Posts Tagged ‘awareness’

Portfolio management is a critical activity for any business leader, be it a General Manager or a Venture Capitalist.  This article offers a case study on portfolio management with a focus on value-net¹ and the economic value of portfolio companies. The intent is to provide an analysis of the portfolio that can serve as the basis for growth strategy.

The Value-Net¹:

The success of any business initiative depends on the value delivered to its customers. While immediate customers are important for near-term growth, the long-term viability of a company hinges on the value delivered to eventual customers, i.e. customer’s customer.  Hence a view of how you serve your eventual customers is important in portfolio management. Several business entities, called value-net¹ partners, are involved in the process of delivering value to end customers.

The Portfolio:

Rajesh Setty is a successful CEO and now a venture capitalist with a growing portfolio of companies.

Following is a brief description of 3 of his portfolio companies:

• ContentKing²:

An innovative approach to solving the content marketing challenges. Content such as white paper and ebooks are better managed to ensure that it is efficiently delivered to the target audience. Since the company is still in a stealth mode, a fictitious name, ContentKing, is used.

• Jiffle³ :

Jiffle brings efficiency and intelligence to event marketing activities.  It offers a simple and intuitive web portal for event managers to schedule and manage client engagements at events.  In addition, customers can generate various reports on the efficacy of their participation at various events by product line, region, etc.

• iCharts⁴ :

iCharts business service allows one to easily build sophisticated, searchable online charts. iCharts makes it easy for customers, journalists and others to find, reuse and republish your data — helping proliferation of your data across the web.

Analysis of the above portfolio companies highlighted a common theme in their value proposition. There were opportunities for collaboration among portfolio companies and also opportunities to expand the value range of services.

A common theme among the 3 portfolio companies is that their immediate customers are demand generation teams.  Hence these 3 portfolio companies influence the adoption of product/service by the eventual customers. However they are at different stages of the AIDA – Marketing model⁵.

AIDA – Model ⁵:

There are 4 stages in the AIDA model – Awareness, Interest, Desire and Action.  A customer first has to be aware of the existence of the product then be interested in learning more about the product, then have the desire/need to buy the product and eventually be convinced that it is the right product in order to buy it. Support is added as the last stage by some marketing professionals. Different tools, tactics and activities are required to be effective at each of the stages.

The dynamics of each of the stages in the AIDA model are different. As you progress from Awareness to Action, the number leads decreases while the cost per lead increases. The following is an illustration of this dynamics. The numbers in figure 1 and 2 illustrate the relative scales. The actual value varies by product and industry.

Figure 1

Mapping the Portfolio on the AIDA Model:

The 3 portfolio companies are mapped on the AIDA model in figure 2. The immediate target customers are listed below the portfolio company. Finally, the Assets/Capabilities of the VC, Rajesh Setty, is also mapped to highlight the investor’s affinity to their domain expertise.

iCharts⁴ is at the cusp between Awareness and Interest. The interactive charts not only build awareness to a company’s offering but also generate interest in the offering by providing interactive charts that offer more details. ContentKing² deals with whitepapers and eBooks, hence heavily in the interest phase. Jiffle³ is placed in the Decision stage but can play well into the action phase. The meetings at conferences and tradeshows influence the decision and at time deals are closed at these meetings.

Figure 2

The Conclusion:

The mapping in Figure 2 provides a bird’s eye view of the strategic position of the portfolio companies in the AIDA model. This can serve as the foundation to develop strategic growth initiatives for the individual companies as well as help VCs manage their portfolio companies.

Considering the price per lead at each stage of the AIDA model, one can get a sense of the valuation as well as revenue potential of the portfolio companies. The portfolio manger can evaluate collaboration opportunities among the portfolio companies and also opportunities to invest in new companies.

The individual portfolio companies can brainstorm whether it makes strategic sense to expand along the AIDA model. It also forces the portfolio companies to think beyond their immediate customers by engaging in initiatives and partnerships to help product/services companies in their pursuit to close sales.

Note:

1. Value Net:
   • http://en.wikipedia.org/wiki/Value_network
   • Brandenburger, A. M. and B. J. Nalebuff. “The Right Game: Use Game Theory to Shape Strategy,” Harvard Business Review, July – August 1995
2. ContentKing: http://www.rajeshsetty.com (watch the URL for announcements)
3. Jiffle: http://www.jifflenow.com
4. iCharts: http://www.ichartsbusiness.com
5. AIDA Model:  http://en.wikipedia.org/wiki/AIDA_(marketing)

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This article was contributed by Sanjai Marimadaiah, a seasoned product marketing professional and author of an upcoming book ProductMarketingTweet. Sanjai works as the Global Offerings Manager for IBM Smart Business. You can follow Sanjai on Twitter at Sanjaim1

Tagged as: Action, active garage, ADIA Model, AIDA, awareness, case study, content king, cost, customers, Desire, ibm, icharts, industry, Interest, jiffle, mapping, portfolio management, product, product adoption cycle, Rajesh Setty, sanjai marimadaiah, value proposition, value-net

Constructing the optimal mix is part art and part science.  The art lies in understanding the nuances between the different marketing vehicles, how to craft copy tailored to the marketing vehicle, and how to combine copy with creative for the optimal impact. The science lies in the measurement and tracking of the effectiveness of various vehicles at delivering your message to the target audience in the context of the stated communications objectives.

There are two pieces of information that directly inform how we create the marketing mix.

1. How does our target customer gather information? : Who do they go to for recommendations?  Do they search online or do they ask for suggestions from colleagues, friends or family?  Who influences the purchasing process?  Answers to these questions help us to target the influencers as well as the target customers.
2. How does our target customer want to receive information? : Do they want a lot of detail but not very often?  Do they prefer to get more frequent information with less detail?  Do they like phone, email or old-fashioned paper and envelopes?  Again, this information will directly impact the types of marketing vehicles we invest in.

Marketing vehicles have a defined purpose and should be used according to the stated communication objectives.  The following is a summary of the primary marketing vehicles, definitions, purpose described in terms of awareness, demand generation or lead conversion, and examples of each.  This is not an exhaustive list, but is a great start.

Awareness:  Ensure that customers know you exist – eyes and ears

Demand Generation:  Attracting customers to your products/services – call, click or visit

Lead Conversion:  Converting prospects to revenue – customers

Marketing Vehicle	Definition	Purpose	Examples
Advertising	Mass communications that broaden perceptions.	Awareness Lead Generation	Broadcast (TV, radio), Print  (newspaper, magazine), Online (banner ads, site ads)
Collateral &  Sales Tools	Material describing a product, service, or solution used to support sales and marketing efforts.	Demand Generation	Brochure, card/flyer, catalog, cover letter, envelope, datasheet, folder, binder, video, presentation, promotional item, poster, banner, magazine, newsletter, competitive brief, instant reference guide, order and configuration guide.
Customer Testimonials	Customer endorsements illustrating the impact of the company product, service or solution.	Demand Generation Lead Conversion	Quotes, case studies, success stories, references, speaking engagements.
Direct Marketing	A method of contacting individual customers directly and obtaining their responses.	Lead Conversion	Direct mail, telemarketing, addressable media.
Event	An in-person or online occurrence designed to increase awareness, accelerate sales, and build relationships.	Awareness	Tradeshow, road show, seminar, conference, hospitality, executive briefing, webinar, online seminar.
Incentives	Providing equipment, discount or rebates to entice customers to try and/or purchase products, services or solutions.	Lead Conversion	Demo equipment, evaluation and trade-in, free sample or trial, mail-in or instant rebate or gift with purchase.
Internal Communications	Use of any marketing vehicle to keep employees informed.	Awareness	Broadcast/webcast, leadership meetings, internal websites, newsletters, webinars, etc.
Internet Marketing	The use of the internet to promote, advertise and sell goods and services.	Awareness Demand Generation Lead Conversion	Websites, pay-per-click advertising, banners, e-mail marketing, search engine marketing, search engine optimization, blogs, webcasts, podcasts.
Co-Marketing	Funds and tools provided to partners to enable them to execute specific marketing strategies and tactics on behalf of the company.	Awareness Demand Generation	Affinity marketing, affiliate marketing, lead generation, co-op marketing, channel incentives, partner compensation (SPIF)
Market Research	Research undertaken with the purpose on increasing understanding of markets, customers, competition, design and positioning of products, services, or solutions.	Demand Generation	Primary, secondary, syndicated, campaign testing, ad testing, competitive benchmarking.
Merchandising	Materials created and displayed in retail locations for the purpose of affecting product selection and purchase.	Lead Conversion	Brochure, demo, samples, lugon, highlighter, posters, banners, rebate, selection guides, tear pads.
Packaging	The physical material used to contain product including materials on-box or in-box designed to improve the customer experience.	Lead Conversion	Physical packages, inserts, literature, software, stickers, illustrations, installation guides, user manuals.
Public Relations	Activities that focus on industry influencers to establish the public image of the company and its products, services or solutions.	Awareness Demand Generation	Press releases, endorsements, article placement, interviews, news conference, press tour, press kits, media briefings, product reviews, 3rd party releases, speaker’s bureau, white paper placement.
Viral Marketing	Activities that use pre-existing social networks to produce increases in brand awareness, through self-replicating viral processes, analogous to the spread of pathological and computer viruses.	Awareness Demand Generation	Word-of-mouth with online enhancements, blogs, audio and/or video clips, flash, games, advergames, etc.

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This article is contributed by Laura Lowell, Author of the Amazon bestseller ’42 Rules of Marketing’ and the upcoming ‘42 Rules to Build Your Brand and Your Business’. You can follow her on twitter at @42_rules.

Tagged as: 42 Rules, active garage, advertising, awareness, Branding, co-marketing, communications, customer testimonials, definition, demand, demand generation, direct marketing, event, examples, incentives, internet marketing, laura lowell, lead conversion, market research, marketing, marketing vehicle, merchandising, mix, packaging, public relations, purpose, sales, sales tools, viral marketing