Product vs. Marketing

Fred Wilson and Jim Keenan, two bloggers that I admire, had a couple of interesting blog posts over the last few weeks that have got me thinking. Fred’s post was titled Marketing and the Bubble and was a follow up to his controversial Marketing post.  In Marketing and the Bubble he uses the really interesting graph below (submitted by a commenter) to illustrate how in the last few years the pendulum of focus for startups has shifted towards product and away from marketing (the focus of the last bubble.)  Fred says:

 “…I am certain that experience has caused me and my partners to view marketing oriented startups with a fair bit of caution.”  

Jim’s post is titled Product Surpasses Sales, the key line is:

“The Internet has shifted the balance of power from sales to product.  They’ve always worked together, but it has been sales leading the way.  Things have changed.  With the ubiquity of information, it’s the product that now leads sales.  A good, strong, innovative product is far more important today, than the best sales team in the world.”

Rather than taking a side in the debate over product versus marketing, I’d like to make two points that I think should be kept in mind:

1. How much you prioritize marketing investment depends on your lifecycle stage, industry, product, customer base and the current market.  An early-stage biotechnology startup trying to develop a vaccine for bacterial infections likely needs to focus mostly on product.  A startup distribution company that resells telecommunications equipment to small businesses probably needs to prioritize their marketing.
2. Regardless of the above, I believe that your best sales & marketing (externally facing) people should be doing two things: a.) supporting your product and product team by interacting with the market and early adopters, generating intelligence and identifying the products that your customers want but don’t yet know they want and b.) influencing customers and potential customers by telling stories that speed up the diffusion of your most innovative and next generation products into the market.  If you find that your product is so amazing that it gets ahead of your marketing people, it doesn’t mean that marketing isn’t a priority, it just means you need to get those people focused on the harder stuff -- the stuff that your product isn’t doing yet.

Upselling

I've spent a lot of time over the last couple of years trying to find ways to generate more revenue from existing clients; mostly by building and marketing new products that leverage our base product to solve top-of-mind client problems. This is a smart way to grow your business because you're marketing to an audience that already knows, trusts and likes you, your product and your company. In most cases, this puts you at a huge advantage over competition that doesn't have an existing relationship.

I've learned a few valuable lessons during this time about getting more from your current customers.

1. Clients have a strong perception of who you are and what your capabilities are. They actually pre-judge you more than they do a new provider. It can be really hard to get out of this box. The best ways that I've found to deal with this are:
   • Be super honest and upfront about what your limitations are with respect to added offerings. If you talk too big you'll lose trust.
   • Your clients know that you can do something well; if they didn't, they wouldn't be working with you. Clearly identify that thing and find a way to make this capability a part of what you're upselling. But make the story simple and make it make sense to the group that you're working with; i.e. a lab supply company can sell its logistics expertise to help clients manage lab inventory but it shouldn't start selling office supplies to the office manager.
2. Don't be afraid to test your pitch with some smaller clients; your first several passes will always be off the mark. But balance this with not taking the feedback from a couple of clients too seriously. If you think you're solving a real problem then stay on course for a while.
3. You have to be ultra sensitive of not appearing to "salesy." You've got a certain level of trust and a willingness to listen built up among existing clients. Don't damage that, it'll be hard to get back and it's not worth losing.
4. Because most deals can get done with a statement of work or an amendment to an existing contract, the sales cycles are much shorter than those with new clients. Leverage this to keep deals really simple and moving fast. In some cases you can simply invoice the added product or service without a signature which can avoid the involvement of busy lawyers and senior managers.

B2B Citizens

Once again the great Seth Godin and friends are changing the language of marketers.  I love when this happens so I hope it takes hold.

He's recommending that we stop referring to potential buyers as prospects and targets; rather we should refer to them as "citizens".  See the post here. 

While I love this word and agree with his motivation, doesn't this seem a bit B2C driven?  That is, I'm not sure we should refer to potential B2B buyers as citizens. 

What's the difference?  When I think of a consumer in this context, I think of a person that doesn't need me, that has choices, that has power.  When I think of a business in this context, there's less power.  That is, while a business may not need me, they do need solutions to big problems to keep their business running.  Citizen is a great word because there's this sense that they're just standing around and might never need to do anything other than eat and sleep.  I have to make something that's great to get them to act. 

Businesses aren't just standing around, they need to act to survive; they (in many cases) need me more than the consumer.

I think there's a difference.  Thoughts?