App or No App?

Today’s world runs on mobile devices but whether or not your company should build a mobile app depends on a number of factors.  Two of the key questions are whether it makes sense for the business and whether people will actually use it.  If you don’t ask those two questions up-front and get real answers to those questions, you’re probably going to waste time and money.

A VC speaking to a group of technology entrepreneurs said 99 percent of downloaded apps are no longer used within the first 30 days.  60 days later, the same statistic holds true.  One percent of one percent are being used after 90 days.

Some companies have opted to build mobile versions of their websites instead.  Sometimes the mobile site is simply a step toward a larger mobile presence, sometimes management has concluded that the business case doesn’t justify investment in an app.

A lot of assumptions are made about apps that prove to be wrong:

• The app will be popular. (Did you test the idea first?  Is there a demonstrated rather than assumed need?)
• The app will drive a lot of revenue. (Will the ROI be worth the effort?  There are costs to develop and maintain the app and the marketplaces demand a revenue split.)
• The app will raise our visibility. (Will people be able to find it easily on the marketplace?)
• A lot of people will use the app. (What other options do they have?  Why would they choose yours? In what way will you provide a better experience?)
• The app isn’t great but we’ll fix it next time. (Will the ROI justify a “next time?”)

Just because you can build an app doesn’t mean you should.  Whether you should or not depends on the business case.  If the business case justifies an app, work with closely with customers to ensure that the app delivers value to them and to your company.

When Networking Goes Social

Every now and then social media experts have to remind their followers that the fundamentals matter:  Just because you can do something doesn’t mean you should do it.

An East coast professional recently decided to return to California.  To ease the transition, she decided to reach out to a fellow alumni who has a formidable LinkedIn network.  Apparently, the woman wanted to land a job at a particular Silicon Valley company and for whatever reason she resolved that her fellow alumni was going to get her the job.  Her LinkedIn message essentially said, “I want a job at Company X, you know someone there, I want you to introduce me.  P.S. How have you been over the past few years?”

“John,” the message recipient, chuckled and deleted the message.  For one thing, he didn’t particularly like the tone of the message.  Second, the P.S. was problematic.

In a past life, John spent over a decade working in the high tech field as a public relations executive which meant he had been paid to be a professional networker.  In that line of work he learned that networking depends on relationships and relationships require care and feeding.  Experience  taught him that 1) demanding favors is a bad idea; 2) asking for favors is more effective if you’ve done the person a favor first; and 3) asking for favors is more effective if you’ve developed some sort of rapport with the other person.  In this case, none of those factors were present.

He went back to work and weeks passed.  Then,  a second, more demanding message arrived.  He deleted it.  More weeks passed.  A third message arrived.  Deleted.  Apparently, he’d thought about responding to the first and second messages but then decided against it. They didn’t really know each other, she had impressed him in the past but not in a good way, and he had no idea how competent she was professionally.  Bottom line, he couldn’t recommend her with a clean conscience.

Another professional just discovered Facebook.  Like many people she’s taking a scattershot approach to it, sharing other people’s pet stuff, some political stuff, some mildly offensive comedy stuff, and some professional stuff.  She’s interacting with people here and there but all it takes is one misstep and unfriending happens.

One of her Facebook friends is a former colleague. This gentleman is connected to college buddies, high school friends, a growing list of customers, and a few people he met in passing. 

“Matt” changed jobs a few months ago and has been adding more customers as Facebook friends.  He was a regional sales manager at one company and is now a regional sales manager for a different company.  He posted a note about how happy he was at his new company and then “it” hit the fan.  The lady who is new to Facebook publicly commented that it was a travesty his new position didn’t come with a new and better title.  In the interest of damage control, Matt deleted his post (which hides her comment).  Then he unfriended her for exercising poor judgment.

While none of the above exemplifies the soundest judgment, they do serve as a reminder to think before acting.  Professional connections can be fragile things, particularly if they’re mishandled.

Data vs. Instinct

Data and the measurement of it is invading all aspects of business slowly but surely.  While departments such as finance and sales have always been numbers-driven, it has only been in the last decade that numbers have become important to people traditionally known to be guided more by instinct such as marketers and some business leaders.

Fortune 500 companies employ data scientists to wring the greatest amount of intelligence out of data.  Although more workers are being exposed to data (and large companies employ analysts) it turns out that many still do not understand the data they are receiving or know what do to with it.  While the average person will ask questions such as “How many widgets did we sell in June?” the data scientists are being used for out-of-the-box thinking – that is to figure out new ways data may be used and to discover the questions the company is not yet asking that it should be asking.

In 2012, I wrote a considerable amount for various publishers about the role of data and the obstacles to its successful use.  While there are a number of technical hurdles to overcome such as managing all the data, cleansing the data so it can be mined properly, and then applying computing power and algorithms to make sense of it all – not to mention presenting the data simply so that the average person can comprehend it – very real people issues are impeding the realization of data-driven cultures.

People who have been driven by instinct and particularly those who have become successful as a result of their instincts find it difficult to believe that a machine could capable of performing greater feats of magic than their own minds.  This is one obstacle.

Realizing the pushback, companies are doing all sorts of things with the goal of creating data-driven cultures.  Some are buying tools hoping that the purchase will catalyze a positive change.  Others are forcing certain roles to use data analytics in the course of their normal workdays (and they are monitoring workers’ use of such tools).  Some organizations are offering professional or financial incentives to those who innovate using data.  While the latter crowd is the smallest, more companies intend to use carrots and sticks in tandem this year in an effort to become more competitive.

Bottom line, instinct has not become extinct – yet anyway – because data analysis is far from perfect.  If it were perfect, there would be no need for the levels of investment that are taking place in enterprises and the solution providers who serve them.  However, the liberal use of instinct is rapidly falling out of fashion when it comes to making strategic business decisions.

Testing in Plain Sight

Web, online and direct print marketers have been testing campaigns for a long time. In the analog world, A/B tests are used to measure the effectiveness of one campaign versus another. In cyberspace, it’s fast and easy to test endless variations of headlines, graphic elements and colors (which is called “multivariate testing”). Usually, customers and prospects aren’t aware of the tests because they typically see only one version.

Lately, I’ve witnessed testing in plain site by two different retailers: Michael’s and SaveMart. For years, one of Michael’s main traffic drivers has been its 40% coupon which comes in the Sunday paper and has been available online. The discount has been so standard for years it was something customers could count on.

A former manager told me the main complaint he used to get was that the “40% off any single purchase coupon” is only good on non-sale merchandise.  That makes sense from a business perspective but customers would complain that since nearly everything is on sale at any given time, using the coupon is often harder than it looks. In Michael’s defense, the offer is a traffic builder, meaning that its main purpose is to get people into the store.

Lately, Michaels has changed its promotional offers. Sometimes, it still offers the 40% off coupon. Now, it occasionally offers 50% off coupons, 20% of a total purchase including sale merchandise, and other single-tier discounts. Michael’s has also been playing with stacked discounts (meaning that an item such as a certain brand of beads may be on sale for 30% or 50% off and then there is a coupon that may be specific to the brand that allows the shopper to receive an additional 20% or 10% off the sales price). The experiments are good for the retailer because they collectively yield better data, namely deeper insight into shoppers’ habits and behaviors whether they’re email subscribers, web site visitors, or weekend coupon clippers. The variations also benefit customers by making them think differently about their purchases. And, sometimes shoppers can get a better deal than they would have using the traditional 40% off coupon.  Generally speaking, it’s a win-win.

And now for a lose-lose example.

SaveMart has been experimenting with its online web presence in a big way. Specifically, it has been testing its user interface or UI, which has been a long, painful and sadly obvious process to users. Luckily, the chain provided a mechanism enabling visitors to revert back to the old presentation which actually worked. The new UI was abysmal at first and for quite some time. As with most grocery store chains they want you to enter your zip code to access the weekly offers. While the offers may vary by location, it is also a simple way of tracking where customers come from. No problem, except if a user enters a zip code you’d better take them to the landing page of weekly offers you promised. Instead, customers were forced into an endless loop of zip code requests. That particular problem has been fixed, but the overall experience hasn’t been great on the web and it’s been downright abysmal on tablets and especially smartphones until recently. Now the site is optimized for touch which means the experience sucks on the desktop.

Up the street is Safeway which built a killer iPhone app and has done a pretty good job with its website.

Somewhere in all of this testing should be usability – that is, how easy is it for customers and prospects to complete tasks. Michaels gets a B+ here because most people are bad at math, which actually works to Michael’s advantage especially when it comes to stacked discounts. Many people think 50% off plus an additional 10% off works out to a total of 60% off when the right answer is 55%. While the 5% is usually negligible to the customer and may even end up going undetected, a 5% difference adds up quickly for a retailer. Michaels isn’t doing anything underhanded, nor is Kohl’s or Macy’s which have been using stacked discounts for much longer.

SaveMart gets its F upgraded to a D because it solved one problem by creating another. To be competitive, it has to provide great experiences on the web, on tablets and on smartphones.

Bottom line, testing in plain sight isn’t necessarily a bad thing. It depends on how it’s implemented. If it’s a “win” for the customer, it’s more likely to be a win for your business.

Bad Marketing Includes Video

I just got an email from a company that exemplifies how bad branding can be made even worse with poor marketing decisions.  The company will remain nameless since its name is immaterial.  Its actions, however, are worth noting.

The company has a severe product branding problem:  No one understands what its product does, which the author of the email readily admits.  Its solution to the problem is worth mentioning because it exemplifies on several levels what not to do.

1.  If you think maybe you shouldn’t say something, don’t say it.

The emails begins, “I probably shouldn’t tell you this, but…”  If you think what you’re about to say might be a mistake, it probably is.  The lead-in also undermines the purpose of this campaign which is to build confidence and understanding.

2.  If you’re going to bash content-free marketing, provide content.

The email continues, “for years it’s been a challenge to tell the marketplace exactly what our [product] can do in an easy-to-understand, concise way that rises above the buzz words and catchy taglines so many vendors are using.”  I agree buzz words and taglines become monotonous when everyone adapts the same language but…read what follows.

“Because the truth is, [our product] is not like any other solution out there and is capable of so much more than the [competitive products] the market is used to.”  I still don’t know anything more about the product.  It is simply being presented as the best with no proof points.  Some people call that “hand waving.” I call it content-free marketing.

And now for the finale…

3. If it takes a 3 minute video to explain what should be said in a sentence, Heaven help you. 

Videos are great educational tools but few people are going to want to spend even 3 minutes watching a video for the sole <ahem> benefit of inferring an easy-to-understand positioning statement.  Whenever someone takes the time to view a video, in the back of their minds they’re asking, “What’s in it for me?”  And if the benefit they expect isn’t there, the dropoff rates and points will explain why.

Bottom Line

If an audience doesn’t understand a product, the better marketing strategy is to find a more concise way of explaining it.  If a product can’t be explained simply in an email would you sit through a 3-minute video hoping to infer what it does?  Neither would I.

Lessons Learned at Stanford

For the last few years, I have had the privilege of mentoring some Stanford and National University of Singapore students who are working on new venture projects.  Sometimes I just judge the project presentations at the end of the semester.  As you might imagine, the students are bright as well as full of ideas and dreams.  Sometimes in living and breathing a new venture concept, the obvious may be overlooked, however.

Do Your Homework.  It’s always a good idea to have a logical explanation of why you decided to take a new venture in a certain direction and why you did not take the venture in other directions.  People will ask.  When you’re talking about some aspect of the venture such as competition, your presentation should be able to withstand a five-minute Google search at a minimum.  If it can’t, you’ll learn this lesson the hard way.

Think About Your Product or Service in Context.  If the venture involves a 3D object or 3D imaging, you have to think in terms of all three planes (X, Y, and Z), for example.  The concept sounds simple but when you’re working on a concept day and night, it’s easy to become so myopic that you overlook an element that is absolutely vital to the success of the product or service.

Beware of Hockey Stick Revenue Projections.  Ideally, all ventures would have revenue growth patterns that look like hockey sticks but most don’t.  Entrepreneurs and the entrepreneurial team can clearly envision scenarios in which hockey stick revenues would result.  Losses will be minimal the first year, breakeven will happen in the first 18 – 24 months, after which revenue growth will be exponential.  Practically speaking, the pattern rarely occurs.  If you want to be credible, get some much-needed assistance from experts who understand revenue models and what drives them.  Realistic projections will help you attract funding.

But wait, you say.  What about Facebook, Twitter, and Pinterest?  Don’t confuse hockey stick user adoption with hockey stick revenue growth.  When you offer a free product especially – and there’s a lot of demand for it – it is possible to attract millions of users in a relatively short period.  Many entrepreneurs can tell you that millions of users do not necessarily translate to profitability.

Beware of Free Stuff.  If you want to get people hooked on your product or service, the “free drug” strategy works.  Offer people free drugs, get them hooked, and then ask for money later.  Sadly, it’s easier said than done.  Free stuff can help build a market for a product or service but don’t forget you’re going to need a monetization model that works.  Does a free trial for a limited time make sense or would it be better to offer a free version and a paid version?  Those are not the only options, but it pays to research and test the possibilities.

Does Anyone Really Need the Product or Service?  In the mobile device world there has been a debate for many years about which type of device is “better” – a general purpose device like an iPad or a purpose-specific device like a Kindle, Nook, or DVD player, for example.  Is it better to have a general-purpose device that does many things pretty well or a purpose-specific device that does a single job better than anything else?  While both types of devices co-exist in the market, there is a huge graveyard of Blockbusters That Might Have Been.  Finding out what sells, why other stuff didn’t sell, and why is always a good idea.

Hot Ideas Fizzle.  Entrepreneurs are full of ideas.  In fact, they usually have many more ideas than they actually pursue.  Not unlike “real life,” some of the students I encounter abandon their projects for whatever reason.  Perhaps it wasn’t viable after all, maybe they came up with a better idea, perhaps the future involves an entirely different career, maybe they didn’t get the funding they needed.  Regardless, we learn by doing.  The experience gained in one venture usually proves valuable in another.

While the concepts here barely scratch the surface of what entrepreneurs face, they serve as reminders that even brilliant people occasionally overlook the obvious.

Eight Ways to Make Better Quality Videos

Now that bandwidth, storage, and cameras are cheap, everyone is making videos.  Of course, not everyone is turning out the same quality videos.

If you’re using video for marketing purposes, you should care about the quality.  Your budget may not allow you to hire teams that also happen to work for popular TV shows, but there are a few simple things you can do to improve a viewer’s experience that cost almost nothing.

1.  Pay attention to sound.  Sound matters more than most people think.  As a marketer, it’s easy to get caught up in the visuals, but if the sound is poor, the overall video quality is poor.  Clear sound is necessary for a great experience.  If the sound is clear, the audience will be able to pay better attention to the message and they will be less likely to drop off prematurely.  To get good quality audio regardless of what kind of camera you’re using, plug in a microphone that minimizes background noise.

2.  Pay attention to lighting.  Professionals understand the need for good lighting.  While it will make sense to invest in lights if you’re going to be producing a fair amount of video, you can also improve the lighting quality by doing something as simple as turning the camera away from the sun.  Pay attention to shadows and the clarity of the image, and adjust the lighting as necessary.

3.  Tell a story.  The best videos have a beginning, a middle, and an end.  A good video tells a story that’s free of unnecessary distractions.  While it may be tempting to throw in various shots, titles, etc., make sure the elements used help tell the story, rather than detract from the story.  How will you know this?  Preview the video before you produce it.  Show it to other people – friends, family, colleagues.  Listen to what your mind and other people are telling you.

4.  Open your eyes.  Professional photographers and videographers see things the average person does not see.  Pay close attention to what is in the background and foreground of a shot.  Many beautiful landscapes have been compromised by telephone poles, for example.  In office shots, people forget what’s sitting on desks, tables, the floor, etc.  Pay attention to everything that is in front of, behind of, above, below, or to the side of what you’re shooting and omit it or find a way to minimize it.

5.  Shoot more video than you need.  Professional videographers often do several “takes.”  For one thing, perfection rarely happens in a single take – ask any movie producer.  Quite often bits of different takes are combined to create the highest quality finished product.  You may also want to shoot “b-roll” to exemplify what the video is trying to explain.  For example, if the video is about the merits of a new manufacturing technique, the b-roll might demonstrate the manufacturing technique and/or the benefits of the manufacturing technique.

6.  Measure and learn from your mistakes.  Digital video can be analyzed for effectiveness.  Quite often, people equate success with the number of views, which is only one metric.  Another very important metric is length of view.  By monitoring view length, you can identify drop-off points – the point at which people become bored, frustrated, etc.

7.  If you’re going to do a group project, have a vision, a plan, and standards.  I was recently invited to participate in a documentary that will feature the work of many artists.  Traditionally, such a project would have been produced by a professional production company who travels to the artist’s studios or museums to shoot the work.  Inherent in that process is having a vision and a plan.  If you are going to have people contribute video which you will consolidate, you need a vision, a plan, and standards all of which are clearly communicated to the contributors.  The problem with contributory projects is quality control.  Some people will use a single lens reflex (SLR) camera, others will use smartphones, almost no one (or no one) will hire a professional videographer.  Some will use tripods, others won’t.  In the absence of standards anything goes – length, content, the appearance of models, tone, style, you name it.

8.  Remember the audience.  When producing a video it’s really easy to get so wrapped up in the concept and execution that the needs and desires of the audience get overlooked completely.  Is your audience tween girls?  Biker dudes over 50?  Wealthy couples on holiday?  The nuances will matter because they will influence the theme, look, feel, tone, style, and content.  And, if you really want to do a great job, don’t assume you know what they want, do your homework.

Producing great video takes practice but you can also learn a lot by observing.  Really well-made videos (including those done by professionals) can teach you how sound, lighting, titles, b-roll, music, transitions, and storytelling can be used to create effective and engaging experiences.

Listening Boosts Sales

I recently interviewed a publisher who spends 90 percent of her time listening to advertisers instead of talking at them.  The article I was writing explained how publishers can more effectively sell product and service bundles to their customers.

The typical way to structure a bundle is this:  Pick a few products and/or services and offer them for one low turnkey price or an across-the-board discount so it looks like a good deal.  The theory behind bundles is that they increase average order value or AOV.

If you’ve ever tried to sell pre-packaged bundles, you probably learned quickly that most customers liked some of what was included in the bundle but not all of it.   As a result, you likely spent too much time overcoming  objections and negotiating requests for modifications when it may have made more sense to spend more time listening and less time talking.

Some sales professionals talk more and listen less because they believe it is a more effective way to control the conversation.  Telemarketers are a good example of this as are countless other sales professionals who quickly tell a prospect what she needs based on a script or sales incentives rather than a conversation.

Consultative sales is all about information and the wise application of it.  What are the prospect’s preferences?  What are her biases?  Why does she believe so strongly that this works but that doesn’t?  Knowing these sorts of details can help minimize objections and even increase sales.

When I worked for the event management arm of a large publishing company it was my job to negotiate strategic partner and sponsor relationships with organizations that could help extend the reach and impact of our events.  Some of the contracts were simple, straightforward, and involved a single entity.  Quite often, these were industry-standard, no-frills agreements, usually negotiated with small companies that lacked the resources to do anything  fancy.  Other contracts involved large companies with many operating units.  Ususally a subset of the operating units were included in the negotiation with the parent company and when you’re working at that level, biases become obvious in a hurry.

It turned out that in our case, their biases worked to our advantage.  Since some of our promotional opportunities were physically limited by space, it helped that one company preferred show floor visibility, another preferred entryway visibility, and another preferred outdoor visibility, for example.  The marketing directors were happy because they weren’t forced to accept products and services they didn’t want, which helped build trust that really paid off in the long run.  Last, but certainly not least, we were able to create new promotional products that added to the dollar value of the overall program.

Hard-selling can work, but if you’re livelihood depends on building and maintaining long-term relationships, consider listening more and talking less.  Listening can give you valuable insight into what will sell, what won’t sell, what may sell and why.  Moreover, listening builds trust which usually leads to higher value sales down the road.

There’s an App for That

With the explosion of mobile apps has been an explosion of mobile app stores.  Along with the popular iStore, software developers are being wooed to develop apps for various devices and platforms from companies ranging from silicon chip providers to telecom service providers.   In fact, there are many more “opportunities” than are worth exploiting.

On both sides of the spectrum are false expectations of success.   Just because an app is created does not mean its creator will become rich and famous.  Similarly, just because an app store has been created does not mean the masses will flock to it.

There are a number of things that feed into the popularity of apps.  First, the platform has to be desirable. While there are huge markets for users of iOS and Android devices, the same cannot be said about Meego devices.

Apps must work well and look good, whether they’re games or business applications and they need to address an actual user requirment or desire.  Apps need to be marketed well by the developer, discoverable in the app store, and publicly advocated by their users.  Pricing and many other factors also come into play.

Two years ago at a Plug and Play Technology Center event targeted at venture capitalists, I heard a sobering statistic:  Of the apps developed for the Apple iStore, 99 percent are no longer used after the first 30 days and within three months, 99 percent of the one percent are not used.  So much for easy fame and fortune.

Apply the one-percent-of-one-percent statistics to the app stores that have little or no traction and the numbers look even worse.  Even when an app store is robust, there is no guarantee of success.

At the AnDevCon conference yesterday, Don Kellogg, director of Telecom Research and Insight at Nielsen said the average user of an Android smartphone is engaged with his or her handset for an average of one hour, 25 minutes, 14 seconds per day.  For simplicity, we’ll call the average user “Dave”.

This is how Dave spends his time, on average, during a one-week period:

• 40%  Facebook
• 28% games
• 12% Internet
• 9% messaging
• 7% pre-loaded apps
• 3% phone (voice calls)
• 1% [e]mail
• 1% third-party apps

Notice the third-party app statistic.  Again, the number one comes up.  But wait!  There’s more…

Analytics firm Canalys estimated that 300 million smartphones shipped in 2010, worldwide.  ABI Research stated while Android market share outpaces iOS 44% to 31%, Apple app downloads beat Android 2:1.  The firm also estimates global app downloads will grow to 29 billion by the end of 2011, compared to only 9 billion in 2010, fueled by the worldwide adoption of smartphones which is expected to grow 46% in 2011.

Nielsen also stated that Apple app downloads beat Android 2:1 and that Apple users are more willing to pay for their apps.  For every two free apps, an iStore customer will pay for one.  By comparison, Android Market and Blackberry App World customers download 3.5 free apps for everyone they buy.

It turns out free can be a great strategy depending on what you’re doing.  If you have a premium product with rich functionality, offering a free “lite” version can be an effective path to upgrades so long as the free product is good enough for users to want more (not crippleware).  Free has also proven to be a good strategy for publishers and brands who want to interact with customers through a new channel.  (However, getting customers to pay for a product that was once free is difficult unless the paid version offers more.)

Bottom line, apps are hot and they’re about to get hotter with the proliferation of tablets, smart phones, and wearable devices such as those from WIMM, but only a small percentage will make it to Killer App status.

Technologists Save Us From Ourselves

Thank God for software developers and IT gurus. Without them, life and business would be more chaotic than it already is. You see, the rest of us need saving, well in advance of our indiscretions. Try as they may to keep us from downloading software, altering settings, or setting up websites ad nauseum we still find all new ways to make their lives miserable. Of course, their lives would be a lot less miserable if we’d learn how to read things like policies, user manuals, and self-help forums.

Sadly, the technical good guys bear the burdens of our sins. While we whine and bang our fists on the desks hoping our problem will be fixed exactly one picosecond after we discover it, they quietly push their actual thoughts aside long enough to patiently explain why it is or is not possible for us to instantly  return to the state of nirvana we seek. If it is possible to get us back to The Point Before Everything Went Wrong, we should be elated, patient, and grateful but instead we tend to show our true colors the moment we utter, “So, how long will this take?”

Increasingly, I, for one, appreciate human help, especially as it is becoming a rare commodity.  Increasingly, companies are trying to reduce customer and technical support costs through videos, webinars, podcasts, and self-help forums.  The videos are great if they’re well made and address the specific issue you face; however, like webinars and podcasts they require an investment in time before their actual value can be assessed. Self-help forums may help but their quality is very inconsistent.  Some are easy to navigate and well populated with good content.  Others appear to have been designed by chaoticians.

Application-specific help also varies in its effectiveness. Most systems allow you to search for terms or step through an index. However, some systems don’t anticipate synonyms, meaning they may recognize “trash” but not “delete” or vice versa. If you know their limitations going in, you may have a better chance of finding what you seek.

Then there are the IT guys.  They know the answers to our questions better than we know how to ask the question in the first place.  Most self-help systems have no such capability.  They generally anticipate a finite set of questions worded in a particular way.

So, when you have access to human help, be gracious.  After all, the IT guys are people too.