The World's Second Oldest Profession

So, there I was, standing in the front of a restaurant full to the brim with members from the Business Women’s Network of Howard County, Maryland talking about prostitutes and Eliot Spitzer. Now, there's a sentence I didn't think I would ever write, but it's true. The funny thing is, the metaphor worked like a charm. The question, "what does she have that I don't have and what do I have that she doesn't have" was just what these small business women needed to hear. I gave them a few more, like "stand in your customers shoes" and "be your competitor's customer," but the first really captures the essence of CI for small business. Beware the suited-wonder who tells you that you must have a sophisticated portal and web agents to do competitive intelligence work - it really is the world's second oldest profession and all you need is a pair of eyes, or ears, or somebody else's to look and listen for you. All you need to know is "what does she have that I don't have".

I must admit that at a certain point I was worried that the reference to prostitution would offend some of the women in the audience, just the notion of comparing ourselves to a hooker might be too edgy. But these very smart women caught on immediately and I could see them (or thought I could) visualizing their customers, their business, and their competitors business' in a new way. They were seeing customers as they made a choice between them and the competition. They were seeing themselves as the customer making that choice. And they were seeing that they could do competitive intelligence for themselves and do it well simply by asking a few key questions:

Why would a potential customer choose my competitor over me?
What do my competitors offer that I don't offer?
How can I distinguish myself from my competitors?
What are my customers looking for?
What are my competitors trying to accomplish?
What is my position in the marketplace?

Just the basics are far more than most businesses ever collect. The idea of stepping outside of yourself and your business to find out what is going on in the market is something that so many small business owners never do, never thought to do. My job, standing in front of those women was to introduce them to the idea of doing just thought, doing it purposefully, and asking the right questions. If I had to invoke the business practices of a prostitute that makes $3,400 an hour and it works, then I have Eliot Spitzer's indiscretion to thank for helping a lot of small business owners see the possibilities. You never know, one of them might grow to be a mighty market force and they might even give Spitzer a job out of gratitude....nahhh.

Enjoy!

Know the Guy

Wow, April was my last blog? How the time flies when you're having fun out there. I have a few things to say about fun since I really do like having a little myself; duathlon, mountain biking, running, skiing, snowboarding, cycling, and general outdoor activity. You can Google me "Kellyann Davis" and see for yourself. Think about what that might tell you about me, I'm competitive, I write a blog, I own my own company, you'll even find out that adopted a blue-eyed Saint Bernard and named her Bette Davis if you just "Google" me. Wouldn't you like to know that before you begin working with me, or even more importantly, negotiating with me? I think it might help. I'll know more about you than you think before I ever shake your hand and say "very nice to meet you" because it gives me an edge. Competitive Intelligence includes people, I cannot emphasize that enough. When you think you have a company pegged and can predict its every next move, remember the people and remember that people aren't necessarily rational.

Consider CEO number one, a guy who likes marathoning and you know that because you "Googled" him. You know he runs about three marathons each year and has run more challenging events every year.

Now consider CEO number two, she's the former president of the local business association, she is the mother of two elementary age kids, attends and comments in City Commissioner meetings, and is on the board of a local charity.

CEO number three, no bio, no "Google" results, no pictures, nothing. You don't know anything about this guy, zippo, zilch, nada. However, you did find out that his wife posted a not-too-flattering comment about him three months ago in a discussion board dedicated to helping jilted spouses get over their bitterness. His wife said that he left her for a "slut at the office."

You're headed into a meetings with all three of these people, you're selling them on a new knowledge management system. You know about the IT systems they operate in their companies, you know the latest deals their companies have done, you know all about their products...but the guy selling a KM sitting next to you knows everything I just listed above. Who is more likely to get the deal? The more you know, the more you can smartly appeal to personalities, build relationships and trust, and sell like crazy. Same goes for any dealings. One caveat, it freaks people out if you flaunt your knowledge about them, it's a deal breaker so don't ever do it...as we say at BlackSand, "just know."

More about the personality of companies later, and about the persons who set the tone of the work environment. Know the people before you go into a meeting, know what motivates them and how they express that in their lives. You'll have an edge and that's what this is all about.

Competitive Intelligence, Know Thyself Too

Good competitive intelligence can provide a company with a clear view of their position in various markets, and it should help company executives to become more magnanimous. Good competitive intelligence will allow a company to predict their competitors' next moves, exploit their weaknesses, become proactive to disruptions in the marketplace, and successfully launch new products and services. After all, cCompetitive intelligence is the world's second oldest profession, no matter what you're selling, you need traditional knowledge about:

• Pricing
• Customer Views
• Market Share
• Regulations
• Market Culture
• Relationships Across the Market space
• Deal Structure
• Product Distinction
• Disruptive Technology
• Competitors New Product Launch Plans
• M and A opportunities and threats
• Marketing and Advertising Efficacy
• Media Coverage

A company also needs to look inward for threats and opportunities. It's important to know what employees think about market position and products. A company that gathers information from employees about products and markets will find gold in them. But an often overlooked aspect of CI efforts is an internally facing view. It's important to know if you have employees looking to leave, why they are considering jumping ship, and furthermore, where they are looking to go. Your company will benefit also from learning what your employees think of products and services, what they know about the marketplace, their ideas for improving existing offerings and ideas about new products and services. If you have low morale, a high turnover rate, and/or are about to lose key members of your team it could significantly impact your competitive advantage. Let's say that a regional sales rep with key relationships in the mid-Atlantic marketplace suddenly springs his or her two week notice on you, how will you ensure that their market knowledge and key relationships don't disappear with them. Better yet, how do you keep them on board? Knowing your employees is a key piece of competitive intelligence that is often overlooked.

Internal intelligence can be achieved using a variety of methods including personnel file review, interviewing key employees, employee focus groups, and incentives to share ideas and feedback about various practices and products. These methods have a dual positive effect by letting employees know that you care about their feedback and ideas as well as gathering vital intelligence about the overall health of your workforce.

There, of course, are other methods of finding out what your employees are talking about, but do they cause more harm then good? Some companies conduct credit checks, email scans, and general secondary scans for resume postings, blog postings, or other indicators that an employee may be in trouble or looking for other opportunities. The question is, how much do you need to know about your employees to ensure your company's health and at what point does the perception of mistrust make the issue of unhappy employees a self-fulfilling prophecy. Some methods can be toxic, even if they provide some valuable information, they may create more issues than they help to resolve.

I have some thoughts about creating a CI system that organizes intelligence and prompts research in both traditional and internally focused areas based on need. The system would be aligned with company metrics, strategic planning and marketing efforts, and R and D. In my next entry I'll outline this system.

Market Research and Strategic Marketing Unite!

Market researchers can provide the insights necessary to develop strategic marketing plans but, as I explore the world of marketing professionals more and more, I find most marketing plans lack the basics. First, you must know your customer. Not just where they live, how much money they make, and how much they have paid attention to your products and services in the past, but how they really think. You have to know how they talk about your products, how they use them, and how you can find others that speak and think in a similar way. Most marketing plans I have seen consist of customer demographics, and the best I have seen pinpoint persons in various markets that fit the same basic profile. It's just not enough, it doesn't hit on the key reason a person might open their wallet, the WHY.

I've been wondering about this seemingly obvious disconnect for some time and I'm beginning to think that there is a gap between market researchers who really understand how to get and mine appropriate data, and marketers who create the collateral, the messaging, and the visuals that are used to expose customers to the product. There has to be a joke in here somewhere about three guys walking into a bar, if it hits me later, I'll be sure to put it in the comments section of the blog. What we have here is a case of left brain people and right brain people not communicating well... as the Warden might say "what we have here, is a failure to communicate." How do number crunchers like me talk about the results, and how do the more artistic types utilize them. Sometimes the number crunchers are one trick ponies (I'm a number cruncher so bear with me) and don't know to look at the materials their counterpart marketing professionals are doing enough to know what research they need to do next, they just crunch what they're told. For example, I recently saw a case where the marketing department created a very nice magazine for their customers but had no idea that they could make a lot more advertising money if they would only cross match their customers with other products like energy efficient appliances and cars. And the market researchers were fixated on finding out if the customers liked the content of the articles in the magazine..big missed opportunity. And it happens all the time.

The solution is a little "touchy feely" perhaps, but I think it could work, they have to find a way to build relationships with each other. They have to find some common ground, or a person who can help them find common ground (a shameless plug for BlackSand Research consulting services available at reasonable prices). The kind of communication that takes place when the groups get together and start talking about what comes next, the next level I hear about all the time that so often goes undefined. Ideas like "what if we find out what language our customers use when they talk about our products" may seem simple but is so often ignored in favor of the marketing people thinking they know, and the number crunchers really not caring about the qualitative crap. Uh oh, not crap if it's properly coded.

It's time to move beyond the simple demographics of the markets we sell into. Time to really understand the people in those markets and deliver messages that match the sometime idiosyncratic styles of customers and potential customers in those markets, specifically. If a message can sell a product because a customer gets it, then it makes a lot of sense to do the research on what will help them along in their understanding. We need both sides of our brain to make sense of this crazy world, and we need both to reach customers. Put them together and get them communicating!

Understanding People in Markets Brings Better Insight and Better Decisions, the Case of Chinese Bicycles

I've been thinking about bicycles a lot lately, just part of the Summer and Fall litany of hobbies that keep me from getting too ummmm, robust. Plus, I just plain like riding bicycles. Since I also think about selling things in China a lot, the two subjects converged and fell in love with each other in my head. Seems like everyone rides a bike in China, from kids to great grandmothers. It's not a game for Lance Armstrong wannabes, kids and psycho trail junkies, it's the principal form of transportation for the Proletariat masses. So, you'd think that non-Chinese bicycle manufacturers should be licking their collective chops about the market, all those riders mean big business, right? Not necessarily.

The most popular bike in China,the Flying Pigeon one speed costs about $35 bucks on the street in Beijing, or Tianjin, the bike manufacturing capital of China. But some will tell you that it isn't worth buying a bike since they are so often stolen, brazenly stolen. Some guys treat stealing and reselling bikes like it's their job, and it is. You can buy a slightly hot Pigeon for about ten bucks. In fact, think of it as a different business model, you are actually paying money to rent a community bike and the thieves are really just ensuring appropriate circulation of the bikes, not committing any crimes. Given this social context, it doesn't make a lot of sense to think of China as a burgeoning bike market for a company like Santa Cruz or even Trek bikes who produce some of their low-end stuff in China.

Sometimes we get caught up in our own way of looking at the world and forget that though we are all human beings with similar hardware, human societies can work in very different ways. If you want to understand how a market works, study the people and beware of market reports and market researchers that look only at the numbers. Lots of statisticians are socially challenged (I'm one of them so I can make that joke), it's no excuse for failing to consider how the market really behaves. In this case, considering the underlying traditions and the numbers you might want to consider exporting "liberated" bikes rather than importing your most expensive two wheeled rockets.

If you're interested in Chinese attitudes toward bicycle ownership and you're in the mood for a good indie film, check out Bejing Bicycle by Xiaoshuai Wang.

Innovation, With a Capital I

Innovation is the key to success at the X Games, it's true for tricks and for equipment. Eric von Hippel, Professor and Head of the Innovation and Entrepreneurship Group at the Sloan School of Management at MIT, says that followers of extreme sports have become expert at adapting and refining the equipment they use. This week we and Professor von Hippel finally get to see a few of the new tricks the athletes and the engineers have kept up their sleeves for the past year and they aren't leaving anyone hanging. Anyone who is interested in how to innovate, what innovation really is, or feels a need to prove to themselves that sometimes, innovation is more than a buzzword, should spend a few hours watching ESPN's coverage of the X Games in California this weekend.

The increasing popularity of Freestyle sports, including motocross drives athletes and engineers to new heights. Travis Pastrana, one of the premier athletes in “Extreme” sports has innovated past the wildest expectations of fans executing tricks like the double back flip previously possible only in video games. Now, the engineers have joined him in attempts to create a motorcycle that will allow the rider to spin the handlebars as they jump. Engineers had to completely rethink motorcycle fork and suspension design spending $250,000 on the “one-off” bike Travis used in the August 2006 Summer X Games.

The bike's front end cost over $250,000 to design and produce. And although it looked like it was heavily derived from bicycle technology, Pastrana's people assured me it was 100% moto-inspired. The mini-forks only allowed for a few inches of travel so the landing was tricky. The bike was also equipped with a Recluse auto-clutch to give engineers one less cable to worry about. The process was so secretive that Cernics-Suzuki spokespersons would not reveal the identities of the design team members or allow any pre-X games pictures of the bike.

This serves as a reminder that innovation is inherently risky, especially when testing involves jumping 65 feet on hard, packed dirt. Look at the new fork design above, it represents a year’s worth of work for a team of engineers and hundreds of thousands invested. This also reminds us that innovation is hard, in this case for the hardware and for the human. Those new barspin forks broke during taking off for a jump during X Games competition. Despite this setback, the new design promises to revolutionize motorcycle suspension design.

Check Out how Diet Coke and Mentos Scored Without Lifting an Advertising Finger

This is such a good example of the new paradigm discussed under the post on Social Computing that I had to share it with you. Millions of hits on this Internet Video produced by two amateurs who like to dabble in mad science can't be wrong. Long live distributed marketing! And, congratulations to Coke and to Mentos on scoring big without spending a dime.

From an article published in the Washington Post, Sunday, July 2, 2006 - by David Sharp of the Associated Press

Americans have a new way to celebrate the Fourth of July: Drop Mentos candies into 2-liter bottles of Diet Coke and watch as the soda shoots skyward. For the messy technique, thank Fritz Grobe and Stephen Voltz of eepybird.com, "Entertainment for Curious Minds."

The two performers from Buckfield appeared in a three-minute Internet video in which they don goggles and lab coats and show the world how to create the geysers. The resulting 20-foot blasts have captured the imagination of millions.Grobe, a juggler, and Voltz, a trial lawyer, enlisted Mike Miclon, the owner of the theater where they perform, to operate the camera and a friend to create the toe-tapping techno music soundtrack. Miclon said his wife held an umbrella next to the camera just in case.Coke and Mentos have embraced the phenomenon.

Mentos, a subsidiary of Perfetti Van Melle USA, Inc., features the video on its Web site, and a Coca-Cola Co. spokeswoman said the Atlanta company is pleased that people are having fun with it. "You never can tell what's going to capture people's imagination," said Susan McDermott, the spokeswoman. For the record, she noted, people won't suffer harm from chomping Mentos and washing it down with Diet Coke.