Saturday, September 20, 2014

The Failure of
Old-School Marketing

Book review of The End of Marketing as We Know It by Sergio Zyman (published 2000 by HarperBusiness, an imprint of HarperCollins Publishers).

"The End of Marketing as We Know It" is a must-read for any microISV selling consumer software. It will help sharpen developers' software marketing skills.

Sergio Zyman is known as the person responsible for replacing Coke with New Coke. Zyman left The Coca-Cola Company after the New Coke release, and returned to the Coca-Cola company six years later as Senior Vice President and Chief Marketing Officer. In that capacity, Zyman increased the sales of Coke by 50 percent in five years, from ten billion cases per year to 15 billion cases.

Zyman believes strongly that marketing is all about selling things. Marketing has nothing to do with image.

Old school marketing fails, in large part, because marketers are too full of themselves. The discipline of marketing is a science, Zyman believes. Spending money on marketing is an investment that has to more than pay for itself. Marketing is about "systematically and thoughtfully coming up with plans and taking actions that get more people to buy more of your product more often, so the company makes more money." Period. Even though Zyman doesn't write about the software development industry, many of his ideas apply to software marketing.

Unfortunately, many microISVs look at marketing as an afterthought. The mindset too often is "I have a few hundred dollars, so maybe I'll do some marketing." Instead, software developers should treat marketing as an investment. Developers need to focus on results.

Marketing budgets shouldn't be arbitrary, or based upon a percentage of retail sales. Instead, microISVs need to focus on how many new sales you can get, and how much it will cost to get these new sales.

I was fascinated by Zyman's approach to seasonality. Unless you have one hundred percent of market share, you should always try to increase market share in traditionally low periods. "Make seasonality the other guy's problem," Zyman urges.

Zyman believes that it's much easier to sell additional products to existing customers than to convince new prospects to buy your products. If he were marketing software, I'd bet that he'd be sending out a regular newsletter, and that he'd be a regular blogger. His newsletter and blog might invite customers to upgrade to a more powerful version of the software that they'd already bought. And it would mention the exciting features that can be found in his company's other software applications. Zyman would probably be offering discounts on other people's software, too, under an affiliate relationship with developers who market similar, non-competing applications.

Zyman doesn't care for megabrands. He believes that you have to differentiate and target specific audiences. In fact, Zyman believes that it's a good idea to have overlapping products that appeal to the same target audience. "Somebody is going to compete with your products and try to steal your customers," Zyman reminds us. "If someone's going to do it, why shouldn't it be you?"

While Zyman admits that the power of consumers continues to rise, and that consumers know that they have choices, he believes that most consumers "have no idea how to decide." Marketing in general - and software marketing in particular - is all about helping consumers make these decisions.

Zyman cautions, "Don't let price be the tiebreaker". Instead, educate prospects on why they should buy your software.

In the author's own words: "Marketing is about spending money on activities that enhance the value of your product, brand, or service and give consumers more reason to buy more of it, more often. It is an investment. It is not an expense that you have the option of cutting. If you want to grow, you have to market."

"The End of Marketing as We Know It" is a must-read for anybody who sells software to consumers. If you're selling business applications, or if you're selling services, you'll have to do a little translating of Zyman's consumer-oriented strategies. Software developers can use this book to strengthen their software marketing.

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