Marketing Lessons from Interface Development

While in university, I took a course in User Interface development for writing software. One of the books that I read for course, from the suggested reading list, was The Design of Everyday Things by Donald Norman. In it, he discusses how, when designing anything to be used by someone else, you need to put yourself in their place, to see the object from the perspective of the user.

Marketing is no different.

If you want to send a message to potential buyers, you need to envision yourself as a buyer. Not as your ideal buyer, nor as a theoretical buyer. You need to envision yourself as a real buyer.

What’s a real buyer?

A real buyer is anyone who might actually buy your product or service. However, rather than use an abstract example, you need to use concrete examples of such people.

For example, if you’re trying to sell a service that helps people publish in magazines, a theoretical buyer is an advertiser in that magazine, or an article writer who has articles regularly published in Magazine Y.

A real buyer, however, is Susan Smith, owner of a local flower boutique who advertises her store in a community newspaper, published once a week. She’s already paying $125 per publication, but her graphics are done herself, and look cheap.

Another real buyer is Jake Johnson, who recently graduated from a journalism program, and is writing a monthly feature in Small Town magazine. He dreams of getting picked up by The National Post, and wants to bring attention to his writing.

Both of these buyers are real people, although they are different from one another. However, when thinking of a marketing strategy, you need to look at the needs of real buyers.

Susan is not trying to make it big, but to remind people in her neighborhood that her store is around the corner, and what her weekly specials are. However, she might be interested in spending a couple hours cleaning up her ads so that she can look a little more professional.

Jake, however, is trying to move to larger magazines and newspapers. He may want someone to give him a comparison of writing styles from different magazines, or to help him adapt some of his articles to send in to large journals. On the other hand, he may appreciate having his own editor to give his writing an extra boost.

A good marketing plan would deal with these two buyers separately, since their needs are different. Trying to sell to both at the same time could easily lose both customers – approaching each on their own could easily gain two customers.

That’s not to say that every potential clients needs their own marketing plan. While that would work well for very small businesses, it’s difficult to scale. However, customers and clients need to be converted into small groups for the purposes of marketing, where the needs of every member of that group are being identified in the overall marketing plan for that group.

Setting Yourself Free

This post is inspired by the fact that tonight is the first night of Passover, when Jews commemorate the exodus from Egypt approximately 3500 years ago.

The story of the exodus describes an enslaved nation leaving their oppressors, and founding a religion shortly thereafter. Having worked as slaves for hundreds of years, the nation leaves the country, and accepts upon themselves the various commandments God gives them.

This is, perhaps, a difficult concept to understand. Having lived under the control of their Egyptian masters for hundreds of years, it is surprising that they would then choose to accept another master shortly after.

However, there is a fundamental difference between the two masters, and this has applications in everything people do.

In Egypt, the Jews did not choose their masters, but were born into slavery. (Granted, at an earlier time that choice was made, but it was not made by anyone in the generation of the exodus.) Therefore, regardless of the conditions, the fact that they had no choice in the matter made it all the harder to bear.

Once they were out of Egypt, however, and could choose their own destiny, they chose to obey God and the commandments. Since they made the choice willingly, it did not appear to be a form of slavery or suppression.

Life is like this in general.

If you dictate an action or behavior to someone, they will often resent it, regardless of whether or not the action is reasonable, or if they would have done it anyhow.

On the other hand, if you give people a choice, you will often see that they will opt for the more difficult or challenging path, and yet, enjoy the journey. Since they were able to choose, it doesn’t seem as difficult.

When possible, give people around you the ability to make choices. Not only do you demonstrate that you trust them to make wise choices, but you will also find that people go along with you more easily when they have a say in the matter.

As another example of this, think of how you get children to perform a particular task. You can order them to do the task, and expend significant amounts of energy trying to force the point. Or you can give them a choice, and let them live with the decision, and more often than not, achieving the same end result without the emotional investment.

Which way do you think is better?

The Road to Success is Always Under Construction

There is a saying that I had painted on a coffee mug:

The road to success is always under construction.

I used this mug during the end of high school and the five years I spent at university, which is appropriate, considering that education is often considered to be key to success. Granted that achieving success depends heavily on how you define success itself, but in almost every sense, education, formal or otherwise, will play a key role.

The reason this came to mind now is that I’ve recently been looking to expand my educational background, and have been hard put to decide what continuing education I want to pursue. I’ve been out of university for almost 4 years now, and have had limited formal education in the meantime.

However, those who will succeed will always be learning:

Who is wise? One who learns from every person.

Over the last four years, while I have not been learning in the classroom, I have been exposed to learning opportunities elsewhere – at home, online, at the office. I have tried to further my knowledge at every turn.

If you, like me, are looking to succeed, then you need to continue to learn every day. You need to somehow further your knowledge and understanding on a regular basis. This might mean taking a course, but it could also mean reading the newspaper every day (and not just the comics). You could read a selection of blog articles.

Personally, I’ve delayed making the decision to go back to school yet again. However, in the interim, I’m working to build a solid foundation for various concepts I’ve been exposed to, but never formally taught. Small and medium-sized businesses are comprised of a few functions, and I’ve taken it upon myself to learn the fundamentals of each section:

  • Marketing and Advertising
  • Sales
  • Inventory Management
  • Bookkeeping and Accounting
  • Legalities
  • Hiring and Payroll
  • Banking and Loans
  • Project Management
  • Product Research and Development

Naturally, this list is far from complete, and not everything in this list applies to every business. At the same time, I have a basic understanding of many of these concepts already. However, the aim is to increase that understanding by self-study, reading a selection of books on these topics, talking to people, and reading articles online.

Over the next few weeks, I’ll be collating some of the readings that I’m doing in a resource section on this site. If you have some suggestions for other subjects that may be relevant, I would love to hear them.

Art of Negotiation

In any environment with more than one person, there will always arise a situation in which the two people disagree. It could be as mundane as where to order lunch from, or as serious as whether or not to go forward with a billion dollar deal. Bring two people together, and a conflict will arise.

One of the questions often asked by new business owners is how to resolve such conflicts without creating a rift between the parties involved. The best time to look for the answer to this question is well before the situation arises, since many of the techniques used for resolving conflict are more difficult to apply once the situation has been muddied. As such, I will discuss here some basics for dealing with such scenarios, and would recommend that you look for a seminar for some further suggestions if you anticipate being involved in such scenarios often, or know that you have a hard time dealing with conflict.

The first piece of advice actually comes from the readings I did prior to getting married, and was stated very simply:

Always remember, especially when disagreeing, that you’re on the same side.

We have a tendency, when disagreeing with someone, to move into the mindset of you versus me. In marriage, and in business, it doesn’t work that way. All the people involved have the same goal, which is, to make the marriage or business succeed. The disagreement is about the means to getting that success, not about the success itself.

This brings us to the next point – stay on topic, and don’t get personal.

When a conflict moves off the original topic of discussion, and heads into the jungle of personal attacks, a pleasant ending rarely ensues, and it makes future conflicts more difficult to deal with. If you’re trying to reach a decision, you need to focus on what’s relevant to the issue, and the fact that John barely passed his accounting course isn’t relevant to whether or not the company can afford a particular expenditure today.

After the particular issue is resolved, if warranted, the background and side issues can be discussed. However, they have no place in resolving another conflict, and only serve to sidetrack you from the main issues.

The last point is possibly the most useful, but also, unfortunately, the most vague. To prepare for a potential future conflict, prepare a process to resolve a conflict.

Basically, if you head into a discussion knowing how you’re going to resolve it, then it makes the discussion that much more productive. Remember, we’re discussing resolving conflict with a particular other person, not with people in general.

One idea you might want to try works like this:

Agree beforehand who is considered to be the expert on a given set of subjects. For example, if you have a software business with two partners, one who handles marketing and advertising, the other handling development, you could easily split out technology issues and publicity issues.

Agree on an approach and guidelines for discussing issues. For example, you might agree that both parties get a chance to present their opinion, and then a chance to respond to the other persons opinion, with the length of the discussion agreed to at the beginning of the discussion.

At the end of the allotted time, if the subject is considered to fall under the expertise of one party exclusively, then they get to make that decision. If it is not an issue with which one party in particular is considered expert, then you take turns deciding.

Hopefully, with this information in mind, you can head into your next conflict knowing that you have the ability to resolve it amicably and smoothly, and move on to making your venture a success.

Pouring the Foundation

Perhaps the most important decision you will make in a business is when you bring in the second person, either as a partner or as an investor. Done correctly, and your business will flourish; make a mistake, and the repercussions can haunt you for years.

Unfortunately, this fact is often ignored when selecting partners or investors. Quite understandable, when you consider that what’s being evaluated is the skills being offered or the amount of money versus equity being bartered. However, what is often overlooked is that few people have truly unique skills (although they may be unique in the particular combination, or availability) and that money is cheap.

Partners

There are a few reasons to have a partner in any business:

  • No one person has all the skills necessary to run a successful business, but with two people, you can get a lot closer to having all the needed skills
  • A partner can act as a sounding board for new ideas, and save you from chasing after non-profitable ideas while the money-maker is ignored

For the first point, you can solve this issue by hiring someone with the required skills. This on its own is not actually worth any equity in your business. (Note, you might give up equity instead of paying someone if you don’t have any money invested in the business which can be used to pay someone.)

The second point, however, is why you give up some ownership in the company. The partner is going to help you achieve success in your business. For that, you want someone who has a vested interest in your company, but also, you want someone you can work well with.

Investors

Like a partner, an investor, especially in the early stages of the business, brings more than just money to the table:

  • Cash, of course, is the reason you go looking for an investor
  • Experience is what comes along, with your investor becoming either a member of the board, or at least an adviser to your business

As I mentioned above, cash is cheap. If you have an okay credit rating, you can get a loan from the bank, not giving up any equity, but paying some interest instead. Alternatively, you can borrow money from family and friends to help get your business off the ground. For cash alone, there is little reason to give up any equity in your business.

Experience is different. A good investor will have experience running a company, and want to help you succeed. Of course, they’re also looking for a return on their investment, but a good angel will want to be involved, and you’ll want to listen to them. (That’s not to say that you will DO everything they suggest, but you should listen.)

Summary

As described, both founders and investors are there to provide suggestions and opinions. This being the case, you should be sure that the people you bring into your company are people you can work with. You need to be able to listen to them, and you need to be able to get along with them on a personal level.

If you do, you’ll find yourself with the advice and support that will help your business succeed.

Finding the Right Price

I had 3 discussions last week with different types of people regarding appropriate fees, and came up with 1 conclusion.

You’re not charging enough.

The logic works as follows:

You want to earn $100,000 per year.

You think you can get 1000 billable hours.

Your hourly rate is therefore $100.

If you actually try charging $100 per hour, you’ll find that you’re overcharging for some work (basic PHP programming is not worth more than about $50 or $60 per hour), and undercharging for other work (needs analysis and process refinements and automation can easily be billed at $200 per hour or more).

If you try to average the fees and charge something in the middle, you’ll end up with the following situation:

People who need PHP programming don’t hire you because you charge too much for that.

People who need process refinements and automation also don’t hire you, because you charge too little.

What, someone won’t hire you because you charge too little?

But that’s exactly the problem. If you do work that other people charge two or three times your rate, then clients think they’re not getting the same quality from you as from your competitors. So they don’t hire you, not because they can’t afford you, but because they think you’re not as good at your job as your competition is.

The solution, of course, is to raise your rates. The catch, however, is that you won’t get people hiring you for the basic work, which you may need to reach your income requirements. So you do what I’ve just done – you split your fees.

Split fees

When you split your fees, you need to be careful not to give a quote too early in the process. The way I do it is by starting at my higher fee, and then working my way down. If a client wants to hire me by the hour, it will be pretty expensive, because the only fee I’ll quote up front is my higher rate.

When I look at the work, though, I have 2 fees – one for the work that the client is contacting me for, and one for the work that anyone could do, but it will probably be me. For example, if a client needs to determine how to automate a particular task, they come to me to figure out how to automate it. I will likely also be implementing that, but really, once they know the solution, they can hire a programmer for a fraction of my price to do that work.

To get that work as well, I offer to arrange for the implementation, and pass on the savings to the client. I may outsource the work, or I may do it myself. In any case, the price quoted will be competitive for the work being done. In the previous example, if the work could be done by a programmer charging $35 per hour, I’ll bill it at $40-$50 per hour. Whether or not I actually subcontract it depends on the type of work and whether or not I have time to do it myself.

From the client’s perspective, they’re only paying the premium rate for the specialty work I do. Using me as a go-between to various contractors helps ensure that the job is done properly, and they know that if my contractor makes a mistake, I’ll make sure it gets fixed.

Pricing is something that’s very difficult to get perfect – don’t charge enough, and you’ll need to work more to earn enough, charge too much, and you won’t be able to get clients. But if you can strike the right balance, you’ll have it made.

Lessons from Aircraft Carriers

If you watch a movie involving aircraft carriers, you may have noticed this. On the carrier, the crew are wearing different colored jackets. Some of the crew are wearing blue, others yellow, others gray. Watching more closely, you’ll notice that each crew member interacts almost exclusively with other crew members wearing the same colored jacket as himself.

Each crew member has a given piece of responsibility. She must trust the rest of the crew to do their jobs properly, just as they must trust her to do her job properly. Somewhere further up in the hierarchy, there’s one person in charge, who knows what each person is doing. On the deck, however, each person has tunnel vision, focused on their own tasks, and trusting that other people are doing their tasks.

A business is like this too. At the top of the chain is one person who knows what’s happening in the company. Smaller tasks get delegated down the chain, until they end up in the hands of the person who is going to do the work. Each worker must focus on their own tasks, and trust the people around them to do their tasks.

What should you not be doing? Unless you’re the person at the top, you shouldn’t be trying to oversee every piece of work being done around you. While there are certainly many successful people who do manage every aspect of their businesses, it does not foster strong businesses.

That’s not to say you should turn a blind eye to what’s happening in your business. But if you give someone a task, to some extent, you need to trust them to do their job, while they trust you to do yours.

Five Stories – One Lesson

The finale for Season 5 of Dragons’ Den was devoted to the 5 constant figures in the Den, the five Dragons. The show was titled Path to Riches and went through the story of how each Dragon reached their current success.

What was especially fascinating about the show was that while discussing 5 unique stories, they all contained a single common lesson.

  • All five Dragons came from modest roots.
  • All five Dragons worked hard to get to their current positions.
  • All five Dragons had to rely on themselves.

Brett Wilson talked about his roots with family, how at one point, he let his family take second place to financial success, and learned the hard way why a person shouldn’t do that.

Arlene Dickinson talked about her roots of growing up in poverty, being a single mom with 4 children, with no formal education or training. She earned her way to the top of Venture Communications.

Jim Treliving and Kevin O’Leary both talked about the downside to working for someone else, not being in control of your own destiny.

Robert Herjavec talked about family values, and how you don’t get a free ride in life.

If you’re planning on pitching your business to the Dragons, you should really watch this episode. If you wonder why the Dragons act the way they do, the answers are all here. The key points, though, are that:

  • You have to believe in what you’re doing
  • You have to have worked hard to get to where you are
  • You have to know what your business is about

Besides that, you also need to know the following, which will help you get closer to a deal:

  • What is your company’s current financial condition (get out that balance sheet)?
  • What were your revenues in the past?
  • What are your projected revenues, and how did you figure that out?
  • Who would buy your product?
  • Who are you competing with?
  • Why does anyone care about your product (this goes back to the first point in the previous list – you have to believe in what you’re doing)?