Systems Thinking in High Tech Marketing Interesting Experiences

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Systems Thinking in High Tech Marketing: Interesting Experiences Michael F Kelly CEO mkelly@techtel. com Techtel Corp www. techtel. com With Michael Zargham, Graham Crowe Judy Dinglasan, Elliot Feinberg Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 1

Agenda: Using Models 1. Problems in High Tech Marketing 2. Solutions based on Systems Thinking/Systems Dynamics Models 3. SAP Example 4. Techtel Contribution Chart Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 2

Marketing In High Tech § Typical - Silo thinking § Marketing gets awareness, and sales leads § Sales complains about the lead quality, sell anything they can § PR and Advertising ‘send’ messages, assume work § Products often immature, not good match to buyers needs, but sell anyway § After sale, seller hides behind poor automation § Unchanged for years…. Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 3

Meanwhile … Customer becomes king, demand everything Competition from everywhere Fast-changing environment Customers are seen as misbehaving, getting info more from each other than from sellers § Fear and doubt by marketers: What to do? § § Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 4

As a result § Marketing’s contribution is questioned § CEO’s demand Marketing ROI, but performance is hard to prove § Average CMO lasts 1. 5 years § Processes that don’t work are endlessly repeated § Much waste, much academic criticism, little change. Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 5

Old Mind Models in Marketing § Best practice – find out what works for someone else and imitate it § Simple models of customers § Customers don’t learn § Linear, bullet point analysis and summaries § Effectiveness: ‘it was done’, not ‘did it work? ’ § Local optimum for politics vs. what did it do for the company § See only a part of the overall § Don’t know what to change to improve § Often give up trying or work on the trivial § Manipulate customers to buy what brings you revenue vs. provide real solutions to what customers want. Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 6

In other words…. § The usual problems of non-systems thinking. § Non alignment of functions § Locked into dysfunctional system which continues to be used Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 7

Using Systems Thinking and SD § We thought a lot about this…. § And came up with new tools: § How Sellers see he Market § How Buyers see the Market § Combination § Become the Customer § Example: SAP redefines Influence § And a better way to measure performance Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 8

Strategy: Become the Customer § If you could become your customer§ You would know what you need to supply § You would know what you need to say and do § You would know what not to say and do § You would know what you do with the solution and how it should work § You would know how you want to find and decide whether or not to buy it § You would know what you think of alternative solutions § You would know what you think of your company vs. competitors, and why and how it affects your choice. § All based on the full experience of the customers § So, how can you become the customer? Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 12

How to Become the Customer § If it’s a consumer/small business product or service – become a customer like anyone else and have the experience. Are you happy? § If it’s a business product or service, its harder - how does a PR person at IBM become a customer of DB 2? § The approach – intense customer knowledge plus models: ‘Know customer ‘as if’ customer. § Know your customer as well as if you were your customer. Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 13

We’re not talking about… Customer Centric Customer Touch Points Customer Relationship Management (CRM) Customer Service Customer-Oriented And Customer Communities These are ways to find out enough of how customers think to have them buy more from you § What you want is to understand your customers to build a relationship, to offer them more and better, to build together § § § § Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 14

The SAP Influence Initiative § In 2006 SAP Global Communications undertook a hard look at itself, and problems like these. § SAP was questioning the status quo and their old processes, old organization § Asked Techtel for new info: how are Software Buyers influenced – from customer viewpoint, not from internal structure. Unbiased, Buyer. POV. § Asked for new info: what’s the value of each influencer (signal theory model) § Asked for feedback from buyers, users, in depth to respond to. § Asked customers if the messages they were contemplating were important § Models everywhere, what to ask, who to ask, how customers think and what they do and why. Where do needs come from, and especially, who and how to drive influence especially thru third parties. Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 15

What happens? § From the buyer’s point of view (buyer. POV), you’ll look back at your ads, your pr, your messages, and see which are on target, which just don’t work and which are embarrassingly irrelevant. § You’ll know which half of your advertising doesn’t work! § You’ll know what your customer wants and why § You’ll know where and how to reach them § You’ll know if they don’t want to buy from you and why and what you have to say to make repair the relationship § You’ll also know what you need from the product, the service, the support and what you’ll tell others, and why Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 16

Techtel Contribution Charting Start with what is to be achieved and then show what should be done to achieve it: Done as opposed to Doing Accomplished as opposed to Working On n Then organize Or reorganize around that and measure performance by contribution 17

Learned § Thinking in terms of states, agents led to care in talking about POV of sellers vs. buyers. § Systems Thinking is the way of Thinking § i. Think, then i. Do Michael F Kelly CEO Techtel Corporation mkelly@techtel. com Copyright © 1998 -2008 by Techtel Corporation. All rights reserved. 2000 Powell St. , Ste. 1070, Emeryville, CA 94608 • (510) 655 -9414 • www. techtel. com Slide 21