The 5 C’s of Clairvoyant Companies

No one is psychic at TechCoastAngels.  Yet, we believe there are keys to success for start-ups.  For the past couple of weeks, myself and 6 other angel investors from TechCoastAngels of Orange County have screened more than 120 entrepreneurs in preparation for the  “finals” of our fast pitch competition at TCA’s upcoming Celebration of Entrepreneurship event to be held on March 10.  We have listened to these entrepreneurs’ 60 second pitches which would be provoking enough to take a meeting with them and listen to their pitch decks. In my last blog, I shared the early pitch decks of 7 Unicorns courtesy of CB Insights.

For this blog, I want to put it all together and share what I see are the common themes that came out of the pitches and the pitch decks.  Now, while we have been focusing on start-ups, the principles enumerated in my 5 C’s of Clairvoyant Companies are equally applicable to on-going companies, large and small.

1.       Conveying the story.   The first “C” relates to conveying a story of what problem(s) the company is solving and telling a succinct story to entice the listener to ask for more information.   If it is a start-up, the entrepreneur has to put the listener in the shoes of the person having the problem and convey the solutions.  In the pitch deck (or business plan), the CEO (or presenter) provides the details on how he or she will execute on the plan and drive financial results.  Conveying the story clearly applies to ongoing companies as well, particularly if the company wants to attract new customers and brand itself in the market as something special.  Just think about the stories being conveyed by Nike and Under Armour or your favorite consumer or business product.

2.       Customer Clarity.   The second “C” relates to the target customers.  Who is the ideal customer?  Can you describe them and how do you find them?   If you think about Airbnb, the customers are both the person wanting to rent his property for a short period of time, to the other customer, a person wanting to rent a room or house.   The marketing and business plan should clearly indicate the problem the customer is facing and the solution offered.  Additionally, the company needs to present a cogent case for their marketing tactics to drive awareness, adoption and use.  Without clarity on the customer and how to find them and motivate them to action, financial success will not be achieved.

3.       Competencies of the Company.   This third “C” relates to the existing or needed competencies within the organization that can drive the financial results.  It also relates to the intellectual property (IP) that is required to support the business or product.    How do you acquire and sustain the competencies that are needed for success?  Do you hire software developers on your team to build the product or can you outsource that skill?   What is critical based on your strategy and your competition?

For an on-going company, this is equally as critical.   A competitive analysis and environmental scan may lead to the conclusion that skill sets that were once required are no longer required and new skills must be added.  That may lead the company to a training program, a partnership, or replacement of existing resources with new ones.

4.       Competitive Advantage and Moat.   This fourth “C” is pretty evident.  No company operates in a vacuum.  Both startups and on-going companies need to be aware of the existing and potential competition that exists.   A competitor in the future may not be apparent  today but may have the competencies, technology, leadership and resources to compete in a new and growing market.   Five years ago would GM or Lexus have considered that Tesla would be a competitor or that Google would enter the realm of cars with their automated car program?  A few short years ago, who would have thought that Red would be the camera of choice and used in three of the Academy Award nominees for best film?

With technology and apps changing so quickly, competition can change just as fast.  Technology is the new enabler helping young entrepreneurs compete with established companies and with each other.  Recall what Andy Grove, former Chairman of Intel said:  Only the Paranoid Survive.  Whether you are a startup or an established company, be paranoid and keep your eyes open.

5.       CEO vision and passion.    We at TechCoastAngels say that we have to like the horse (the business concept) but must LOVE the CEO (the jockey and her team.)  As we screened the candidates for our upcoming event, we looked for a CEO with passion and vision and who can relate to us, the investor.  We wanted to find someone who had a history of success, was decisive, yet approachable and coachable.   We believe we found those characteristics in each of the 12 finalists.

Think back to the great leaders of on-going businesses or coaches and CEOS of sports teams.   Who is your model for a CEO with vision and passion?  I personally thought Lee Iacocca was great when he resurrected Chrysler.  Jack Welch turned GE into a world class company with his vision to be #1 or #2 in his markets.   Steve Jobs showed the world a new vision for technology. And Alan Mullaly took Ford after the great recession to a new level of respect and performance.

What else did these CEO’s have in common?  They had the ability to execute a plan.  They were also the keys to establishing a culture in a company that was hard to replicate.  In many ways, they became the icon for their brands.  And they were highly regarded by their employees and feared by their competition.   In a startup it is perhaps hard to discern whether the CEO can execute, yet we can judge their past successes with other companies and who they select as operational execs, advisory board members, and board of directors.

As we near our Celebration of Entrepreneurship, I trust that these blogs and the ideas herein will help executives of start-ups be successful and also be used by executives of on-going companies to help them guide their companies to business success.  I would be glad to continue the dialog on what makes a successful company.  Feel free to reach me at dfriedman@clevelpartners.net and if you enjoyed this blog please like it, repost, and retweet it.

StreetSavvy Marketing Predictions for 2016

It’s that time again when just about everyone has predictions for the New Year. In November, Forbes contributor Kimberly Whitler posted predictions from the C-suite.   Adam Davidi, from the Guardian, posted predictions on branding based on conversations with “experts.”   I am sure we will see predictions from Forrester, Gartner and others as well.

As a Managing Director at C-Level Partners, I don’t want us to be left out.  My colleague, Vince Ferraro, and I have been C-level executives in marketing and general management for many years. We now consult with companies on marketing and their go-to-market strategies.   We decided to look at “Big M” marketing, relating to predictions for how companies and brands go to market and how they interact with customers.  So without fanfare and any biased perspective, we share these predictions for Marketing for 2016.

Let me be candid.  While most of these are predictions based on our work with clients, with start-ups and in talking with our marketing colleagues, there are also some “aspirational trends” that we hope come true for the profession as well as we believe they are important for marketing professionals and the businesses they manage.  Some of these trends overlap and leverage each other.   To us, that will represent the power of good marketing.  In no particular order, our top sweet 16 are:

1. Cognitive Commerce has begun. Marketers will use information on customers from their databases, the internet, and other sources to build stronger relationships, build predictive algorithms, personalize content, and deliver products and services to meet their specific needs.
2. The distinction between offline and online will disappear as real time analytics will unite both camps. Marketers will consider all (omni) marketing channels to optimize their marketing programs based on cost, effectiveness, ROI and the satisfaction quotient from building relationships with customers.
3. Branding will be from the inside out. Companies will not push the brand but the brand will be built on trust, engagement, referrals, authentic dialog, and transparency.
4. Digital Marketing will cease to exist as a standalone part of marketing. There isn’t a need for separation anymore. World class marketers will know how to market in a digital world. Traditional and online marketing not only will coexist, but one will leverage the other and work better together.
5. Advances in video broadcasting and continued growth in mobile devices will change TV marketing forever. Marketers will use new technologies to enable a more immersive experience and TV and other broadcast video usage will expand on all screens – laptops, desktops, tablets, smartphones, HDTVs and even screens in cars,( i.e. telematics).
6. Content will be created specifically with video channels in mind. Further, there will continue to be a migration to mobile video which will become de rigor on a company’s website, in blogs, in training, and on Youtube.  Youtube channels for marketers will continue to expand.  In addition, the use of video podcasting and live streaming are also in a growth mode.  The world is clearly digital and going video and marketers will take advantage of that.
7. Personalization will grow as its ROI is measured and as customers come to expect to be treated as individuals. We, at C-Level Partners, have written that there are now 7Ps of marketing and personalization is one of them.  Technology and marketing automation will enable this to happen.  This personalization will improve company branding and the ability to build stronger relationships with customers.
8. Marketers will get back to basics. Solid, well planned marketing will trump the sexy marketing in the past.  The CMO and business leaders will focus on marketing as a strategic investment to generate profitable revenue.
9. The human touch will return to marketing. How many of you love to listen to an automated customer service system saying that “your call is important to us…”  That’s bull!  Companies will realize that you are important and will show it by having more touch than tech or at least do a better job of integrating the two.  Being human will also apply to helping customers understand the value of the company’s products and determining what motivates buying behavior.  This is like getting back to the future… and I love it.
10. Employee experience (EX) will be as important as customer experience (CX). Engaged employees are critical because at the front line – in retail, sales and customer service- they ARE the brand, or at least a fair representation of it.   Engaged employees also feel part of the company, behave like owners, and will be promoters of the company’s products and services.  According to our anecdotal evidence, only about 30% are engaged today.  Think Zappos, Starbucks, 1and1, and Jet for companies who provide both good EX and CX.
11. Marketing and Data Science will be the new dynamic duo. This will be key to understanding the customer persona from many angles – demographics, psychographics, sentiments, and buying behavior.  Vince and I, both being engineers, can relate and understand this dynamic.  We expect to see the CIO and CMO becoming BFF’s.
12. As a corollary to #11, data will be the new currency for the younger generation. Data will enable the ability to personalize the marketing message and make that message more meaningful and differentiated for a particular customer. But it doesn’t only apply to the younger generation; big data will be used to help understand buying behavior of all customers and couple that information with the dynamics of profitable revenue growth for the corporation.   The new marketer will be, must be, a datahead or recruit the right people in his/her organization who have the skills to analyze the myriad of data available from business and marketing systems.
13. Marketers will provide more original insights into business. Marketers will not be mere curators of data and content.  The key word is  By having more insight into business, the CMO will be able to justify his/her seat at the executive table.  (This is a belief and expectation!)
14. Customer success will be determined by a combination of satisfaction, retention, and referral. We have always believed that the combination of the three components will yield the most loyal customers.   In conjunction with this, customers themselves, through social media, will become the company’s best sales people. Technology to help build customer engagement will continue to evolve and become more sophisticated.
15. Marketing and selling will be in an omni-channel world. Marketing execs will understand the buying persona of their customers and will use math and analytics to optimize the sales and distribution channels.  But the key here is that it will not be one channel vs. the other.  The marketer will blend online and offline, retail and wholesale, third party distribution and direct to ensure the buying experience matches the customer and to improve the profitability of the company.
16. Chief Marketing Officers will evolve to become strategic businesspeople first and “marketing” executives second. This is our wish and expectation; therefore, we took the liberty to include it as one of our predictions.  The CMO will be the linking pin from the outside world of the customer to the inside world of production, manufacturing and operations.  He/she will have a unique view on building and capturing valued.  In the past, we have not seen this from most of our traditional marketing colleagues as many have been focused on one area e.g. advertising, digital, brand, and product.  The new marketing executive will be a generalist, a businessperson with a focus on top and bottom line growth, steeped in data analytics, change management, and growth levers, coupled with creative and innovative bent.  We may be wrong about this one for 2016, but we believe it will eventually take root over time.

We would be interested in hearing your thoughts on your sweet 16 predictions for 2016.  Let’s keep the dialog going at www.clevelpartners.net.   And feel free to contact me at dfriedman@clevelpartners.net or Vince at vferraro@clevelpartners.net for a complimentary discussion on how we can help you achieve value creation and profitable revenue growth.

The New 7Ps of Marketing: Disregard at Your Own Risk!

I was reading an article in the recent Forbes online CMO Network by Kimberly Whitler entitled: What are the top predictions for marketers heading into 2016?   Ms. Whitler surveyed some experts, including CEOs, Presidents/GMs, CMOs, authors and executive recruiters.  In a different but recent article, Forbes CMO also ranked the top 50 CMOs.  To me, I would have rather heard their predictions.

I always enjoy reading “predictions” because they keep me on my toes- maybe I missed something- and makes me challenge what I believe are the upcoming trends.  As a businessman and marketer I certainly don’t want to be caught short.

I found the article very interesting and certain worthy of consideration.  I feel after reading the comments that each person is looking at the “elephant” from their unique vantage point.  And frankly, I am not sure they are predictions or wishful thinking based on the viewpoints of the interviewee. Nevertheless, they are certainly food for thought.

From a holistic view, my prediction – or wishful thinking – is that marketers need to start with the customer and realize that marketing has become multi-channel and multi-dimensional.   The smart CMO must orchestrate the new marketing mix. That means they need to simplify messages sent to consumers through whatever channel is relevant to them i.e. digital, small screen, large screen, Point-of-Purchase.  And they need to determine which is most relevant for the target personas.   Moreover, the smart marketer should consider all the tools in his/her toolbox and select those tools that are most effective for getting the right message and INTERACTION with the customer.

When I put this together, i find that the old model of 4P’s is antiquated.  I believe the new prediction is that good CMOs are now considering 7Ps in a holistic view: the original 4 (product including product/service development, price, promotion, placement (digital or traditional), and the new three consisting of process (including customer engagement, referral and loyalty), people as brand messengers at point of purchase or via customer care, and personalization (through technology).

The “traditional” 4Ps of marketing are well known.    In the day, marketing was about creating demand, and to a large degree it still is today.  But the focus was on selling a product to meet a need.   In general, promotion was based on advertising push.  The marketer’s mantra was to shout out the virtues of the product by mass advertising. To some who read the history books, the “soaps” on TV were called that because the consumer goods manufacturers such as Tide, All, and Fab were sponsoring and advertising on the TV shows aimed at the housewives and other stay at home folks.

Pricing was simple.  Manufacturer’s set price and used a price point philosophy of good, better, best. Placement represented where the consumer could buy the product i.e. at the neighborhood store or a mass retailer or even door-to-door sales and home delivery.

Because of technology such as the internet, and the movement away from a manufacturing to a service company, even the original 4 P’s have changed.

FROM                             TO

Product         –>       Solution

Promotion    –>       Information

Price               –>       Value

Place               –>       Access

 

Consumers and businesses want solutions to their problems and want to understand how the product/service will perform.  Due to the internet, both as catalogs of information and online reviews that are omnipresent through a myriad of sources, information has replaced pure promotion.   Certainly consumers and businesses want to find the right product at the right price, yet price by itself has been replaced by value with the value add sometimes being generated by service agreements and extended warranties.  And primarily due to the internet, place (distribution) has increased to a multi-channel access.  Think about the changes from the 1990s when e-commerce was first getting started to today.  Consumers and businesses now have electronic exchanges and other online venues from which to buy goods and services.   And now, coming full circle, we see Amazon opened its first brick and mortar store in Seattle.

Now let’s add the new three elements to the marketing mix.  First is the element of PEOPLE.    When I was head of marketing at US Cellular, we changed our brand and positioned our company using the tag line “the way people talked around here.”   Why did we do that?  In part, we recognized from our research in the late 90s and early 2000s that customers in our market wanted something more than what other cellcos offered.  We were not going to be the most technologically advanced (although our network and engineering were superb), nor were we going to cover the most customers in the country.  What our customers wanted was a relationship with our company, represented by our front line sales and customer service people.  They wanted a company they could trust.  At that point, we realized that people were the brand messengers and in our touchpoint marketing system, represented a way to affect the relationship and alter the buying habits of our consumers.  And it worked.  Our retention rate i.e. loyalty, was the best in the in the business.

The second new element is PROCESS. Many companies loathe the word process because they feel it is bureaucratic.  To me, process is the mechanism for repeatability. We want processes to help the customer in building its relationship with the company and also empower the employees to do their job to satisfy the customer.  Clearly, it is a tricky balance!   The processes today – mostly enabled by technology- relate to tools that help the company serve the customer.    There is a dizzying array of tools that the marketer has to understand and use.  See Marketing Technology Landscape by Scott Brinker or some of the Lumascapes by Luma Partners.  Some of these tools include ways to mass customize a product or service to the customer needs.  Witness the new companies entering the market to build relationships with consumers and business buyers.  There are processes enabled by digital and web technologies that enable social engagement and the marketers use these new tools to build and maintain relationships with their customers.   This improves value through new services and interactive engagement in the eyes of the buyer.

The final area is PERSONALIZATION. Several of the interviewees pointed out that understanding the customers’ persona is critical to segmentation.  Once you understand who they are, the company has to satisfy their unique requirements.  I have always been a fan of mass customization (read Joe Pines original work) or macro-niching as I use to call it 5 years before mass customization became vogue.   Personalization is easy today with technology.  You can see it when you buy a car.  Go into a BMW or Jaguar dealer in their store or online and the system will build the car for you.  Buy a house from Toll Brothers and you get a platform and options to tailor the house to your needs.   Go on the web and find a case for your smart phone and you can easily customize it with your school logo and colors.   Consumers want to feel special and that ensures a solid on-going relationship with their customers.

Marketing has changed and will continue to evolve over the next several years.  Clearly there will be a natural bonding between the CIO and CMO as marketing technology has become more important in defining the marketing mix.  While Ms. Whitler did not ask my prediction for 2016, I will share it with my readers.    I predict that marketing will be more about the customer and the great marketer will find the right combination of the 7 elements to build and sustain relationships with that customer.  At least I hope so.

I would be glad to continue the dialog or share additional thought.  Feel free to visit us on our web at www.clevelpartners.net or contact me at dfriedman@clevelpartnes.net.