The 3 Marketing Rules that made Apple Computer such a success

I'm about 12% (that's the Kindle for you!) through Walter Isaacson's biography of Steve Jobs. It makes for fascinating reading particularly as I'm at the chapter on the birth of the Apple II, the first micro I ever sold commercially (yes, I am that old).

What really caught my attention and led to me re-read a section was a piece that described the early marketing philosophy of Apple Computers. Written by their first ‘proper’ marketing man, Mike Markkula, it was a one-page summary of their marketing principles and applies just as much TODAY and to ANY business as it did back then.

The 3 principles are:

Empathy: This concerns having an intimate connection with the feelings of the customer. As Markkula wrote “We will truly understand their needs better than any other company.” Who would argue that Apple won out more often than not by getting the product absolutely right, even when technically better and cheaper products existed?

Focus:“In order to do a good job of those things that we decide to do, we must eliminate all of the unimportant opportunities.” Steve Jobs was possibly one of the most focussed, driven men on the planet. His turnaround of Apple when he returned was testament to this trait.

Impute: This emphasised that people form an opinion about a company or product based on the signals that it conveys. As Markkula explained to a youthful Steve Jobs, “People DO judge a book by its cover. We may have the best product, the highest quality, the most useful software etc.; if we present them in a slipshod manner, they will be perceived as slipshod; if we present them in a creative, professional manner, we will impute the desired qualities.”

 
These 3 became known collectively as “The Apple Marketing Philosophy”. It worked pretty well for Apple so should be well worth considering for your own organisation

Support or Die

Microsoft recently posted some stats that broke down the average business software system costs. The most interesting stat was that the actual purchase of the software represented about 5% of the overall system cost and expenditure on hardware was roughly the same. That probably comes as a bit of a surprise to many but, if you examine the figures, it's actually pretty self-evident.

A business purchasing a new ERP system will expect to get somewhere between 6 and 10 years out of their new software. We have many customers who have been on Navision with us for at least as long as that, and a number who have been with us since the 90's so we concur with Microsoft's findings.

Over that period, the majority of the expenditure will be on annual support charges and people costs - installation, training, ongoing development and so forth. So, extrapolate the numbers over the life of the system, and the initial costs of buying the software and hardware quickly drop to a fraction of the total expenditure.

Software companies who understand this should also understand that if they fail to provide good levels of support or be perceived as not providing value for money, then all of the good work done in winning the initial sale will be for nothing. Microsoft also revealed that the average time to win a new software site was 6 months. That could be 6 months hard work wasted if someone else picks up the ongoing revenues.

Looking after customers and constantly monitoring feedback of our services is a fundamental element of our business plan. It has served us well bringing us well over 100 Navision sites and the income from those is set against the cost of a dedicated support department and support systems to ensure we maintain satisfaction levels and customer numbers.

The result is a strong and loyal customer base and a regular stream of defections from competitors. Someone somewhere spent 6 months winning those customers but then passed on the revenue stream to us. Not good business and certainly not sustainable.

Economic Indicators Just Got Weird... But Oh So Credible!

The Economist recently reported a raft of 'alternative' recommendations on how to gauge upcoming economic conditions. One reader suggested monitoring the sale of suppositories as "financial worries and austerity changes in diet cause intestinal disorders".

Meantime, a vet reports that he believes he's six months ahead of the market as he pays attention when pet owners start to cut back on non-essential ops for their little furry loved ones.. if neutering ops start to drop off, start selling those shares.

Others think we should be watching the hairdressing world. A rise in the use of basic barbershops combined with  news that sales of badger bristle brushes are going through the roof is apparently a result of a return to old-fashioned masculinity as a response to troubled economic times.

Me, I preferred a more telling sign. Edward Ritchie, an investment analyst, tracks some particular Google searches. His analysis of the search term 'gold price' indicated a worrying correlation with the peaks and troughs of economic uncertainty in the US. And, what's really scary is that the searches are now way beyond the previous peak in 2008, a portent of a double dip to come.

For Turnkey, in the world of business software sales, the indicator we look for is more basic. While our new business sales continue to show year on year rises that defy the doomsayers, an ever present discussion point is annual support and, in particular, does it represent value-for money? The more people querying support, the more likely that times are tough and likely to get tougher.

Fortunately, we keep a very detailed log of work performed for clients and can provide chapter and verse on the services provided in the last 12 months. This confirms that the support contract is an essential not a luxury. And our cancellation rate on support is the best in the business i.e. non-existent!

Sage Line 100 Being Dropped - farewell old friend but buyers beware..

Sage has announced that Line 100 is being ditched, dropped, dumped, kicked into the long grass and generally written off as being of a bygone age. As of September 2012 it is, to borrow an old line, an "ex-product".

This should not come as a great surprise to many. I mean, how many software packages can a company support before its own support people, never mind the thoroughly baffled and overworked support teams among the reseller base, cry out - "Enough is Enough"?

For their customers, no doubt we will see a stampede of discounted offerings as Sage resellers rush to fill the gap. 20% is the going discount rate to move on to another Sage product. But users should resist the temptation to simply accept the next offering (a mistake many make when renewing car insurance, for example) and should really take a long, hard look around them. The buyer should be very careful. To extend the car analogy... trading cars usually involves the customer trying to establish the net cost of his new shiny vehicle while the car salesman does his or her level best to baffle the customer by proposing a simple £x per month figure which extends 3 or 4 years into the future (and may even have a nasty big final payment). And so it will be with the Sage 'upgrade' paths.

So, I would be extremely surprised if the established industry players such as Microsoft, Pegasus etc don't offer similar discount terms off their products to trade-in that old Sage system. It's a great opportunity to poach existing Sage users into their fold.

As a Microsoft Dynamics NAV reseller, I'm obviously keen to push that product and its differentiators which, if we talk competitiveness v Sage, are many. Here are a few off the top of my head:

1/ Buy one user and you buy one of the most extensive, function-rich accounting suites available (no seperate costs for Accounts and CRM). Value for money.
2/ Add users one at a time. No requirement for 5, 10, 15 etc. Great for cashflow.
3/ Buy 'lite' web users for less than a 10th of the cost of a full user. Customers have to start thinking user types, not just numbers, when they buy a new system. We often have twice as many low cost web users inputting POs or time/expenses via the web as full users. Use low spec PCs and save even more money.
4/ It's Microsoft - so it's fantastically well integrated with Office, Windows, Sharepoint etc. Future proofing? In the computer industry? How novel!
5/ It's Microsoft - so they're investing massively. Software development costs exceed the combined turnovers of their UK rivals. How long will their smaller rivals last?
6/ And, we don't demand that  you sign up for three years support - it's always baffled me that customers accept such stringent contracts from suppliers, especially those they have barely met! Trust me, I'm a software saleman?

So, think again before accepting that wonderful Sage upgrade deal. There are some rather tempting alternatives out there.

To help you decide, we have an unbiased  guide to selecting a new accounting system. Just drop me a line at stephen.malloy@turnkey-bs.com and I'll send you a copy. It's free, and it might just save you a few years sleepless nights.

Office 365 and MS Dynamics NAV Getting Closer?

A recent post at MSDynamicsWorld.com cast some light on when and how we might see NAV reach the clouds.. at no extra cost to NAV users.

Microsoft Dynamics NAV made its first move to demonstrate viability with Office 365. At the Directions EMEA conference, Microsoft announced a new version of Equisys's Zetadocs for Dynamics NAV, dubbed Zetadocs Express, that will work with Dynamics NAV in combination with Office 365.

According to Andrew Levey of Equisys, Zetadocs Express will be delivered as a downloadable module in October 2011. The module will allow customers to capture inbound documents via a drag and drop interface for storage in SharePoint online, and also email documents from NAV.

The module will be no additional cost for customers on a Business Ready Enhancement Plan with a Microsoft Office 365 subscription.

Customers will then be able to upgrade to the Essentials and Plus editions of their Capture and Delivery modules to gain access to more advanced functionality, as well as customisation and automation opportunities.

And so ends another year at Turnkey. A success? I think so.

In a year when the doom mongers were talking down the industry, we've just had our best year ever.

New customer adds well up on last year. Revenues up, margins up and levels of optimism well up. And looking forward, we've a steady order book which takes us well past Christmas.

So why are we doing so well when others in the IT industry all around are muttering darkly, tightening belts and predicting the end of the world?

If pushed to give a one word answer, I'd say 'care'. We might not get it right every time but customers, both old and new, know that we care and we want to do the right thing by them. So, even when we hit a blip which is invariably caused by work arriving in the occasional deluge rather than an easily-managed steady stream (chance would be a fine thing) they stay resolutely supportive.

Thus as new sites come on board, upgrades are requested, support calls and development requests arrive by phone, fax, email and the web support portal, we can find ourselves apologising as we seek to re-schedule. But as long as we show we do care about getting it right and communicate that sense of caring, customers are very forgiving people.

Ups and downs in service are tolerated and even recognised as inevitable to some degree, but any sense that nobody cares is not.

The proof of the pudding? In the last 5 years, I can recall only one site that felt moved to take its support elsewhere and 10 times that who have moved to Turnkey. In this industry, these are exceptional statistics.

Try Curling in the Workplace! Turnkey did!

I’ve just won my first ever curling competition as a ‘skip’. 7 teams fought out a league, 4 reached the semis, and my team, with me as ‘skip’, eventually triumphed in the final. Joy oh joy unbounded!

If you’ve ever chanced upon a curling match on television, you’ll have seen the skip. He’s the guy standing at one end of the rink calling the ‘plays’ and screaming at his team to sweep or not sweep the stone as it slides down the ice towards the ‘house’. The house being the various coloured circles in which your stones and the opposition’s stones nestle. The more stones you have nearer the centre of the house, the more points you gain. ‘Marbles for grown ups’, my wife calls it.

There are four players in a team. The skip is normally the best player, and the first or ‘lead’ player is generally the weakest in the team. Though, whenever you play lead, a good skip will always enthuse about the key role that the ‘lead’ plays in building each ‘end’ i.e. each player throws 2 stones, 16 in all, makes one end of curling and a match will consist of 7 or 8 ends.

Why on earth am I blogging about this, rather than some business thing? Well, because there are parallels with coaching the sales staff and building their skills and confidence. This particular league competition is about reversing the normal rules of curling so that the not-so-good player has the opportunity to skip the team and develop his skills. I might normally play at lead or at second which, within my club of very experienced players, is my real level. But, by letting me skip and giving me a very experienced skip to play at 3 alongside me and offer advice, my playing skills and overall understanding of the game are improved. And, who knows, maybe one day I will be a ‘real’ skip?

We should all be looking for opportunities to take this into the workplace. For the next sales meeting you have with a prospect, take along one of your sales team and see if you can sit back, bite your tongue and let them lead the meeting.

And, only if things are going slightly awry should you find yourself screaming at the top of your voice - SWEEP!!