Marketing High-Technology Products
About twenty years ago, I read “The Regis Touch: New Marketing Strategies for Uncertain Times”, by Regis McKenna, now out of print. McKenna was a famous marketing expert who advised Apple Computer, Intel, and National Semiconductor.
I took away one big point from the book: “The difference between high-tech marketing and other marketing is that it’s so difficult and costly to try out and evaluate the product.” For example, if someone needs a database management system, they could try implementing their whole application in two different DBMS’s and compare which has better features and performance. But nobody can really do that, because it takes far too much time and effort.
Because of this, the success of a product is very dependent on word-of-mouth. The example in the book was: suppose you advertise and market your product to death. But then a bunch of high-tech decision makers are having breakfast together at some Silicon Valley restaurant, and one of them says “Oh, yeah, we tried Product X, but it worked badly and we replaced it.” Nobody else at that table will ever take a second look at Product X after that! Game over.
He was exaggerating slightly. If our prospect has heard a lot of good things about the product, then maybe hearing one negative report won’t be fatal. And it may depend a lot on whom he or she hears the story from.
The lesson is that in high-technology, you must be very careful to make your customers happy, and prevent that kind of bad word of mouth from happening. Don’t market and sell to customers from whom the product is inappropriate and who will inevitably be frustrated with it.
Most of the above applies to free or open software just as much as commercial software. In the commercial world, if you have a direct sales force, it’s pretty hard to stop them from trying to make their quota, if they’re simply given a commission on sales in the usual way. You may want to think about some other kind of incentive system.
Tags: Marketing
December 24th, 2007 at 3:00 pm
If that were generally true, how come e.g. SAP , after a gazillion spectacular failures still seems to be selling like cupcakes?
December 24th, 2007 at 3:28 pm
I don’t know much about SAP failures, but there are clearly a whole lot of SAP installations in the world, whose customers find it acceptable. I guess I wasn’t specific enough. I don’t really mean that any bad story will kill a product, in all cases. What I said applies a whole lot more to products that people aren’t familiar with, and that don’t have a track record. A sweet-spot case for the kind of scenario I’m talking about would be a novel product in a new area, that doesn’t have much of an installed base yet.
December 25th, 2007 at 4:06 am
Like the way Intel killed capability architectures forever with the 432, perhaps?