I’ll be giving another Executive MBA class this week in Paris, which is an activity that I fairly enjoy — and if I may say so, my students too. Such three-day classes are usually very educative for me. They always keep me in touch with what most professionals still find difficult to grasp in the logic of launching innovative businesses and sustaining them later on.
Having three days together is a real luxury, even by the current standards of executive seminars that we run directly in the industry. During this length of time, we do have many opportunities to dissect what is the standard business logic and try to rewrite it very extensively in some cases.
One of the top needs in rewriting how executives think about business has always been for me about marketing. And there are many reasons why; starting with the cold and harsh fact that most marketing strategies are abysmally bad. I’m not even saying they could be improved. They are not worth sh*t.
But, let’s go back first at how you describe a business.
As far as I’m concerned, it involves making the case of connecting a market problem to clear added value brought by a product (let people still living in 1930 try to differentiate products, from services and get funky with “experiences,” no one in the real world cares for anymore). You may want to explain a business in different ways, but however you do it, your business is not your product. Far from it, the product is only a feature of your business. So in that case, the first thing you may want to do, is unlearn everything you know about the marketing mix –also known as the infamous 4P (product, price, promotion, and placement).
It doesn’t mean that these four pieces of information that generations of poorly trained marketers have been relying on like lab rats addicted to crack, are not sometimes meaningful. It means that they describe at best 20% of your business logic. Focusing your communication through this lens is willingly letting go of any real chance to be understood… or just a fundamental and dangerous lack of understanding of what business is all about.
Of course, we shouldn’t discount that many businesses are not real businesses. They are organization building products and from there, hoping for the best. In that case, it is true that they only have the specs of the product to sell. Which, understanding that it might be a tad short, are further plastered with vague lifestyle claims, and further enforced by half-naked barely nubile women languorously hugging said product. In the end, they’ll have intense brainstorming on what their brand is really all about and emerge with confusing (but always grandiose) claims.
So how do you recognize real businesses trying to actively engage their market?
Well, they might talk about their product. They would certainly speak about the price (we will go back to that in a moment, and see how you should be wary when the price is not clearly disclosed). But the real give-away of focused companies is that they rely on opposable marketing.
‘Opposable’ or opposability as a principle, means that you should be able to take a marketing claim and find an opposite one that still makes sense.
If this is not possible, the claim is not opposable and is a turd.
At the question: Why should we (as customers) buy your product? You may want to answer something like:
Well, because we have one of the best quality at competitive price, and we also spent a lot of time making our product extremely simple and easy to use, while making it super-safe and fun.
Does this ring a bell? Sure it does. But out of curiosity, who is saying the opposite of that?
We have one of the crappiest product available on the market and yet we will ask you an absurd amount of money for it. We also don’t really care on how you’re going to use it, or to be honest if it’s going to be dangerous or not, but hey, good luck in any case.
The second claim sounds really stupid, doesn’t it? It’s because it is. And if it is, then the first claim is also. No one is not making good value, simple, easy to use, innovative, safe, fun, quality, etc. So why would you jump on this wagon and try to say it louder than the rest of the competition?
Dozens of books have been written about white space strategy, blue ocean, six paths, strategic horizons, five forces, value chain analysis, etc. Sure, why not. If you have the time (or particularly love the Cirque du Soleil). Being super-smart and all, I would offer a breakthrough and radical solution. A solution that seems to have escaped the scrutiny of thousands of highly educated professionals performing academic business research for a living:
Why not let your potential customers just know what you want to do for them? (Told you, breakthrough business research.)
One of the example that I still love to use with my MBA students is Nest vs. Honeywell thermometers.
(1) Honeywell is non-opposable. This is a product (simple, smart, next-gen, no learning curve, comfort, …).
(2) Nest is opposable. It immediately gives away its added value, how it solves a very specific market problem:
It’s probably time to wake-up: you don’t have to sell your product blindly.
The screen resolution of the Nest thermostat, its interface, the number of sensors involved, are all interesting to some point. But they are not decisive in understanding as directly as possible, what the point of this thermostat is. And the fact that it’s a thermostat is of secondary importance when it does actually compete with roof insulation materials, double glazing, solar panels and other products that aim for the same added value.
So, why not give your market a chance to understand what you do? Being opposable is a good start at being serious about marketing, and strategy, and technology roadmap, and talent management, and finance…
Which circles back to pricing. How do you price a product? Here again, you can get rid of millions of man-hours trying to frame an answer, and just fall back to three quintessential answers:
- Make it as less expensive as possible when this is your only advantage (apply the 4P, then commoditize yourself, race to zero, and disappear as soon as possible).
- Make it as expensive as possible, betting on the fact that posing as premium will fool part of the market to buy (and you’d be right, enjoy while it lasts for a few months).
- Transfer ROI to your market and keep a part of it (which is your price –I aim for 30% as a rule of thumb, but you don’t have to listen to me on absolutely everything right?)
How much was a Nest thermostat worth in 2011? About USD 500. Why? Because it would allow USD 1,200 to 3,000 average savings for a typical American family over three years.
Which also means that the Nest thermostat was marketed as a means to an end. A product solving a crystal market problem: lack of insulation in US housing + extensive reliance on air conditioning in winter and summer (because of historical cheap energy) + sharp decrease of purchasing power in the middle-class thanks to 2008 crisis + increase in energy costs.
If your company does something remarkable for the market, there is no need to obfuscate it with marketing mix mumbo-jumbo or product segmentation fine-tuning. State your added value. Connect it to the key demographics. Sell it.
Congratulations, you’re done.
In the end, successful companies don’t sell products. They sell their added value. This is for MBAs an easy lesson to understand, but a very difficult one to fully accept and internalize.
And now that I’m done ranting, you’d probably expect a more recent example to part with. You’d probably even expect the latest ad campaign from Apple, Tesla or any other company that is not just selling products and hoping for the best.
So yes, let’s do this:
But you might adjust your expectations about Apple when I tell you that Samsung has given us the most focused and solid example of opposable marketing in the recent months (years?). This video was shot with Casey NEISTAT a rock-star YouTuber, and was aired yesterday during the last Academy Awards ceremony (while I was finishing the article):
Enjoy and learn something much more powerful then anything I could ever write:
Let’s pause and slowly clap (and hope that Samsung will deliver).
[ EDIT – Jan. 2020 ] Of course they didn’t, they went back to selling features and folding screens.