So what makes B2B marketing different than the well-known, and taught in all marketing classes, consumer and retail marketing? To give the answer right away: it is all about the Door Opener, problem-based marketing, to identify what problems customers have, making them aware of it and then providing proof that you have the best solution to solve it. B2B marketing gives answers to the question “Why do I need it?”, whereas consumer and retail marketing addresses the question “Which one should I buy?”.

Why is it that there is such a fundamental difference between B2B and B2C marketing?

In order to answer this one has to look into the history of marketing.

During the years of the industrial revolution many new mass products were created.  These new products were unknown so marketing at that time had to first explain what it is and why one would need it. This is the same as today’s B2B marketing. Then over time these consumer products were well-known and there was no point in explaining what a fridge or oven or whatever is, and why it is good to have one; people knew that. So marketing shifted away from explaining and moved to differentiating itself and associating the product with an image such as good feelings or celebrities using it. The age of brand marketing started where people bought brands and less so new - unknown - products. Marketing literally forgot about problem-based marketing as it was not needed. Of course for B2B marketers this is untrue since there you need to identify and explain the problem/pain first. Often the customers do not even know about it since they have workarounds. Only once you tell them convincingly that there is a problem and that your solution will provide benefits will they be receptive. Consumer marketing would - and I also hope - not convince a CIO to use a new software across its organization. Of course companies still try to do that and are surprised when the targets protect themselves from vendors’ pleasantries and approaches. To get decision makers to events requires to address issues, problems that they might also face and then offer solutions to it. In my experience the more concrete that is done the better. It then also does not really matter if you have 600 people attending or “only” 60. If among the 600 you have everybody and their son then I highly prefer the 60-people event with very interested people who come to find solutions for current problems they face. So in short its about the quality and not the quantity. Some samples from ads in 1930 I collected below. One ad explains that a fridge allows you to make ice cheaper and more conveniently, another one uses a better can opening mechanism as a differentiator for beer, and one ad for a public rural telephone device says it is easy to use for - even - fruit growers. Back during those times every marketer was a B2B marketer.

Had an interesting meeting yesterday with an equally interesting startup in Switzerland talking also about why it is hard to find good B2B marketers in Europe and if that is maybe the reason also why there are so few good IT startups to be found here.

Reading the book “Selling to the C-Suite” from Nicholas Read and Stephen Bistritz right now, I also came across this exact issue where they write the following interesting lines:

So it’s really not surprising that when we ask marketing directors in B2B organizations to explain their marketing mix, we learn that they are technically proficient at segmentation, database scrubbing, and targeting, as well as in using multichannel print, online, and digital media strategy. The names in the database are usually the right business contacts. And if their performance indicators are to release X number of press releases to analysts and journalists per year, run Y number of conferences and events to achieve minimum attendance goal, and pull Z number of leads from these conferences and trade shows, then most B2B marketing managers end their year feeling that they’ve done a pretty good job. And if they’re working in consumer retail companies, they’d be right. But not if they’re working in B2B. Most people don’t give this much thought because all through their career, marketing leads have been so-so, and they probably think that’s just how it goes. …

And to cut them some slack, how could they ever have been taught it when all the marketing theory taught in today’s schools is based on the household consumer goods model, which dropped the concept of problem-based marketing half a century ago?

So what is good B2B marketing is what needs to be answered next. Stay tuned….

Yesterday IBM announced the acquisition of DemandTec for $440 million. The company has hundreds of customers such as in retail and government helping them analyzing and deriving conclusions from massive amounts of company collected data.

“Big data”  as the name suggests has to do with masses of data collected from just about everywhere. We talk about terabytes and more of data collected from all kinds of sources such as information-sensing mobile devices, aerial sensory technologies, cameras, microphones, RFID readers, wireless sensor networks, social media, buying patterns and so on. The fact that 90% of the data in the world today was created within the past two years makes this an even bigger challenge as it is a constantly moving target. Currently used relational databases and  desktop statistics/visualization packages cannot deal with this unstructured data requiring instead massively parallel software running on large computers often grids of dozens, hundreds or even more of servers.

Its not surprising that Google is into this for quite a while since their search algorithm is doing exactly what big data is all about: collecting massive amounts of data and making decisions (search) based on analyzing them. Google is offering access to compute power now even to enterprises with its service BigQuery. More also in this Google blog.  Google was also there right at the beginning with its framework MapReduce that was then used in projects by others such as Yahoo leading to Hadoop, a story on this you find here.

Data collected are e.g. from web logs; RFID sensor networks; social networks; social data, Internet text and documents; Internet search indexing; call detail records; astronomy, atmospheric science, genomics, biogeochemical, biological, and other complex and/or interdisciplinary scientific research; military surveillance; medical records; photography archives; video archives; and large-scale eCommerce.

A McKinsey report on Big Data mentions e.g. these points:

• The use of big data will underpin new waves of productivity growth and consumer surplus. For example, we estimate that a retailer using big data to the full has the potential to increase its operating margin by more than 60 percent.
• The computer and electronic products and information sectors, as well as finance and insurance, and government are poised to gain substantially from the use of big data.
• Policies related to privacy, security, intellectual property, and even liability will need to be addressed in a big data world.

Today I attended a Panel meeting and lunch at the Swiss American Chamber of Commerce. Topic was security challenges in general and among the speakers was Peter Tippet, VP Technology & Innovation who flew in from the US for this event and who gave a nice speech. Some of the key points he mentioned:

• Data Breach Investigation report (DBIR) collects since 8 years valuable IT threat data
• Verizon is working on 1000 cases per year where security attacks succeeded, the results also go into the DBIR
• 92% of all security breaches come from stealing the password, a simple 2-factor login (e.g. security chip card) would very likely stop most of these incidents
• faster patching would not have prevented any of the investigated cases
• in most cases (70%) the intruders use non-critical business applications to come in and not at all the top applications where most of the IT security money is spent
• Verizon runs the backbone of the Internet if you like by providing 20,000 gateways in 160 countries
• through these gateways they are able to identify 1700 names/day of possible or actual intruders
• they are getting data for prosecuting cyber criminals and did so in 45 successful cases in 2010, 97% of these cases would have been preventable with the right security measures
• his bottom line message was: do more of the very simple things and do them very well instead of trying the sophisticated stuff as most attacks happen not there

I tried out this startup company’s service today and it worked very nicely. At first I was not sure what it might bring in addition to web presentation services such as GoToMeeting or Webex, but it soon became clear.

While GoToMeeting still has no smartphone app, which I consider as pretty weak, Webex has that too. MightyMeeting’s approach is to upload your presentations (the limit is 20 MBytes per presentation) and then run it from there. So it is the SaaS version of these two other web presentation tools.

What are the advantages of doing that? The biggest advantage I see is in being able to run an online presentation simply from your iPhone, iPod Touch, Android or other smartphone and not having to be at your laptop or PC. Of course you can run it from there, too. While it is also possible to run a presentation and advance the slides from your smartphone while your laptop is connected to an LCD beamer, I was not then able to select a full-screen view, which is not ideal of course as you always see the border of the program and the browser. The program is in beta so I hope they add full screen view as well in that operation. One can expect that they will add better usability and communication features such as VoIP (a basic chat function is already supported) over time too.

This tool is free right now. No idea how they plan to commercialize it. One approach could be to come out with an enterprise version that they charge for the same way the others do. MightyMeeting btw won the last event of Founders Showcase run by TheFunded in Silicon Valley where every 3 months about 200 entrepreneurs and VCs come together to listen to pitches from very early stage companies and then vote for the best one that evening.

Ooops - you might wonder how this headline goes together with our very own services for social communities? In fact it goes very well, as the point I want to make here more or less concurs with this article in Business Week back in May 2009. Gene Marks, who is a bestselling author for small business topics, makes this point there:

We’ve been misled as to the benefits of social networking sites. Many of us are finding that these tools do not live up to the hype, especially for small business. Once we start digging deeper, we’re finding a lot of challenges. Are you thinking of using Facebook, Twitter, or the like in your business? Before you go any further, consider the following myths:…

Most of the marketing departments who start using social media marketing think that they need to get onto Facebook and Twitter first. Actually, there is a much better way, which also makes use of the social community advantages for your market ecosystem: private social communities. Of course many might also mistake social media marketing with Facebook, StudiVZ or Twitter only and see - rightly - no point for their target audiences engaging. Marks also makes this point here (which I also agree with except that I don’t like the examples he has chosen):

Where, then, should a small business owner go online? Often the best social networking sites are specific to business owners. For example, Intuit’s (INTU) social media people are on their own small business community. Another good one is Bank of America’s (BAC) small business community.

The reason I think these are not such good examples is that they start out with the idea to create “small business communities” when in fact there is no such thing as people looking for small business advice but they are looking for accounting, investment, IT, etc. advice. Both do that in effect, of course, but should change their headings I think.

To make the same point less controversial sounding he could have asked “when to use public social media services and when to build your own?”.

To give you my opinion right away: I can’t imagine that Motorola and Verizon will by addressing some of the possible shortcomings of the iPhone ecosystem make their own Droid launch a success. Product management is more complicated than looking at  the market leader, writing down all its product specs and then simply bringing out a product that shows better features. This strategy succeeds only in a commodity market. But Apple and the iPhone, app store, iTunes ecosystem is NOT a simple product only but a thought-through end-to-end user experience product & service offering. The Motorola and Verizon folks have obviously still not understood this otherwise they would not have launched such a desperate campaign merely addressing - mostly - features. The strongest point was the openness of Google’s Android platform but also here they did a quick-and-dirty job. Not surprising knowing how desperate Motorola is these days to finally get back on track with a successful mobile phone after its long-time-ago success of the Razr.

But if you want to tackle Apple then you must take them on in a completely different way. And I think they are vulnerable because any company who is arrogant will miss opportunities or simply not do the best job possible. History has shown that over and over again. Unfortunately the Indian or Chinese style of product management, comparing spec sheet features one by one is not enough to make an impact. This has to be done differently…

Ever so often I take out some older DVDs to watch them. Last night I picked one of my favorites, Out of Africa (from 1985, 7 oscars), with Meryl Streep, Robert Redford and Klaus Maria Brandauer. I asked myself then why is this such a great movie. Obviously great actors and one of my favorite actresses: Meryl Streep,  who plays a baroness from the “small country next to Germany”, Denmark. Bored, feeling trapped in a men-ruled world, she decides - strangely - to break out of it all by marrying “her lover’s brother” and following him to Kenya where the British were operating a colony at the time.

Here a list of what I think makes this a great movie and what you can learn from it if you are in product marketing and also trying to run a campaign that gets attention, makes a difference and will be remembered:

• Something unknown: Africa and what to expect there are as interesting for the audience as for Karen Blixen
• Story: clearly a great story is told in this movie, and in addition Karen Blixen is a great story teller
• Adventure: going to Kenya at the time was clearly a big adventure and I suppose one of the main reasons, next to the bad weather in England, why they went there
• Love: great love story, no great movie without that
• Freedom: flying above the endless colorful African grasslands and mountains must be a fantastic experience; I always enjoyed flying across the flat land expanding from the Silicon Valley to the Sierra Nevada in a small plane, but to do this in Africa must be even more stunnin
• Beauty: beautiful actors and landscape as mentioned
• Drama: love alone won’t be enough, only the opposite makes it like a real life story
• Women in work life: clearly Karen Blixen is in her time what many working women are in business life today: independence-seeking, competent, hard working, fact-oriented, apolitical, detail-observing, listening, good communicators, tough but fair…, an interesting subject for many, not only women

Enjoy the weekend.

Kenya picture, courtesy of Ben Heine.

LinkedIn, the professional contact social network, is somewhat in the shadow of its much more visible rivals Facebook, Myspace or - recently - Twitter. For business users LinkedIn is in my opinion the strongest public social network tool I can think of. I also tried out XING, its German rival, but dropped it after finding little other than job seekers in it. LinkedIn on the other hand becomes a very very strong tool once you have 100+ or so contacts as you can then get in contact via InMail with many people that you might want to do business with. And with every new contact you sign on the network grows exponentially. What most people don’t know is that LinkedIn was started also by a German: Konstantin Guericke. Recently LinkedIn has been trying to also include more social communication features such as e.g. a status line on what you are working on.

I think they could easily also include more of what Facebook and Twitter have to offer and with that get the network growing some more. One key difference is that LinkedIn are far less willing to share their API with developers; this may be a benefit in some ways but it does limit the ways that LinkedIn can be tied into the user’s life. Another way they might expand is that they could start a LinkedIn Junior or something like that to attract younger folks as well. But whichever way you look at it, LinkedIn is a big success story and all the folks who have been involved deserve a lot of respect.

Recently I have been hearing in various places that print news were recovering, triggering comments of relief (from the newspapers) that predictions that everything was heading online were obviously not correct. I had a smile on my face when I read that, and it reminded me of a short-term assignment I had more than ten years ago with Bertelsmannn BMG in Hong Kong, where I had to plan for a data center for their AsiaPac countries. BMG was already thinking then about distributing music over the Internet and for that purpose went into the Internet access business. They formed a joint venture with - at that time market leader - AOL and even built their own country-wide access networks in Germany, as well as buying providers in other countries. Of course they did not realize that the Internet is a shared medium and it therefore did not make too much sense to buy it like a print or CD manufacturing plant.  Back to Hong Kong: as the data center did not seem to make economic sense at the time I suggested to them that I help with setting up an online music sales operation testing the waters in the AsiaPac region first (at that time dial-up was still to be found everywhere). Despite their investment into the AOL joint venture and into whole country IP networks (in Hong Kong we had the option to buy Hong Kong SuperNet, the city’s first and largest ISP) they looked quite puzzled about my offering and had one question only: how do we protect ourselves from illegal pirate downloads and distributions? My response was that there are technical methods even if not all can be protected, but most importantly we cannot sit and wait until it happens anyway. So still they turned the idea down and I moved on as well…

By now we all know what happened: a fruit company from Cupertino sells more than 50% of all music online and is taking the profits. Not only Bertelsmann BMG but all the other music labels lost the race to a company that had no idea about the music label business and its distribution at all.

So while the music industry shift online is done and one company dominates it, I am convinced we will see the same in the print media. And it looks like it might be the same fruit company eying for it. Read I. Cringley’s latest article on this, providing more background info. Interesting to read that he had the exact same experience in the print publication industry (in 1994 already) that I had in the music industry. History repeats itself, it seems, telling us that if you wait too long someone else will come and take that opportunity.