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Einstein Was Onto Something

April 7, 2009 ark-com

This is the tale of two companies with a very similar lead-generation problem. Both had similar issues holding them back and both applied a fair amount of resources to find a solution. They were able to do this because of previous success in markets that have recently been described as problematic. But throughout all this, only one of them achieved success. The reason why one did whereas the other didn’t is one I see played out more often than you would think.

But first, before I get into the detail, here’s a quick overview of each business. One operates in the travel industry, while the other is in construction. Each market has its own private piece of turmoil. Third-party commissions have been hacked to pieces, and the lack of available capital has put many a building project on hold. The Internet is partly blamed for the demise of one, while our friends in Wall St seem to be touted as accountable for the other. Nevertheless, both of our businesses in question are doing quite nicely, thank you very much. Why this is needs some discussion; it’s partly why one achieved while the other didn’t.

Of course it is true that the Internet has dramatically changed how travel is presented and sold. For instance, last year Claire and I took the girls on a road trip down country to show them snow for the first time. (I know, the youngest is 9 years old, and we are bad parents for delaying it for so long.) Anyway, we researched and booked it all online. Motels, hotels, baches, ski passes – all done through www. You probably do the same yourselves.

Remember when you used to walk into a travel agent and they sat in front of the screen while you talked to them, and they were kept busy typing in what you wanted? Well, now we face our own computer screen, do all the typing and leave the travel agents sitting and waiting. A lot have moved onto other roles, but the business in this story stayed – and prospered.

They achieved this through niche marketing. Their niche was managing travel to a country that was responsible for supplying many new New Zealand citizens. Their business helps these people when they want to visit home. Simplicity itself. But beneath this basic sound business plan is a very clever person who I would imagine knows this market better than anyone in the country.

During a month I meet for the first time a fair number of company owners. I have become reasonably good at picking in a few minutes the ones that have a successful operation under their belt. The tell-tale signs are the numberof details they can tell me about their customers. From my experience, those that know the most, sell the most.

And the owner of this travel business knew a lot. It helped that before he founded the business he came from the same country, and therefore has a natural affinity with its local community. So if a golf tournament needs sponsoring, he is one of the first businesses approached and immediately confirms. If someone needs help settling into their new country, he lends a hand in whatever way he can. And if a relative back home dies suddenly during the early hours of the morning, he is the one that takes the 3.00am call, ensuring the person is on the next flight home. All this has been well rewarded. His travel agency now represents the majority share of all flights to this country from New Zealand. He spends so much on airfares that major airlines visit him at his modest office in town, just to check that all is well.

Success arriving as a reward for superior market knowledge was a theme repeated in the other business in this story. They manufactured quite integral parts that go into any commercial development project. Yes, they designed and built them here in Auckland and had made a success of doing this for many years. And based on the number of people in their showroom when I last visited, this was going to continue for a while yet.

The story of their achievement began with a good idea matched with a rampant market need. (How common is it to have one without the other?) However, this winning pair enabled them to form some close working relationships with the architects and designers who were also searching for ways to solve the same problem. Between them they came up with a product that was truly ‘market designed’.

So now they own the building they operate in, the showroom carries all their products, and architects and their clients frequently drop by to pick the right model to suit the building they are designing. But before clients visit, the managers of this business make sure they call the architect so they know whether or not they should talk about pricing with their customer and, if so, what pricing they are to quote.

I have never marketed to architects, designers or specifiers but I hear they are a challenging bunch to promote to. They are a busy lot and it’s not easy to get a hearing, let alone time to present your product as one ideal to be specified. They receive so many approaches from so many new product marketers that, for them, it all becomes one big mass of work interruption that should be avoided at all costs. Hence, once this business had done the hard work of successfully establishing their product in the early stages, it was then effortlessly specified again and again. Great when you’re the one with the product ‘in’, not so good when you’re not.

Anyway, that’s the two happy tales of previous success. Now it’s time to dig into the bit where things start to get off the tracks. So, just to recap, each business wanted to enter a new market. Both realised that this opportunity could potentially be worth more than their existing business. This made each of them willing to spend a bit to make their launch work. I arrived on the scene after each had done some work and had invested some of their budget. Nothing too major, probably in the tens of thousands – just enough to get them a bunch of new problems to solve.

Can you guess which of the two had the biggest ones? That question is a bit unfair – you would only be able to pick it if you met the people concerned.

You see Einstein was really onto something when he stated “Don’t expect the same thinking that got you where you are to take you where you need to go.” I see this played out again and again through the thinking I experience with those attempting new endeavours. This case was no different – there were stark differences between how one business owner saw their new market entry compared with the other.

Both realised that a web presence of sorts was required as part of their new venture marketing (that was why I was sitting in the office). But while one was struggling to see how this would come together within their current experience of building websites, the other had ploughed on regardless and enlisted some external help to get them going.

So when I met them, the travel people were on their third try at getting their website up and running. (The construction people had yet to start.) Fortunately, their most recent version was proving to be the best so far andsales were gradually coming in. Their path to this early success had been torturous. They started working with contractors in faraway lands; this lasted a while, cost them a reasonable-sized investment, but gave them nothing of value. This was scrapped and they engaged some local developers. Unfortunately, this ended the same way – it just took longer and cost more to get there.

Finally, they found a local website developer who, fortunately, did the job properly and they are now running with this website. During this journey they have learned not only how to pick a good web development partner but, more importantly, what sort of website works best for their new market.

But while they had accomplished more than the other business, this improved level of activity wasn’t the main attribute that ensured their future success. This I would put down to the importance (or lack of it) they placed in the experience they had gained from their previous success when deciding what to do in their new market. For them the two were not linked in anyway. They had realised at quite an early stage that the thinking that had helped them achieve success before would not help them this time. The market was different, the product was different, and the types of customers they would need to attract would be different. Therefore, different thinking was required.

So this meant embarking on creating a website that was more technically complex than their existing one – hence the issues having it built. And, once built, they needed to become aware of how to market it so that a reliable and responsive stream of prospects arrived on its pages each day. They knew very little about Google AdWords but what they did know made them realise it was a marketing channel they needed to learn more about.

When I arrived their AdWords click costs were going up and their daily budget was being chewed through before midday. But that said, they had done a reasonable job setting themselves up with a Google AdWords account and had picked a quality range of keywords to work on. I had seen a lot worse.

I completed some Google AdWords tuning, set up conversion tracking and Website Analytics, and then worked with them on building a more sustainable online marketing strategy. We bit things off in small manageable chunks – each time gradually growing their knowledge of both the methods of marketing but, more importantly, the vagaries of this new market.

Whereas, back in the construction business, this team was struggling to make any gains. Their thinking was very different. They saw their new product launch as an extension of what they already did and, therefore, had expectations of an easy success. The market had different ideas.

Their pre-existing customer intimacy had allowed them to operate with a website that was way below the quality of their competitors. However, their new product was a complex beast that needed its benefits explained in detail with case examples to support its message. All of these things could be achieved with the help of a website if it contained the right content, not the plain ‘brochure style’ messages it currently contained.

When I arrived, they had tried both magazine advertising and email marketing for the product launch, each with little success. They were struggling to see what the problem was and asked for my feedback. I mentioned that previous success in one category does not always ensure the same level of achievement in another. They were not convinced. To them it was a case of selling a similar product to a similar audience. I showed them their website, highlighting how little ‘selling’of the company it did. (There were less than 5 words on the home page.) They admitted that it may need some ‘tweaking’ and would get around to it once they had figured out what they needed to say.

Then I was told that the few pages that were there had been produced a few years back by a younger relative of one of the directors. They mentioned that they had known for a while that the site was lacking and, while the person who built it was still at University, they were available and able to add some extra content, once they had come up with some ideas of what needed to be added.

Their original success had come at a time when the Internet was quite young. Back then you could phone up your prospects and set up an appointment for the next day – all in a matter of minutes. Now things were very different. Their prospects were harder to track down and required an information-based approach that a good web presence could support. Times had moved on, but their thinking hadn’t.

I left them with a few ideas to work on and a challenge to start approaching the problem with more ‘new thinking’. Yes, they had achieved great things before – but this new market didn’t care about this history – and in their case it was the thinking linked to this success that was holding them back rather than helping them achieve. I made contact a few weeks back to see how things had changed – unfortunately, little had.

So, while the travel business carried on improving with gradual gains in their new market, the construction business faltered and never really got up to speed. Both were operating under the threat of competitors arriving to spoil their efforts. And as each day passed, one was better placed to win this fight than the other.

More often than not it’s the acceptance of new thinking rather than new skills that is the defining difference between success and failure when launching new products or services. And, like in these cases, this is doubly difficult for marketers to grapple with when their prior thinking has delivered such strong prior success.

So if you are struggling with a new product launch, or are failing to achieve additional growth with your existing offer, why not take a look at your thinking before considering anything else? What assumptions are you making that could well be wrong? Where are the differences between what you have done before and what you need to achieve now? And, of course, if you need some fresh new thinking on where to focus your online efforts give us a call – it would be a pleasure to help.

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