumped for the sky, Chris sold the ride.  It was like something out of the movies.  Now in my case, taking horses into the show ring to warm them up frequently starts with the horse bucking under you… they’re a bit nervous and that’s how they show it… nothing personal against you but let’s buck some.  That’s not my favorite thing.  It’s way down my list from Italian food, for instance.  But honestly, if you don’t let it stress you out and you stay focused, you won’t get dumped and it only lasts a few seconds.  But horses can not buck like those bulls on PBR… not even close.  Hard to take it that seriously after watching the pros ride those bulls.  So when, in the practice ring at my last show, my horse began to rodeo buck, I just let him do it… let him buck across the arena and as he got to the stands, pulled him over to the side and put him into a nice trot.  And as my eyes met the spectators sitting in those stands right in front of me, I said, “wahoo”… as in… big deal.  Jeeeez, if I had only had a serious hat.  WAAHOOOOOOO.

Think of this as part 2 of my last post… on using an ROI based value proposition in tough times.  OK, I admit it… I thought of this AFTER the last post.  Here’s another way to look at the situation.

You know the story about the bear and the two hikers? You probably do, but to be safe I’ll repeat it.  Two hikers in the woods encounter a bear who immediately gives chase to them.  After it becomes apparent that the bear is not to be dissuaded, one of the hikers stops and begins putting on his running shoes.  His buddy stops alongside and remarks, “what are you doing that for… neither of us can outrun that bear.”  And, tying up his running shoes, the first replies, “I don’t have to beat the bear… I just have to beat you!”

Selling stuff in normal times is like selling to that bear.  The bear already was in the buying mood… he was fantasizing about hiker steak.  The only question was which he going to catch.  Now change the situation.  You come home to your family and sit down to eat dinner.  Tom, the old tomcat, has just finished a big bowl of tunafish, so he’s going to leave you alone and not be a pest.  Then as one of the kids runs in from outside, the front door is flung open for a second… just long enough for Tom to shoot through and out.  You know from past experience that he’s going to be gone for a few days and as a result, your life is going to be living hell for awhile.

The kids run out after him, and Tom, sensing capture, elects to shoot up the neighbor’s tree.  You stand beneath it looking up while your wife pleads for you to do something, and your kids scream for you to do something.  Living hell.

Only one thing to do.  “Bring me the tunafish can,” you command.  But it doesn’t work.  For an hour you stand under the tree waving the can around hoping the fumes waft up into the tree to Tom.  But the problem is, Tom isn’t hungry.  He’s not buying… in this case cause he had just eaten, and from where he is the situation on the ground is looking very strange…even threatening.

Good times and bad times.  In good times, you can sell to bears just by beating your competiton.  There was no need to convince the bear he was hungry… hell, all the buy signals were in.  The only question was which “product” he would chose.  But in bad times, you can’t sell to cats by just claiming you have the best tunafish in town.  You have to find other motivators, and in fact, you have to reestablish their need.  That’s why the ROI pitch works… the product pays for itself in a short period of time making it essentially free and after that it’s saving the customer money every day.  In the case of Tom, tunafish doesn’t work, but I bet that lady cat he so obviously admires would do the trick.  Just wave her around under the tree and I bet Tom will buy… err, come down.

A few years ago my wife returned from a working trip to New Zeland and informed me that we had to turn the TV to one of those little niche satelite channels so she could watch her new love, America’s Cup Racing.  She got me hooked too.  The scenes of these incredible racing sailboats fighting for gains measured in inches was fascinating.  We began to follow the races and soon had picked favorites.  It all brought back a memory of a day many years ago when I walked into an acquaintence’s office who happened to be an avid racer himself.  He had a poster nicely framed of one of these boats, going all out and leaning at what looked like a life-threatening angle… it was all waves and wind and action and you could almost smell the salt air.  It was captioned… “Winning is not a matter of life and death… it’s more important than that.”

Tech companies in good times and bad times use what’s called the value proposition to explain their products… what does their product do for the customer?  What value does it bring?  Does it save time or money or bring in new revenue streams?  Exactly what does it do for the customer that is so compelling the customers will buy it?  This is sometimes explained to newbie marketing types as making the pitch in terms of customer benefits instead of features.  A chip may use 100mA less current, but that’s a feature… the benefit to the customer is that it’s cheaper to run because it uses less power and generates less heat. Customers buy benefits… you explain those benefits by pointing to the features, but you always start with the benefits.

This example is also a case of lazy thinking.  Uses less power than what???  Why it uses less power than our competitor of course… or less power than the last generation… or less power than a competing approach.  In reasonable times, this works, but we should do better.  You see there is another competitor in the room — one we frequently don’t acknowledge.  That competitor is named, “Do Nothing.”  When product marketing people — and it is always product marketing that formulates the value proposition — in terms of less power, they have made the assumption that the customer is driven to do something… ie, save costs by using smaller power supplies and smaller fans.  The reason this works is that in normal times, customers are always thinking in terms of the next generation of their product and how they can improve it.

But when times are tough, really tough, a lot of times that assumption is wrong.  The customer may have reluctantly decided to NOT bring out a new generation at this time.  Or if you’re selling internet routers, in the past customers were always interested in buying “up”… in increasing their internet capacity.  But when times are tough, their web traffic may be down and they don’t need to do anything right now.  In bad times, you need a stronger value proposition that does NOT start with the assumption the customer is going to buy something, and that all you have to do is beat the other guys.  In tough times, your value proposition has to begin with why they should do something now, and then move onto why your solution is the best.

These days, the best value propositions are ROI based.  “The payback on this unit is only 9 months… after that you’re getting a net savings.”  Even stronger, though I hate having to use it, “this unit requires fewer people to operate”… you get the idea.

Think about what’s going on at the customer.  Internally, no one is sending messages around saying, “cancel all projects… we’re going to layoff half our engineers.”  No, what happens is almost nothing.  The messages that are sent around are along the lines of, “we’re going through tough times and we all have to work harder,” or something to that effect.  When your sales person goes in to pitch your new widget, they don’t get turned down, they get delayed… no decisions are being made… no one knows if the project is going to go ahead because parts of it are still running (the parts that either don’t cost anything to finish or are too far committed to pull back)… the parts that actually commit the company to any serious expenditure somehow can’t get out of the approval cycle.  They’re not rejected, they’re just… um nothing.

That’s why value propositions that are expressed in terms of ROI and short payback get attention.  Hard to do? Sure.  Are all products suitable for this approach? Nope.  But believe me, these days, the better you get at approaching the value proposition this way, the more sales you’ll make.