May 19, 2011 | Communication, Customers, Marketing, Social Media, Strategy
It will be worth watching the way Microsoft goes about leveraging their $8.5 Billion (should have paid Aussie dollars?) purchase of Skype, there will be a swarm of lessons to be learnt:
- Integration of a “free” service into a product/profit business model. This challenge will create sufficient tensions and cultural speed bumps to keep the academics busy for a long time. History is against Microsoft, most purchases like this that seek to integrate differing cultures fail to add value in the long term.
- Skype has a huge customer base, but is only marginally profitable, turning that around without risking the loss of the existing customer base who want a free service will be problematical
- To what extent is this the foundation of a marketing effort by Microsoft to protect their hugely profitable Office franchise from cloud based competitors like Google Docs, and how will this all pan out?
- Will the existing Skype customers continue to support the service now it is part of the “evil empire”
- How will Apple and Google react, both appeared to have been beaten in an auction for Skype. They both have communication products that compete with Skype, but few users.
- Can Microsoft assemble the capabilities to build new, risky, communication products that undergo a process of continuous improvement in the market with the input from users.
As a user of Skype’s free service, I am not sure how I would react to being charged, probably just “suck it up” but the commercial opportunities for conferencing calls using video must be immense, and the free service is a great entry point with a huge existing user base. Hopefully Microsoft sees it that way
May 10, 2011 | Customers, Marketing, Social Media, Strategy
Pretty big aspiration, to outcompete the two businesses that have consistently demonstrated the power of innovation as the core competitive tool over the past 10 years, and have reaped the rewards by creating and redefining markets and then taking all the gravy. The story of Skype since the company was initially bought by Ebay is enlightening, and shows how it has been done.
Ben Horowitz, a tech entrepreneur and angel investor got into the act by being part of a consortium that bought Skype for just over 2 Billion $18 months ago. They withstood full frontal assaults from both Google and Apple, who both have a habit of winning, and have just announced the on-sale of Skype to Microsoft for 8.5 Billion. Reasonable return.
In Bens blog entry, where he announces the sale, and articulates the short history that netted$ 6.5 billion in the time it takes my local council to consider an application to build a fence, the key to this stunning outcome is in the first sentence in the second last paragraph, where Ben referrs to the quality of the people, and the network effect of existing Skype users as being the key to the success.
The power of an idea whose time has come, coupled with the best of the collaborative and networking tools of the net 2.0, and great customer service.
May 4, 2011 | Communication, Customers, Marketing, Small business, Social Media
The technical solutions emerging are fantastic, but how often do you see the technology get in the way of genuine interaction with a customer?.
Like any tool, the tech-tools of the 21st century are only as good as their users, and if their users are technology obsessed, as many seem to be, so what? How does that add value to the consumer?
The great opportunity is to use the tools to become customer obsessed, and genuinely deliver value and benefit to customers by intimately engaging with them and their needs.
It takes effort, and the right culture to support the effort, but “micro-marketing” to consumers, meeting their individual needs via the tech tools will become the driver of success in the future.
Apr 16, 2011 | Branding, Customers, Marketing
Most marketers will tell you what their brand stand for, premium quality, reliable performance, consistent taste, great service, and so on. Sounds a bit like a bunch of cliches doesn’t it?
However, it is just as valid to define your brand by what it is against, and often it seems the “againsts” are somewhat implied, allowing some latitude in interpretation.
The Green party in Australia is against native forest logging, Nike is against lounge lizards, Apple is against sameness, and closer to home, the SME Riverina Grove‘s brand is against average tasting mass produced “Italian” style packaged foods.
Think about it next time a branding discussion emerges, weather it be in a formal strategy session, or probably better, around the coffee machine.
Apr 12, 2011 | Customers, Innovation, Marketing, Social Media
It seems only a short time ago I stumbled across the reality that mobile devices and their GPS capabilities could be used as tools to entice customers in various ways, almost like spruikers outside “that” sort of establishment . Suddenly they are everywhere, and blogs are popping up to tell you how they work, spreading the word still more quickly, and the use is exploding in the US.
Today the iPhone app used by Tesco to market product offers direct to customers based on their purchase history was demonstrated to me by a Tesco customer. The purchase data is captured at the checkout, by swiping a Tesco card at the checkout, but you do not need the card, there is an app that provides the code by swiping the phone over the reader. Your product and brand preferences, baskets, purchase intervals, location, time of day, and a wealth of data is analysed, and tailored offers sent to your phone. This is a remarkably powerful marketing tool, now a relatively mature application (ie older than 6 months, and working) in the UK, and Tesco seem to be experimenting and innovating constantly, staying ahead of the game.
For Australians, most of this stuff is still fantasy, the “connected” group who think beyond facebook, have seen comment and descriptions, but not the application, at least not in Australia. However, it is just around the corner, coming to a supermarket near you!!
Apr 5, 2011 | Communication, Customers, Marketing, Social Media
Following on from yesterdays somewhat cynical observations about the supposed ease of using viral marketing as an advertising “strategy”, driven often by cost considerations and dills who do not understand, it seems sensible to take a closer look at e-advertising, and the ways to target advertising to where it may deliver a marketing return, and hopefully eventually, a financial one.
Ads on the net have proliferated, from targeted ads that look like the stuff on TV or in magazines, to stuff, sometimes highly creative, posted by individuals, and that would never cut it in the advertising old days, but that leveraged the dynamics and connectedness of the net and have worked a treat. Predictably, the tools to manage placement have evolved pretty quickly as service providers seek an alternative to the disappearing revenue from traditional media.
The social media phenomenon of the web 2.0 has opened up another way to slice and dice potential audiences to target communication at those more receptive for some reason, but when you have a starting point of 600 million facebook, and hundreds of millions of other “opportunities”, Foursquare, Flikr, U-Tube, et al, the problem becomes one of analytics. Predictably there are a host of start-ups addressing the challenge of organising the data into a useable form, but the numbers are huge, and the organic unpredictability of an individuals capacity to respond to messages of all sorts makes this a real challenge.
I still fall back on the old fashioned formula of identifying a need, then over-delivering to customers, one by one, as the starting point. The difference is we can now conduct hundreds of small scale “experiments” using all the digital tools and low cost communication, the “experiments” themselves becoming the medium of communication exchange with highly fragmented potential and existing customers.
