Searching for a strategy

Despite some successes and quite an interesting and varied lifestyle, my early entrepreneurial activities hadn't produced any real understanding. Everything seemed to have happened too much by chance. It was hard to see how skill had anything to do with getting a start into an entrepreneurial way of life. Apart from the simple strategy of talking to lots of people, getting into different situations and taking the opportunities when they arose, there seemed to be little that had to be learned. There was nothing that my scientific background could seize upon to be used as a mental model to use to go about being an entrepreneur in a more efficient or purposeful way.

Searching for this ephemeral knowledge, I decided to study marketing. I wanted more than just a "be an expert in a month" depth of knowledge so I spent several months in the library in High Holborn, London, going through the marketing books there. Libraries in London have areas of speciality and at that time the library in Holborn was the library specialising in books about marketing.

Three conceptual models from those months of study stand out in my mind. Together they form a conceptual framework that I have used successfully for many different types of communication strategies. They apply particularly well in the environment of the Internet. Keep them in mind as you read through the next few chapters.

Advertising only to suitable clients

Before going into that library, I'd thought advertising and marketing were about getting an advertising message across to as many people as possible. By the time the three months were up I'd realised that advertising and marketing needed to be narrowly targeted to achieve the maximum effect and efficiency.

All advertising or marketing messages have to be carefully designed to reach and to appeal only to the people who are likely to benefit from any service or product being marketed. Appealing to anyone outside of this range was not only wasteful but could be deleterious.

Such a requirement needs more than just a general description of a product or service being advertised. It needs to take into account the product or service's strengths and weaknesses. Advertising the strengths is easy; more difficult is advertising the weaknesses. Weaknesses must not be covered up or glossed over. They should be advertised out in front. The weaknesses should be clearly stated because they then act as a filtering mechanism to ensure that you don't get any dissatisfied customers.

Applying that simple criteria to analyse the strategy of Web sites would see many failing on this count. In the physical world you may be able to get away with dissatisfied customers but in the complex communicating environment of the Internet they could spell disaster.

It certainly does qualify the oft heard statement "Content is what it is all about". How many Web site designs are there that sport novelty or eye candy for the sake of it? How much of the design is aimed at the actual needs of the targeted customer? How much gets in the way of a customer who goes to a site for a purpose rather than to admire the graphics or clever animations?

As Mrs. Brisby says, "Without graphics, you must be amazed by what must fill the void - and that is called content"

2) One satisfied customer creates four more

The second really important concept that came across to me at that time was a chapter in one of the books which was headed "Each satisfied customer creates four others". I don't remember where that figure came from, I'm not even sure if it is accurate or not. What I do know now though - from many years of experience - is that it describes the essence of one of the most powerful and effective forms of marketing: word of mouth.

When you see the eye candy banners and the "click through" mentality of much of Web site marketing, it makes you wonder whether these people really know what they are doing. It certainly isn't trying to capitalise on the most potent form of marketing on the Internet: the power of "word of mouth". If the Internet is suitable for any kind of marketing surely word of mouth (word by email) has to be the number one method.

Yet, so many marketing people seem to be quite oblivious of this and design their marketing and advertising strategies as if they were using conventional, industrial age mass media:- broadcasting out to the masses. Not surprisingly, this error of judgement is very common with large advertising companies who are applying the skills and techniques they learned from the industrial age directly onto the Internet and the Web. As their clients are rapidly discovering, many traditional techniques used with mass media are hopelessly ineffective and inefficient for e-commerce.

As an important corollary to this, I've also heard the saying "One dissatisfied customer creates eleven more".

3) The sociogram

Remembering back to those three months, the concept that most impressed me was that of a marketing strategy used by a drug company. It had been spending quite considerable sums of money mailing out expensive literature, sales packs and samples to thousands of doctors on its mailing list and was getting very disappointing results.

Using a questionnaire to try to discover what influenced doctors in their decisions to prescribe particular drugs, the drug company discovered by far the most influential factor was advice or recommendations from other doctors.

To investigate this clue, the drug company picked an area in the country and sent a team of investigators to call on every single doctor there. These investigators were instructed to try to find out who was speaking to who. When these result were obtained, the marketing department took a map of the area and drew a small circle on the map to mark the geographic location of each doctor, then drew a straight line between any doctors where a communication link had been established. Such a diagram is known as a sociogram.

What they discovered, when they completed the map, was that the lines radiating out from the doctors varied immensely. Some doctors had lines connecting them with many others, some with only one or two. Looking at the overall picture it was clear that if peer to peer communication was a strong influence then the influence was concentrated around a relatively small number of doctors.

Changing their marketing strategy in this particular area, the drug company found that concentrating all of the marketing effort onto only these highly communicative nodes, produced far better results than if the marketing effort was spread equally over all doctors.

The computer enhanced communication environment of the Internet suggests that such a marketing strategy could be effectively and efficiently employed for all manner of products and services. Again, this is a solution involving communication between people and involves very little technological knowledge at all.

There is a corollary to this. When I lived in London, my family used a doctor who had a practice in the West End. Besides his practice he also spent two days a week as a consultant at the nearby Middlesex Hospital. This hospital is very close to Harley Street: the street famed throughout the world for its surgeons and specialist medical practitioners.

My family doctor, through many years spent attending patients at the Middlesex hospital had got to know most of the Harley Street specialists. As a consequence, whenever he found something wrong with any of his patients he could immediately recommend the best specialist for treating their condition. Although only a general practitioner, he effectively had the skills and experience of some of the worlds leading specialists.

In essence, this is very similar to one of the busy nodes of the sociogram. The difference is that the doctor is using the connection to other nodes as an extension of his own abilities to provide a service to his patients. He used his network of contacts wisely. He would always refer the patient on the basis of looking after the patient's best interest - which included giving the patient best value as well as the best medical service.