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19 posts from January 2008

January 15, 2008

Word of mouth marketing, Tex Mex and crack cocaine

Mannamexico Every Thursday and Friday the Mexican van rocks up, parks about 100 yards from Red Gate and opens its shutters. Just about everything they do is perfect. They serve fresh, tasty food. They have a metronomic process. Mannamexico's owner, Luis, remembers everybody's name (he must know hundreds). They have a loyalty card, and loyal customers. They're the first food van in Cambridge to get a 5* health and safety rating. They restrict supply (they're only there two days a week) to stimulate demand. Their customers rave about them. There's even a Mannamexico appreciation society on Facebook (249 members and growing).The only negative thing about Mannamexico is the line of people outside. If you're ever in Cambridge you should visit the van, or the eatery they just opened in Regent Street.

Do you see what Mannamexico have just done? They've just flawlessly executed a piece of word of mouth marketing. I've just written what I hope is a glowing testimonial and hopefully drummed up some custom for them. What Mannamexico have not done is explicitly exhort me, or their other customers, to tell people about them. There's no 'tell a friend' button on their web site. They've provided an excellent product and the only marketing they've done, as far as I can tell, is to park a big, brightly painted, red and yellow van on the road where we work.

Word of mouth marketing is something that marketing folk love. When a friend or a colleague tells you about a product you're more likely to try it out than if you read, say, a print advert. Getting people to recommend your product to people who trust them is arguably the best form of marketing there is. However, although word of mouth marketing is indeed a worthy goal, it's not obvious how you get it.

Word of mouth is a bit like happiness. It's something you arrive at indirectly. If you try to get long-term happiness by doing things that make you short-term happy then you will fail. You can eat chocolate cake or take crack cocaine but you won't achieve sustained happiness. Happiness is a by-product that you'll most likely achieve as a side-effect of something else, like dedicating your life to a cause greater than yourself, getting married, buying a dog, having happy parents or not being born in Scotland.

Similarly, the way to get word of mouth marketing is not to spend your time and money directly trying to persuade your customers to tell their friends. The best way to get somebody to do something is to make them want to do it. You need to make your customers unstoppable proselytizers of your product and service. The obvious first step to do that is to make your product and your service something which people are able to proselytize about.

Of course, even an excellent product will not sell or market itself. You still need to work hard to get your product into people's hands. You'll need to do Google adwords / run print ads / tape posters to lampposts / whatever works for you. You'll need to nurture your best customers and make them love you.

But what you shouldn't do is focus on word of mouth marketing as a direct goal. Do everything else right and it will follow.

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January 11, 2008

Baby marketing turtles

Turtle In 1978, marine biologists from Mexico and the USA joined forces to try to save the rapidly declining turtle population. They incubated turtle eggs and raised the hatchlings for 10 months. They then tried to imprint them with their current location, tagged them and then released them into the wild. If the imprinting succeeded then the baby turtles would behave like ones born in the wild. They would return some point later to form nests at their birthplace, to breed, to lay eggs in the sand and to start the cycle anew.

No turtles returned in 1979 so they tagged and released some more turtles. In 1980 there will still no new turtles or nests, so they released yet more turtles. By 1988 they had released more than 22,000 turtles into the wild. None had returned. They experiment was stopped, and the attempt to replenish the turtle population had clearly failed.

Then, in April 1996, a turtle nest appeared on the Texas coast. Five more were laid between 26th May and 5th June. New nests have been discovered since. Almost 20 years after the start of the experiment it had started to show results. It turns out that turtles don't return to their birthplaces until after some 20 years, often having travelled thousands of miles.

You often find the same thing in marketing. You release your baby marketing turtles into the wild and wait for them to return. Nothing happens, so you release some more. Still nothing happens so you release yet more. Eventually, you think you've failed. Then after more time than you could possibly have anticipated, your marketing turtles return to nest.

Marketing is about sustained, hard work. If you run print ads, you need to run them over months. If you do local marketing, you'll need to advertise in multiple places for a long time. It's not about spending all your market budget in one big print full-spread or in a single superbowl advert.

So, release your marketing turtles again, again and again and be patient.

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Business of software speakers

I'm thinking about organizing Business of Software 2008. It's still just a twinkle in my eye. I'd like to know who you'd like to hear speak / who you've heard in the past who was excellent. The only criteria are:

  • Relevant to the business of software, even tenuously
  • Interesting

They don't have to be speakers who we could ever net (see my list below ...), but they don't have to be well known either.

My personal list so far includes:

  • Seth Godin
  • Edward Tufte
  • Steve Ballmer
  • Larry Ellision
  • Steve Jobs
  • Shai Agassi
  • Vint Cerf
  • Dan Pink
  • Chip Heath
  • Donald Norman
  • Alan Cooper
  • Jakob Nielsen
  • Robert X Cringely
  • Richard Stallman

Comments on my speakers? Who would you like to hear? Post here.

P.S. Subscribe to this feed to keep informed about the conference.

January 10, 2008

Business of software facebook group

A quick reminder that there's a Business of Software facebook group. It's now an open group so anybody can join. It's one of the mechanisms I'll be using to tell people about BoS 2008 so if e-mail and RSS feeds are inconvenient or just too old fashioned for you then please join the group.

January 08, 2008

The pirate's dilemma - the book

Matt Mason's book on "The Pirate's Dilemma" is now out. I was lucky enough to get hold of a preview copy of this a few months ago, and to talk (very briefly) to Matt after his presentation at Business of Software 2007. At the time, I thought Matt was onto something very big. I now know he is.

His is one of those big ideas that just clicks. Matt's premise is that pirates perform society a valuable service. They show where the marketplace is broken. Pirate radio DJs were the bellwethers that created the path for commercial radio in the UK. File sharing and online music pirates opened up the way for iTunes. Matt puts it better himself in this blog post about other people's property.

You should buy Matt's book.

January 05, 2008

Eric Sink on Marketing for Geeks

Eric Sink, founder of SourceGear, was one of the speakers at Business of Software 2007. Here he talks about why he founded SourceGear, marketing for geeks and other topics. His talk went down extremely well out with conference attendees, with 85% ranking his talk 4 or 5 stars.

Steve Johnson on why software is not a business

Steve Johnson of Pragmatic Marketing won last year's Software Idol competition at Business of Software 2007. In this video of his winning talk, Steve rails against CEOs, marketers, CFOs, engineers and just about everybody else in the software industry. It's entertaining and thought-provoking.

January 04, 2008

Can an airline exec manage a software company?

An announcement before the holidays captured my attention: Red Hat named Jim Whitehurst, formerly COO of Delta Airlines, as its new CEO.  Maybe too hastily, I had a flashback to John Sculley's disastrous tenure at Apple.

Whitehurst did some great things in pulling Delta out of bankruptcy and infusing employees with much-needed company spirit.  He is more than casually knowledgeable about open source and has definitely turned around opinions of people who've spoken to him.

But even if he is a self-proclaimed geek, does he have the background to succeed at Red Hat?  Are the company's challenges in the near future operational or market- and technology-oriented? Do software companies need leaders who have a software background?

I'd like to hear opinions from the source -- people in the business of software.

My other blog ...

My day job is as co-founder and joint CEO of Red Gate Software. I've just been set up with a blog on the Red Gate blogs site too. In the future, I'll post more Red Gate related content to the Red Gate site and more general stuff here. I'll link between the two.

My first Red Gate blog post this year is a product-centric round-up of what we got up to last year, and what you can expect next.

If you're interested, many other Red Gate people have blogs too.

About Business of Software

THE conference for people who care about growing long-term, profitable, software businesses. Follow us on Twitter. BoS Blog.

About Neil Davidson

Joint CEO of Red Gate Software and Founder of the Business of Software conference. Follow him on Twitter. Neil's Blog.

About Mark Littlewood

Founder of the Business Leaders Network (TheBLN). Organizer of the Business of Software conference. Follow him on Twitter. Mark's Blog.

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