Following the Market is the "Marketer's Conundrum"

Posted by Nick Greco on January 4

MarketScale_Marketing_Following_Market.jpegFew companies have provided the visible, public examples of marketing strategy like Apple. Yes, Apple is an over-quoted, and overused example. But its well-chronicled and episodic story arc remains too good to ignore.

First there was the hobbyist period, where the technology hadn’t reached the majority; they cultivated a niche group of fans.

Next, they defied convention to go ‘simple’ early, and crossed the chasm quickly in the computer game, resulting in big early 1980’s wins.

After that, Apple, with a strong business became more traditional and followed the market on pricing, product and features. This period lasted roughly ten years.

Upon Jobs’ return, the company ended its market-driven approach, consolidated product lines and once again made increasingly complex computers simple—at a time when the internet was really taking off.

On the heels of this success, technology was ready to go mobile and personal electronics flourished. Apple brought back their 1980’s strategy of being really simple, really early in the market and getting to the masses first.

Apple used the cash to perfect a brand, further their product lineup, and enjoyed the network effects of their ecosystem for year after year.

Today, however, like the late 1980’s, Apple is being asked to go back to market-driven thinking. Folks are upset with Apple’s simplistic approach to design, and relatively poor specifications compared to the market—exactly the criticism of the Macintosh projects of the 80’s. Furthermore, the same challenger is stronger than ever. Microsoft, under an updated strategy is thriving, and even borrowing from Apple’s playbook with beautiful hardware design to match great software and really nice high-end retail stores.

Like a logical political strategist, analysts say “listen to the market”—it’s clearly asking for more logical design. Better battery life. Better compatibility. Apple has the cash, the brand and the distribution to do just that, but will they? Maybe they have to. 

The power of great product and marketing innovation is not just creativity. There are many poor artists and designers out there. It is the power to ignore the market, to temporarily ignore sales channels and to, as Wayne Gretzky said “skate to where the puck is going, not where it's been.” Folks quote that all the time. But what they don’t realize is that while you as a business leader are skating to where the puck is going—not where it is—all the smart people who participate in markets will reject your vision. Worse, your customers will reject your vision. And when the smart people and customers’ opinions on your approach are seemingly confirmed, inventive, forward-looking vision is often declared dead.

“It’s time we listened to what the market is saying.”

“We want to compete on xyz, launching a competitive offering in xyz.”

 “Our customers have been telling us...”

All the quotes of logical, smart business leaders.

All quotes that will lead to immediate wins. One year, two year wins.  When a company pursues market-readiness, it wins. This is the reason businesses often temporarily thrive when visionary leadership departs. Apple saw just this when it’s stock price doubled after the death of Steve Jobs. The company was able to sell to the present market and make logical decisions, such as declaring a dividend for shareholders, that please investors now. But at what cost for the future?

Among the above quotes, another word stands out—compete. Peter Thiel outlines a very Jobsian recipe for business growth in his book Zero to One. The central premise is that competition is bad. That companies seek rivalries at their own risk; that differentiation through innovation, and—on a small scale—monopolization of a market should be preferred to competition.

He cites great examples such as Google’s ability to enjoy a near-monopoly in search. They got there through supreme innovation.

And yet such innovation, requires that one ignore the present time. Clayton Christensen, famous for his books ‘The Innovators Solution’ and ‘The Innovators Dilemma’ could write another one: “The Marketers Conundrum”, which describes the fact that to reach new markets, one must unpopularly reject the present, reject the market, reject the smart people and bet on his or her own vision.

The Marketers Conundrum is so strong that it stymies innovation at the grandest of levels. It’s the reason that mature companies struggle to innovate; they must pursue short-term profits, which are unkind to the truly innovative.

What lesson can marketers and business leaders learn from the Marketers Conundrum? After all, with job security, and real short-term working capital, cash, revenue and profit needs, few businesses can afford to reject the very markets they participate in and think longer term. Even fewer business leaders have the luxury of doing so without the full support of their colleagues, investors or board of directors.

And so we cannot simply say “forget the present, forget the market, your sales channels can wait!” 

But as you start 2017, you can begin to listen for the perils of the present. As businesses challenges are greeted with calls to standardize, to make more compatible, to outcompete, to follow the market, you can know it is these logical, short-term wins that may limit the long-term success.

If one must accept the imperitive of the present, is there nothing that can be done to address the Marketer's Conundrum? Fortunately, one strategy in this limited context seems viable. Complement short term product-centric wins with a focus on holistic brand-positioning. A dual-purpose marketing approach is increasingly effective. Allow your product marketing to focus on the present, while building a forward-looking brand that advocates for the future. As product marketing drives commoditization, fight it first with innovation where at all possible, but fight it second with a differentiated brand. Explore markets your competition is not. And at all costs, focus on your holistic value proposition at the brand level—product, service, innovation—as opposed to a reliance on features and pricing.

Products take years to develop. Brands, however, can position their holistic offerings immediately. Through video content, updated design, vision and communication strategy, brands can be the differentiated, forward-thinking representative of your product suite, and slowly, over time, a culture of innovation will catch up. New markets may ignite. And the profit associated with your winning battle against commoditization may provide the runway needed to pursue a long-term innovative approach that rejects the short-term pressures of present profits.marketscale_linkedin.png.

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