Fragile Knowledge

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Awhile back I was reading the book The Gated City by Ryan Avent and I was struck by this sentence: “Throughout history, technological progress has been alternatively constrained and encouraged by the quality of communications technologies — fragile storage technologies allowed ideas to be lost while innovations like printing facilitated wide distribution of new findings.”

Rather than thinking about the fragility of knowledge in cities or societies as a whole, I realized this was a perfect description of most knowledge inside of companies. Very often someone has a brilliant idea, but the idea is quickly forgotten or is only executed in one small area of the company. The knowledge was fragile. It disappeared and the advantage that was available for the company is gone. I think this is where deliberate building of systems and build-measure-learn style testing are exceptionally important to create the significant long term growth that comes from a 1% improvement each day.

One of the things that I’ve come to realize over the last few years is that a business is just a series of systems, executed with some degree of consistency, resulting in a product that the market expects. The success of a company comes down to how well the systems are executed and how quickly a company can change as the customers change. Being intentional about building the systems, in a way that allows everyone in the company to execute the required actions quickly and without using cognitive overhead to figure out the process each time, allows a company to grow their knowledge quickly. It allows internal insights to become institutionalized. As long as you have a dedication to build-measure-learn and don’t get stuck on any particular idea, the results really start to build on themselves. The knowledge in your company, much like the knowledge inherent in a city (think New York for fashion or Silicon Valley for tech), starts to build upon itself.

In The Gated City, Avent talked about many types of innovation, from physical to organizational and institutional, summing it by saying “…and there is institutional innovation; by developing a system of property rights a society increases the incentive to turn a stray idea into a functioning business. Innovation is simply the evolutionary process of doing things better than they were done before.” Ultimately innovation and excellence aren’t about a single breakthrough moment most of the time. Instead success boils down to not losing all of the minor insights along the way.

How Order and Expectation Affect Communities

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For the last month or two I’ve been living on the island of Grenada in the West Indies. It’s been amazing and I love it here. The beaches are wonderful, the local people are wonderfully nice and it feels like a lovely small town everywhere I go.

Earlier this week I attended the annual carnival events. Much like in Rio de Janeiro, they have multiple days of partying culminating in a huge, gaudy parade. Everyone dressed up in elaborate costumes and walked through the main street near the water in St. George. What struck me about the parade was how different it was here in Grenada than parades are back home and how that could be applied to growing communities and companies online.

Most parades that I’ve been to generally have a start time determined before hand. The parade in Grenada did as well, but as we approached the 2pm start nothing seemed to be ready. We walked down and asked one of the parade organizers what was going on and he said that everyone had partied to much the night before and they would start a little later when everyone was ready to go. That was the beginning of the disorder and the beginning of understanding that expectations the crowd had weren’t necessarily the expectations of the parade organizers.

Later, as the parade actually started going, the dancers would dance for about 50-100 feet and then the whole parade would stop for 10 minutes or more before the dancers danced another 50-100 feet. This effect caused the crowd to get a little bit restless and a few tourists started asking the dancers to take pictures with them while they were waiting. Before long, the entire crowd which had been up on the sidewalk on either side of the parade, was down nearly inside of the parade. Lots of people started taking pictures with dancers and then, when the parade was expected to move again, it took a little bit of time to move all the amateur photographers out of the parade line so it could move again. Then the parade would stop and the whole cycle would repeat itself.

If you compare the Grenadian Spice Mas Parade to something like the Rose Parade then you’ll discover stark contrasts. The Rose Parade has dancers that have all choreographed their dances for weeks; Spice Mas had dancers who randomly danced as they walked. The Rose Parade has very distinctive definitions of parade areas and viewing areas; at Spice Mas the distinction was very fuzzy and often broken. The Rose Parade has a strict time schedule with exact orders and expectations from both the organizers and the crowd; at Spice Mas the parade was just another excuse to get together, hang out, dress up and drink.

The differences created a starkly different experience for both the people in the parade and the people watching. In something like the Rose Parade, the performers are there to show off all their hard work to an appreciative crowd. At Spice Mas it appeared the performers were there to show off costumes and hang out with the crowd. The crowd became an active part of the experience at Spice Mas in a way that would never happen at the Rose Parade.

So what does this have to do with order and expectation in business and online communities? The experience that  your users and clients receive needs to be well established because they work with you based on that expectation. If someone attended the Spice Mas parade thinking that they were going to get an experience like the Rose Parade, they would be sorely disappointed. Then again, if someone visited the Rose Parade thinking they were going to have an experience similar to Spice Mas, they too would be very sorely disappointed (and may get kicked out of the event). When you’re building a company or community, you need to understand the type of community you’re dealing with and trying to build. If you are inconsistent, don’t do things on time or with top quality, then don’t expect your clients to be the Rose Parade type. On the other hand, if you have a very tightly run ship with high expectations for everyone inside of your organization, don’t allow people to overrun the experience for everyone else or your Rose Parade will quickly turn into a Spice Mas, deeply affecting the experience of the people who arrived for your consistency and professional experience.

The growth of communities and businesses has more to do with relationships and the way that you interact with your clients than your specific product. There are probably dozens or even hundreds of companies that deliver the same product or service that your company delivers, but people choose to use your company because of the specific feelings and experiences they have with you. If you change those experiences too quickly and too often, people will stop using your company.

Figure out if your company is a collaborative, interactive, sometimes messy affair where your clients are actively involved or if you’re a tightly produced, professional but sometimes aloof company that doesn’t involve your clients as often. Then stick with it, your clients are depending on you.

Controllables

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To me one of the most important things to understand about marketing is that you only control a little piece of the puzzle. There are only a few things that you control when you’re marketing a company. The things you control can be incredibly powerful, but in order to successfully market your company you have to understand the things that you do control.

I’m going to use this article to discuss a few things that I believe you can control in a marketing campaign and a few of the things that I think you can’t control but that people try to control in any case. I’ll start with the uncontrollables and work back to what we can control.

Uncontrollables

Economy

This one is pretty obvious. We can’t control how the economy moves, but we do control how we react to the economy. I remember an article awhile back about a jeweler who doubled his business during the Great Depression. The article was an interview with his son who said something to the effect of ‘My father never focused on the economy and things he couldn’t control. He only focused what he could control in his business and did it the very best he could.’

Competitors

Just about the only way to control your competitors is to buy them out, which isn’t a viable option for most companies. But don’t worry too much about your competitors as without them you most likely wouldn’t have a significant business opportunity. I attended an event awhile back where the CEO of Slacker Radio, a competitor to Pandora, was asked about whether he was worried about Pandora or not. The CEO chuckled and then said “No, I’m not too worried about them. Without good competitors I wouldn’t have a serious business opportunity. You can judge how significant your company can be by how formidable your competitors are. I want strong competitors so I have a chance to get a huge market.”

Prospect Response

This may seem a little bit counter-intuitive coming from a marketer, but frankly we don’t control how our prospects respond. We can control the message, the product, the price and a bunch of other factors, but there is nothing I can do to FORCE clients to purchase my product short of it becoming a governmental mandate. Even in that case, the government often gives people the choice between multiple companies. The key to remember here is that while we cannot control client response, we can change what we control until we get the response we’re looking for. We can optimize response levels, but we have to remember that we cannot control prospect responses. That’s a key, often overlooked distinction. This translates further down the sales pipeline as well, into sales conversion rates and client retention. We cannot control prospects or clients, we can only control how we treat them.

Random Variability

There is a certain amount of luck involved in most companies and opportunities. When a kid puts up a YouTube video that is somehow uncovered by a million people, he got lucky. When a company is started about saving money during boom times and then a recession happens a few months later, they got lucky. When a company sets itself up for a great deal and then the economy turns against everyone involved and it fails. Those are the big examples of random variability, but it shows up everywhere. Sometimes you’ll run an ad and it will get a 3% conversion rate the first month, a 4% the next month a 2% the following month and you’ll wonder why. Often it’s just random variability. You can’t control it, you can only observe and work around it. Enjoy your success when you get lucky and pick yourself up when the tides turn against you.

Controllables

Now that we know what we cannot control, what do we have control over in the marketing sense? Where can we control our destiny?

Product

Since most people start with their product or service first and then find a market for it, this is probably the best place to start. Your product is not only what you choose to sell, but how you choose to sell it. Do you sell it as a package? Do you work hourly or on a fixed fee basis? Do you have monthly contracts or is it a one time purchase? How does your product stack up against your competitors? Do you offer more for less money, a higher quality product, or something they can’t find in other products? You have complete control over how you define your product. This is probably the single most important controllable because without a remarkable product it’s hard to just market your company to success.

Target Market

My definition of a target market includes the industry, geography and demographic factors of your prime prospects. I believe that you can , to a certain extent, choose who you focus on at first. After you’ve focused on that market for awhile though, the market becomes more important than the individual products or services you render. You start to create a brand and reputation inside of that market which allows you to introduce new products. Also, you understanding of the market then allows you to understand what services are needed better than your competitors who don’t focus specifically on your demographic targets. Who, when and where are your targets?

Medium

Once you’ve defined your product and your target market, you have to figure out what medium will give you the most effective connection with your prospects. If you’re targeting AARP members, YouTube or Twitter marketing may not be ideal. But if you’re targeting a 25-40 year old audience then you could potentially have great success, much like Old Spice did recently. Find the right place to connect with your audience or you’ll waste a lot of time and money.

Advertisement Itself

While we already noted that you can’t control your prospect’s response to your ads, you can control your ads themselves. You can continue to change and modify your advertisements until you get an ad where your prospects turn into clients at a rate you’re comfortable with. A quote that I’ve remembered for quite awhile is “The quality of your communication is measured by the response you get, not by the words you say.”

Others

While the above are the major things you can control, the following also have significant contribution to your marketing effectiveness:

  • Testing
  • Consistency
  • Ad Spending
  • Method of Sale
  • Follow up System
  • etc

If you spend your time focused on what you can control rather than what you can’t control you’ll find that you become more and more effective selling your product. Then what you can’t control doesn’t matter so much.

All credit for the photo goes to geminidustin.

Creating a Community

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When companies are formed it’s usually around some idea, small skill or gap in the marketplace. A product or service is born and then the owners go looking for clients. The choice for where to focus on finding clients becomes a very critical one. It’s a question that has become more and more complex as our society has grown and our advertising methods have become so varied. For most companies the choice is between marketing as broadly as possible, to anyone who will buy the product or service, or marketing to a very tight select group that meets the criteria for best fit of the company.  From my experience most companies take anyone who will buy their product when really they should focus their time on building, joining or cultivating a community of people who fit their products or services perfectly.

In order to explain my belief that a very tight, targeted market is better than selling to anyone who comes by, I’ll explain why I think marketing is so different today than it was a few hundred years ago. If you consider the way that most businesses started in the past it was from deciding to grow something, making it into a product, then going to a local market to sell your product. Your market was very well defined as the people in your town so your products were aimed exactly at that market. If you were good, word spread through town and before you knew it your booth had a line and people milling about. If you were bad at making your product you quickly went out of business or tried selling something else. In either case there was no way to avoid your built in market, the small village or town where you lived.

As towns grew, the number of markets also grew. People started opening stores that served different parts of the town. Everyone in town no longer visited the same markets and same areas so when someone new showed up many times they wouldn’t even know. That’s when advertising started. People made posters advertising their products around town. Signs hung in front of shops and pubs advertising their products to anyone who passed by. In the now larger towns, some people could get away with having an inferior product as long as they kept moving through town without stopping too long. Some people even moved from town to town after scamming people out of their money. But if you sold a product like bread in your local market, your clients were still the people around you and they still talked. Advertising only opened up new markets a little further away.

If we fast forward to today, there is an incredible mix of advertising and marketing available to companies. You can use television ads or yellow pages, you can market to people next door or people in Europe or China via the internet. The choice is the same as it was as soon as cities got big enough to have advertising: do you target a community or do you advertise to everyone and hope a few come by?

To me the most powerful force for a business is to create or tap into a community. Recreate the dynamics of the small local market. Find and work with people who talk to each other and let them advertise your brand for you. The internet has made advertising so seductive these days that many people forget that for most companies the majority of your clients will be local or part of a very tight community. If your car breaks down are you more likely to use the guy who goes to church with you or someone out of the phone book? Are you more likely to use your neighbor the plummer or someone you saw on a billboard?

People tend to trust people they know. They understand what they’re going to get and feel comfortable with the idea that the person won’t treat them badly. When you know someone before you need them then their reputation is riding on the line in a way that’s different from someone you meet who sells you a service or product once. And, if you meet someone inside of a tight community, their reputation in that community is riding on how they treat you. Again a much very different interaction then a mostly random, anonymous transaction with someone you just met.

When you’re setting up the marketing for your company, figure out if you’re a local company or a distance independent company. Then figure out what the demographics are of the people who like your products. Once you have that figured out, just become an integral part of the community in which you’re a best fit. Present, speak, write, comment, make friends, make enemies, challenge the known authorities, and build a following of people who know who you are. Let them talk to each other about you. And then enjoy your success.

Photo courtesy of NatalieMaynor