Gartner has predicted CMOs will soon spend more on IT than their CIO counterparts. In a recent CMO Magazine article, Brian Fetherstonaugh Chairman and CEO of OgilvyOne Worldwide, predicted the emergence of a new type of c-suite executive to meet this challenge: The chief marketing technology officer (CMTO) also known as the chief marketing technologist. Similarly, McKinsey advocated the creation of a new position—marketing technology officer (MTO).

If these predictions are correct because it will be much easier to identify and pitch to these marketing-tech hybrid people. It is not always easy to sell technology to marketers today. In working with marketers over the past several years, I’ve seen a significant variability in marketing department’s approach to buying and implementing software. My assessment is that software buying sophistication is evolving at different rates across companies. If you are selling to marketers there is no one-size-fits-all pitch or selling process.

In my experience, there are at least three types of marketers:

1. Tech-savvy marketers with good access to a tech team
2. Tech-savvy marketers without good access to a tech team
3. Marketers pretending to be tech-savvy

Recognizing the type of marketer you are dealing with is key to success. The type one marketers are essentially the hybrid that has been predicted. It is great to sell to these folks. They understand both the benefits and the costs of implementing new software and they have the resources to get projects done. The only caution with this type of buyer is to adjust your pitch to their level of sophistication. If you have followed the general advice of “talk to marketing different than you talk to IT” you may have deleted or over-simplified critical pieces of your presentation. If you over-simplify, a type one marketer will be insulted because you are talking down to them. If you leave out too much implementation information they may wonder if you really understand your own technology or are being honest about what it takes to get it up and running. You may also miss out on the opportunity to sell a technical differentiator. If your software is faster or more reliable, explaining how and why will impress a type one marketer.

How to identify a type one marketer? Ask them questions about the software they are currently using. These questions can help you understand how your product will fit within their infrastructure and assess their level of sophistication. Questions should be appropriate to your product, but questions like, “How many custom objects have you created in your CRM system?” will give you a good sense of their understanding. The other critical piece of the puzzle is determining if they have the resources to implement your product (and thus generate value, stickiness and follow-on opportunities). To assess their access to the right technical resources, build a discussion with IT into your sales process. If your marketer can’t bring the right technical resources to a phone call, they may not be able to procure their services to get your product working. Alternatively, create a questionnaire that requires technical knowledge of the key infrastructure elements important to your product. If you get complete answers quickly, you are in luck, if not you may be dealing with a type two marketer.

A type two marketer is tech savvy but their company has not yet structured the organization to allow marketing to get technology projects done quickly. Dealing with a type two buyer means you will have two sales to make, one to marketing and one to IT. You may be able to get the deal done without talking to IT and this will be tempting, however, it can lead to problems down the road. In the worst case your solution never gets implemented and your customer churns. Other problems can include long delays that prevent follow-on sales opportunities and/or higher costs of implementation caused by your lack of knowledge of their infrastructure. To avoid these problems make sure you can talk with the right technical resources and get their buy-in. This takes extra effort and may lengthen the sales process, but it pays huge dividends over the long term.

Type three marketers are the biggest challenge. They are hard to recognize initially because almost all marketers know they should be tech-savvy so they will all “market” themselves as such. Your questions about the software they are using will provide the necessary insight. If you are dealing with a type three, a simplified pitch is critical. Too much technical detail will be confusing and make your product seem too complicated. A type three marketer may or may not have access to a tech team. In either case, you’ll want to pitch to the tech folks separately.

Eventually, calling on the CMTO may make selling technology to marketers easy, until then you need multiple presentations and multiple sales processes to appropriately communicate with different types of marketers. In summary…

Ask questions to determine to identify your prospect’s type and make the right pitch:

• Type one – Tech savvy with IT resources, A sophisticated pitch that includes technical differentiators and implementation description.
• Type two – Tech savvy without IT resources, A two pronged approach, one for the marketer and one for IT.
• Type three – Not tech savvy, A simplified pitch to the marketer, a separate pitch to IT.

Links to the articles referenced above:

http://www.cmo.com.au/article/569657/chief-marketer-2016/

http://www.mckinsey.com/insights/marketing_sales/the_dawn_of_marketings_new_golden_age

I mentor for one of the entrepreneurship courses at University of Michigan’s Ross School of Business.  This is one of the ways that I give back to our educational community and it keeps me in touch with what is happening on campus.  Some things I’ve heard really intelligent students say:

“I quit using Facebook, it is a dead platform”

“I’d never play those lame Facebook games, they need to get more sophisticated”

“Companies are killing Facebook, I don’t want brands on my social network”

These students all had “Facebook killer” business ideas that were in part based on these beliefs.  They’ve all heard the advice, ”Start a business that meets a need you feel personally.”  Too often, they interpret this advice as, “base all design and marketing decisions on what I think.”

I learned this lesson when I was in business school and met some alums who were revolutionizing the toy business with a company called eToys.  According to the founders, eToys was going to take over the toy business.  ”Toy ‘R’ Us is a dinosaur would soon be extinct thanks to eToys,” was their mantra.  It didn’t happen that way.  eToys went through over $100 million in investment capital, filed for bankruptcy, and sold their assets for $5 million.  Today Toy ‘R’ Us owns eToys.com.

eToy’s failure and the reason for it was predicted by a seasoned venture capitalist at the peak of their popularity.  This wise VC was a guest speaker in one of my classes.  He told us that eToys would fail because it was designed by MBAs for MBAs.  My classmates and I wrote him off as another one of those people who just didn’t “get it.”  It wasn’t until years later that I fully understood what he meant and why eToys failed.  eToy’s creators didn’t understand the market.  Their toy shopping experience was buying for nieces and nephews.  In their world, the ability to use a “selection engine” that would automatically pick out the right toy, have it gift wrapped and shipped was a huge time-saver.  Obviously they had never taken a child to Toys ‘R’ Us and seen the excitement in their eyes as they walked among aisle after aisle of toys.  They had never watched a parent examine a toy to make sure it was “the perfect gift” for their child.  They built the toy buying experience that they wanted, efficient and unemotional.

I’ve found that the solution to this problem is explaining to students that they are not the market.  I think this is good advice for all entrepreneurs.  Whether you are a student in business school or just an individual with the intelligence and courage to start or join a startup, you are not normal.  You are not like “most people.”  If you design the perfect solution for people like you then you will have a very small market.  If your business is going to be big, you will be selling to “most people.”  Your intelligence and ambition gives you the ability to understand most people better than they understand themselves.  Use this ability to figure out how to test your ideas and base your decisions on what works, not on what you think should work.

Starting a business based on a need you feel is still a good idea if you understand that you are not the market.

Congratulations to Facebook’s underwriters, you got it exactly right.  There should be no disappointment.

To explain, a quick overview on IPOs.  A company goes public to acquire cash that it needs to grow.  It is the job of the underwriters to estimate the price that public investors are willing to pay for a share of stock on the day of the IPO.  This number is very important to the company because the money that the company gets is based on this price.

For example, if the underwriters price an IPO at $10 and the stock jumps to $50 on the first day of trading, the company still only gets $10.  The difference between the IPO price and the closing price $50 – $10 = $40 goes to the investors who bought at $10 early in the day and sold at $50 at the end of the day.  In this case the underwriters failed.  The company could have received $50 but they only got $10.

Facebook’s IPO was priced at $38 and trading finished the day at $38 and change.  The underwriter’s estimate was near perfect.

So why are their so many articles saying the IPO fizzled, disappointed, and failed to live up to the hype?  Well the example I described was based on economic theory, not reality.  There are a couple reasons why the price normally jumps significantly during the first day.  First, the banks (who employ the underwriters) have a vested interest in a stock price that skyrockets on the first day of trading.  This is because the banks most valued customers are among the few who can buy at the IPO price.  If the price skyrockets, these valuable customers are really happy.

Second, the company’s executives, who hire the bank, normally hold a lot of stock.  Their net worth is based on the closing price, not on the IPO price.  So the bank’s best customers are really happy if the underwriter’s estimate is too low (as in my example) and the company’s executives are mostly indifferent.  Getting it exactly right has no upside.  No one congratulates the underwriters.  I think they should be recognized for a job well done.  So congratulations Facebook underwriters, you nailed it!

Image credit: www.FreeDigitalPhotos.net

I just bought a stand that holds my iphone in the car.  I wanted to be able to use my iPhone as a GPS device and needed to have a secure way to keep it in view while driving.  I found a stand that looked like the ideal solution and was made by a brand that I knew and respected. However, the reviews were terrible.

I was shocked that in a world where there are so many ways to express opinions and find reviews that any company would release a product that didn’t work.  My respect for the brand evaporated. I don’t think that a brand willing to release a sub-par quality product can survive.  If I’m right everybody will have to raise their game.  Every company will be forced to release nothing but great products.  There is just no point in trying to get away with poor quality, you are outed too quickly and too easily.  Everything will get better.

I won’t name the company that I didn’t buy from, they have enough bad press, but I will complement Griffin who makes an outstanding iPhone stand and MotionX who makes a great GPS app for the iPhone.

You remember what your grandma told you.  If you don’t have something nice to say, don’t say anything at all.  So I’ll just say that Netflix recently motivated me to try out Comcast’s new xfinity app.  Most of my TV entertainment time is spent watching movies.  Up until recently I got them from Netflix.  I knew I could get them on-demand from Comcast but browsing for them using the Comcast remote was too unfriendly.  The Netflix website was far superior.

Until now.  I’ve been using the xfinity app on my iPhone and iPad and it is outstanding.  Browsing for a movie on the ipad app is near perfect.  Scrolling through titles is easy, filtering is easy, searching is easy.  There is a nice preview window and reviews.  Selecting a movie is even better.  Just tap buy and the TV automatically changes channels and presents the movie.  That’s right, control you TV with your iPad.  It is fun.  Your purchase is confirmed with one button push on the Comcast remote control and you are watching your movie.

The app also has features that let you browse TV listings and manage your DVR.  I haven’t tried these because those features are reasonably easy to do using the old Comcast remote.  Movie browsing was the huge pain they’ve solved.

Congratulations Comcast, nicely done.