Category Archives: Strategy

What is Coming in Digital Marketing? Six Points

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Situation: In traditional marketing, many marketers were more focused on activity than results. In the digital environment, successful marketing organizations must become better at listening to their customers, watching them, and tracking their purchase decision behavior. What does this mean for the marketer? What is coming in digital marketing?

Advice from the CEOs:

  • The digital world has changed marketing. The traditional marketing campaign was led by creative. Through the early 90’s marketing was directed by media players and large publishers. Once a campaign was developed the pitch was “buy lots of impressions and customers will come.”
  • Since the dot.com boom there has been a shift to ROI – originally it was spend $x with Google, get y clicks that will yield z buying customers. This was very transactional and could be expressed relatively simply. Behavior is now changing, and the model is becoming more collaborative: a potential customer expresses interest and a need, a supplier offers a solution, the potential customer verifies and validates the offer through online communities: LinkedIn, Instagram, Snapchat, Twitter, Facebook, and other online communities. Eventually the potential customer may make a buying decision
  • The buying decision today is very different from the traditional offer-driven process. The whole decision process can happen in minutes.
  • For the marketer, this means moving far beyond simple advertisements. The marketer needs a presence on the sites mentioned above in addition to their website to woo potential customers. For marketers this is expensive and requires a different level of resource commitment. It is important for them to attribute the appropriate value to each online presence that the customer engages as they evaluate their buying choices.
  • Only through developing complex metrics, which change real time as customer behavior changes, can the marketer track and understand customer behavior and adapt the offer to the needs of the customer. As individual consumers increasingly engage employ new forms of digital technology the challenge to marketers only increases.
  • The digital marketer who will thrive will develop a sophisticated, metric-driven understanding of the multiple touchpoints and social interaction of a given transaction.

Thanks to Vikas Sharan, CEO, Regalix, Inc. for his contribution to this article.

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What is Best Practice for Emergency Preparedness? Three Guidelines

Situation: Local and world events remind us that both nature and events are unpredictable. At any time we may have to deal with emergencies including water, fire, accidents, earthquakes, and the possibility that we or our employees may not be able to get to or communicate with our offices for a period. It is prudent for all of us to have plans in place that will enable us to deal with emergencies. What is best practice for emergency preparedness?

Advice from the CEOs:

  • Develop an extensive business continuity plan. This includes: (1) an outline of potential situations that you may face in your locations, (2) potential losses associated with these situations, and plans for responding to each; (3) redundant remote data back-up; (4) manufacturing or service provision continuity planning; personnel contingencies; and (5) alternate vendor and service arrangements.
  • Drafting a full emergency plan takes time and work, however, it is essential. Start simply: look at the obvious risks in your locations; for each risk, develop your back up or continuity strategy and start to put it in place; let the list of contingencies grow with time as you recognize more risks; and, Start this exercise NOW!
  • Once you have a plan, drill the plan. Make sure that your people know what to do in each case so that if something happens they are prepared. It is amazing how this can build the confidence of your employees that they will be able to handle emergency situations.

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How Do You Move from Early Adopter to Mainstream? Seven Thoughts

Situation: A company has established market leadership in an emerging market. When you innovate in a niche, focusing on early adopters, you eventually run out of early adopters. The challenge is broadening the appeal to a larger mainstream customer base. How do you move from early adopter to mainstream?

Advice:

  • The challenge is both messaging and cultural. In messaging, you must support the new norm. This means convincing the customer that if they are not with you, they’re being left behind. You need to demonstrate that your established, proven solution is the new norm.
  • The cultural challenge is maintaining a culture of innovation and attracting the right talent while becoming a mainstream company. An attraction to new talent is that you are cutting edge – changing the world. This aura is critical to a start-up. You must maintain this innovative culture as you become the market leader.
  • How do you overcome these challenges? Finding people who’ve been there and done that increases the odds in your favor. We hired a marketer who had helped take another company through the same transition.
  • Hire for excitement, energy and enthusiasm. Quickly remove new hires that turn out not to fit. Maintain a freedom to fail atmosphere. You need people who will take risks, but who will also step back and quickly change direction when the risk isn’t productive. Decision-making speed is a great advantage of small companies.
  • Create an organization that celebrates innovation. Institute “Hack Days” when employees are free to work on projects of their choice. A new product that brings business audience targeting to social media came from a Hack Day project.
  • Keep everyone informed. Conduct company-wide daily stand-ups. Individual updates are quick – 30-45 seconds. This fosters open communication and awareness, and surfaces issues before they become problems.
  • Weekly, send out full disclosure emails including key financial metrics, successes and failures. Monthly conduct executive-only stand-ups. These are longer, but updates are quick and focus on progress to goals, as well as next month’s goals.

Thanks to Russell Glass, of Bizo, Inc. for his contribution to this article.

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How Do You Negotiate a Challenging Merger? Six Points

Situation: A company is considering a merger. The other firm competes with customers who account for 25% of the company’s current revenue. How do you maximize the value of this merger to the company while mitigating the negative impact on current business? How do you negotiate a challenging merger?

Advice from the CEOs:

  • The maximum risk from the combination is loss of 25% of current revenue. The merger makes sense if you believe you will gain upside which more than counters this risk.
  • Both companies have brand equity. Maintain both brands and to continue to promote them. Maintaining both brands will buy you time to replace business which is potentially at risk.
  • Talk to customers and get their perceptions of the pros and cons of the potential combination. Ask about any concerns that they may have. Understanding the pros, cons and concerns will help you to mitigate negative fall-out.
  • Legally, in a 50/50 split, whoever is the chairman of the combined company will call the shots. If the head of the other company is chairman, you will have little recourse if he decides to fire you.
  • In the current case, this individual has built his company through previous mergers. Visit and break bread with those who were principals of these companies at the time they were merged or acquired. This will tell you a great deal about the individual with whom you entrusting your future. You will also learn what the others did during their mergers to help plan your own moves.
  • Give yourself a back door or Golden Parachute after six months if the merger does not go as you anticipate.

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How Do You Communicate Benefits Changes After Being Acquired? Seven Suggestions

Situation: A company was recently acquired. The acquirer wants to merge benefit structures between the two entities. While company contributions are similar, distribution of benefits between retirement plans, health plans, and other benefits between the entities varies considerably. How do you approach the staff about the changes in a positive manner? How do you communicate benefits changes after being acquired?

Advice from the CEOs:

  • Ideally, you want to survey employees on what is and is not important to them about their benefits before the package is finalized. This will help you negotiate on your employees’ behalf.
  • Ask the acquirer whether a “cafeteria” benefit program is feasible. This would allow your employees to make choices among benefit options, and to fund these choices either at a company-paid base level or to supplement their choices through payroll deductions.
  • Inform the acquiring company of your state’s regulatory policies on state-specific benefits.
  • Once the new benefit package is finalized, ask for assistance communicating the new package to your staff. Create a simple and concise grid for the program: amount of company contribution: benefits under old program, benefits under new program, use the grid to demonstrate that while the allocation may be different, the company contribution remains the same and the total value of benefits offered is unchanged.
  • If you find that a highly valued benefit is being reduced, consider a short-term subsidy to ease the shift.
  • Be clear about decisions that your employees must make in the new program.
  • If you have access to industry or regional comparisons for like-sized companies, you may wish to share these.

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How Do You Reduce Dependence on a Few Customers? Four Thoughts

Situation: A company has been very successful, but one customer represents over 60% of their sales. To grow, the company needs to diversify its customer base. How do you reduce dependence on one large customer? What are the risks involved? How do you reduce dependence on a few customers?

Advice from the CEOs:

  • The key to getting new customers is to dedicate time and resources to the task. Consider hiring a business development professional – a commission based “hunter” who has experience landing big accounts. You may pay this person a hefty commission for bringing in new business, but diversifying your customer base can be worth the cost.
  • If there is shared ownership of technology co-developed by the company and client and the client does not wish to pursue markets beyond its strategic focus, is it feasible to negotiate rights to pursue this business? The larger client will pursue their own interests, not those of the smaller vendor.
  • Perhaps a win-win can be worked out, but it may be challenging – particularly if the client is concerned that use of the technology in other markets could have a negative impact on the client. Use caution. The easiest way for the client to defend itself from a perceived threat is to sue and bury the smaller vendor through legal expenses. Regardless of who is “legally right,” deep pockets can win through attrition.
  • Consider recreating the opportunity. Create your own adjunct proprietary product with your own software or design talent and use this to expand your horizons. Be aware, the large client can still sue if they believe that your proprietary product impinges on their rights.

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How Do You Choose The Right Strategic Partner? Five Guidelines

Situation: A rapidly growing company is expanding in both its primary market and into new verticals. A number of companies are interested in strategic partnerships. How do you select the right partner in the right space? How do you choose the right strategic partner?

Advice from the CEOs:

  • At the end of the day it’s about a connection with the partnership which extends across both organizations. Look for cultural synergy with the other company. Do your and their managers and employees “click” or are they oil and water? This is a gut assessment.
  • Is the quality of people in both companies complimentary? Is there similar drive for quality and attention to detail? Will technical integration be smooth? Are systems complimentary? At a minimum on both sides need to possess the right skills so that these factors won’t hinder the project. Are sales and marketing approaches compatible? Will teams be able to work together?
  • You need to have strategic commitment across both organizations. Partnerships don’t work if there is only alignment at the top. Executives can’t shove a new opportunity down the throats of those who report to them. There must be excitement about the opportunity across both sides of the partnership. There must be complimentary competencies, capabilities and commitment. Is there a clear understanding of the goals and objectives required to succeed? Reward structures and incentives must be aligned down through the two parties. Conflicts will lead to struggles.
  • There must be a strategic alignment between the two organizations so that both see the partnership as complementing their broader strategic plans. There must be a fundamental strategic win-win. The venture must be seen by each party as core to their business, plans and results. If this isn’t present, the collaboration can collapse when a better opportunity that comes along.
  • Look for some gauge that the partnership is as important to the other party as it is to you. What other partners do they have? Is the size of the opportunity enough so that you are assured of their ongoing attention?

Thanks to Jim Soss of Red Aril for his contribution to this article.  

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Can Marketing Partnerships Work Well? Five Considerations

Situation: A company has the opportunity to form a marketing partnership with another company. The primary potential benefit to the company is gaining access to new customers. On the other hand, partnerships may bring complications. What is your experience with marketing partnerships? Can marketing partnerships work well?

Advice from the CEOs:

  • Marketing partnerships can certainly work, provided that both parties see benefit to the relationship, and –  more importantly – both parties are committed to make it work.
  • Clearly define boundaries with the partner. If either company can perform a particular service, whose customers are who’s? Is there alignment throughout the partner’s organization regarding the partnership? Are their conflicting priorities within different branches of that organization? Test the waters ahead of time and assess how these will potentially impact the partnership.
  • There are potential pitfalls to take into consideration. What is the in-house/outsource attitude of the partner? If there are strong voices for in-house production or service provision, these will not be supportive of the partnership.
  • Monitor the quality of the partnership over time. Successful partnerships are based as much on friendly cordial relations as on business priorities. Are your business cultures and ethics compatible? Who is the champion for the partnership on the other side? What will happen if the champion leaves? Is there a backup champion?
  • Build an exit strategy into the partnership that will allow you to leave gracefully and mitigate financial or good will consequences if the partnership sours.

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When Do You Focus on the Plan –  When Do You Adjust? Four Guidelines

Situation: The dynamics of an early-stage business require balance between focus and opportunity. Both are important in a dynamic business environment. The challenge is in the balancing act. When do you focus on the plan, and when do you adjust?

Advice:

  • Never allow friends to become statistics. Think of your customers as your friends. Often the most loyal and vocal friends were early adopters and got the company where it is today. They remain important participants in the conversation and should always be in focus.
  • When using social media to communicate to your audience, remember that this is a face-to-face conversation. This is a key point of focus. Remove as much friction from online interactions as you can. Make it as easy as possible for people visiting your web site to buy. This requires both live interactions with users and attention to detail. If a question keeps coming up, answer it; put the answer right up front on your web site where it cannot be missed. We’ve all made hundreds of tweaks, each tiny. Each has removed a point of friction. As the company grows it is easy to lose sight of these details. Never lose sight of details.
  • Much of what businesses face is transitory. It is important to stay nimble and not get stuck fighting the last skirmish. Early in our business history we found that a subscription service was difficult for institutional users like purchasing departments in schools to understand. We focused on fixing this.
  • Be careful not to chase bright shiny objects – opportunities that take you outside your principal market competence. Would you try to modify a hammer to put in screws? One company’s principal product is a communication device for kids with verbal challenges. Some have suggested that it could also be a teaching device. In the future there may be room in the company’s plan for a teaching device, but this will be addressed as its own market and application when the company is large enough to diversify.

Thanks to Phil Bookman of Assistyx for his contribution to this article.

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What Are The Keys to Negotiating an IP Acquisition? Six Considerations

Situation:  A Company is interested in acquiring either the intellectual property (IP) of another company or the company itself. The target is a minor division of a larger parent company. The CEO contacted the parent and confirmed their interest in a deal. What are the keys to negotiating an IP acquisition?

Advice from the CEOs:

  • It is essential to assure your rights to both current IP and future enhancements. This applies whether you or the parent is the final holder of the IP. Look for clear language as to what constitutes base IP, derivative IP and extensions of the IP. You want to preserve your interest in future derivatives and extensions that you create.
  • There is a material difference between your position and that of the parent of the IP. If the parent retains the IP, they also gain certain rights to IP extensions based on the current IP. If you own the IP, their potential rights to future IP are lost. If the parent feels that the IP has strategic value – whether or not they are currently taking advantage of it – this will be one of the more difficult aspects to the negotiation.
  • Are there options besides acquiring the IP? The parent can grant a fully paid license to the technology, with access to the people and assets, waiving residual rights to future IP extensions, and no restrictions on transfer. Another option could be a one-time royalty fee, which is a perpetual license.
  • As you perform your due diligence, try to get a sense of the parent’s motivations and concerns for entertaining your interest in the acquisition. This will help you to frame a deal that works for both parties.
  • If the parent has been an active licensor or seller of IP, look for lawyers who know the company. Try to secure one of these lawyers as counsel for your negotiation.
  • From a liability standpoint, it is better to buy or license the IP and technology than the company. Liability travels with the company. Part of your negotiation will be who inherits any carry-over liability.

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