Medify basically collects these databases in one place and allows people to search on the exact criteria they are looking for.

Source: Medify

Streat decided to go after the consumer market as a B2C play – the need was clearly there for patients and their caregivers. At that point the question became which medical conditions to focus on – such as Alzheimer’s, asthma, autism, breast cancer, kidney disease, leukemia and lymphoma – so they could build out their databases accordingly. Their VC was strongly encouraging them to focus on one of these segments as an initial target audience.

Startups have a particularly urgent need to get the target right for their innovation, because it affects how they build out their product or service, and they have to show results before they run out of money.

But sometimes its hard to evaluate which target is the most viable. There are often many to choose from.

A framework for thinking about targets

Here is a framework I developed with my various clients over the years to help startups assess the attractiveness of possible targets.

The high level criteria required for a viable target are straightforward:

The real power in the framework is that it allows you to build out each of these four buckets with further qualifying criteria to suit your business situation, as in this example.

When you find you have two or more equally viable targets, consider what the tie-breaker criteria should be. For startups, it’s often how quickly you can get to market. If you are concerned about showing traction to your investors, a medium-sized target that is willing to buy now is more attractive than a large target that requires a lengthy sales process.

In Medify’s case, once we spoke with the physicians, hospitals, insurers, drug manufacturers and advocacy groups who made up the health care ecosystem, and aligned our findings against this framework, it became clear which conditions – and therefore which target segment – had the most potential for their innovation.  Once they landed on this, they could solidify their value proposition and build out their product offering.

I look forward to hearing your thoughts.

This post was originally published by the American Marketing Executive Circle.

Amazon has been in the news a lot lately, and rightly so. It’s fascinating to be sitting in their back yard where I get to see some of these innovations for myself.

In early 2017 they announced an experiment with Amazon Go, a cashier-less store of the future which hasn’t opened yet due to technical issues.

(Source: Recode.net)

They are also experimenting with formats that allow customers to buy their items online, schedule time slots to pick them up, and drive to the pickup location where employees will deliver orders to their cars.

(Source: Seattle Times)

And in June Amazon introduced their Dash Wand with Alexa which lets you scan the bar codes for the items in your fridge, or just call them out – mushrooms! – to save to your shopping cart. It even helps you figure out what to do with the food you already have.

And when Amazon announced they would acquire Whole Foods for nearly $14B it sparked a whole lotta news.

Amazon’s latest acquisition of Whole Foods: a few industry perspectives

Local high tech publisher GeekWire’s story by Todd Bishop speaks to how the Amazon acquisition of Whole Foods grocery chain dramatically expands their physical retail footprint.

Felix Richter’s article in Statista speaks to the opportunity for Amazon to use Whole Foods’ distribution and procurement network to boost its online grocery offerings, to further penetrate the U.S. online grocery market – currently the ecommerce market for fast-moving consumer goods (FMCG) sales in the U.S. is only 1.4%, compared with 16.6% for South Korea.

A recent NYT article by Claire Cain Miller speaks to the acquisition signaling the end of the line for many cashiers.

And the Harvard Business Review article by Bill Taylor on Amazon, Whole Foods, and the Future of the (Old) New Economy offers a very thoughtful look at what the deal says about the future of an approach to business, branding, and organizational culture that Whole Foods and Amazon have come to represent.

I think all of these perspectives are valuable, but so far I have not seen anyone comment on what all of this means for the customer experience. As marketers I imagine we are all thinking about this question. So here is my take, and I welcome your thoughts:

4 marketing strategies Amazon seems to be following: a consumer perspective

The Amazon mission statement makes it clear what drives them – it’s serving consumers:

“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

I’m seeing this mission statement brought to life in a few ways:

1. Making Prime more valuable so more people sign up

Just as Gillette once priced their razors low so they could make money on razorblades, Amazon is looking to drive penetration of Prime membership so they can make money on what customers order. Part of the way Amazon markets Prime is by making this membership simple to get. But they are also working to make Prime more valuable, for example, if you sign up for Prime you’re the first group to get access to just about every new device or service they offer.

This includes getting Whole Foods products delivered to your doorstep.

Grocery is not in itself an attractive category – the margins are terrible. But offering grocery as a new category for home delivery increases delivery frequency, and once customers are ordering groceries regularly they’re also throwing in other products, which is attractive.

2. Lowering costs to consumers

When Amazon got into the e-book business they dropped the price to such a low level it put at least one publisher out of business.

Some analysts are already talking about the possibility of Amazon doing this for Whole Foods products.

3. Eliminating friction from the buying process

Consider everything Amazon has pioneered or pursued to make it as easy as possible to buy something from them online: low prices, one-click shopping, easy checkout, easy returns, free shipping.

In store they are experimenting with skipping the cash register entirely. With the Amazon Go app you’ll no longer need your wallet.

With the Dash Wand with Alexa you don’t need to write down your shopping list.

It wouldn’t surprise me if Amazon closes deals with smart refrigerators using Internet of Things (IOT) to automatically reorder your groceries for you, through Amazon of course.

What this eventually all adds up to …

4. Eliminating thinking altogether?

Every marketer works hard to build top of mind awareness and strives to get into the considered set. Amazon is working hard to become the only company you think of when you buy anything.

As a Prime Member, I now default to Amazon when it comes to buying online. After all, I have already paid my $99 for “free” shipping. No matter that this is a sunk cost: psychologically, I’m still trying to get more return from that investment. Amazon is happy because I’m finding new things to buy. I once used my Prime Membership to buy potting soil.

Yes, Amazon sent me dirt.

If you’re not at the table, you’re on the table 

So what does this mean for marketers? Here are 3 resources to help you understand Amazon and what it might mean for your business:

1. John Rossman’s blog is a great place to get a former insider’s perspective on Amazon’s strategy. In talking to him my sense is that he still has a great finger on the pulse of how this company thinks.
2. To stay on top of what Amazon is doing, a great resource is GeekWire.
3. To see what Amazon is about to do, a great resource is CB Insights, which uses their patents search engine to track Amazon’s intellectual property efforts.

While every situation is different, here are 3 strategies to consider if your company lies in the path of Amazon:

1. Hunker down. Prepare for the long haul. Right now Nordstrom, after taking a beating from Amazon, is talking about going private. My guess is, they expect a battle and don’t want to be distracted by pressure to make their quarterly numbers.
2. Double down. Amazon can sell a lot of things to a lot of people, but they can’t sell everything to everyone, much as they would like to. What is it your company does better than anyone else, for a particular audience? How can you become the top of mind choice for this group?
3. Reconsider your options. What business are you really in? Look at this not from the perspective of what you’re selling (buggy whips: product – oriented) but from the perspective what people are buying (transportation: customer – oriented). Ted Levitt’s famous Marketing Myopia article is even more relevant today.

I look forward to hearing how you will be responding!

This post was originally published by the American Marketing Executive Circle.

(Main photo source: Geekwire)

Their Idea to Plan innovation workshop is geared towards UW researchers who want to commercialize their work. It focuses on the problem to be solved, the customer segment, the market reach, and the value proposition of each teams’ innovation. The final session concludes with the development of a business pitch. Throughout the process each team is supported by Entrepreneur In Residence mentors.

I’d presented on value propositions at CoMotion before, as part of their Fundamentals for Startups series. In preparing for that session I wanted to understand what different frameworks were in use, as I have found nobody seems to agree on exactly what they should include. I went through my personal files, conducted a literature search, checked out previous UW presentations and found some great examples:

You have almost certainly heard of the framework articulated by Geoffrey Moore in Crossing the Chasm:

For (target customer – beachhead segment only)

Who are dissatisfied with (the current market alternative)

Our product is a (new product category)

That provides (key problem solving capability).

Unlike (the product alternative)

We have assembled (key whole product features for your specific application).

Michael Skok, Partner at _Underscore.VC, and Entrepreneur In Residence at Harvard Business School, builds on Moore’s framework and extends the discussion on value propositions in an excellent article in Forbes. His version is a little shorter:

For (target customers)

Who are dissatisfied with (the current alternative)

Our product is a (new product)

That provides (key problem-solving capability)

Unlike (the product alternative).

Steve Blank, Silicon Valley serial-entrepreneur and academician and launcher of the Lean Canvas movement, uses an elegantly simple sentence:

“We help X do Y doing Z.”

All these frameworks are useful, but one of the things that surprised me was what many value propositions didn’t include.

What about emotional benefits? What about costs?

When I worked for PepsiCo we were trained to express our value propositions in terms of emotional benefits, and how those in turn could tap into fundamental need states. One example is Pepsi tapping into teens’ desires to forge their own identity by positioning Pepsi as the soft drink of choice, thus repositioning Coke as the default drink for adults. The science is beginning to show that all decision makers are influenced by emotional and often unconscious factors, so it makes sense that all companies consider this.

We were also taught that a value proposition answered the consumer’s question “What I get versus what I pay” – this price can be time, money, perceived risk, potential loss of face, etc.

Think about the last time you bought a car, for example.

Did you say to yourself, Wow, this car drives like a dream, I’ll take it.

Or did you think, Boy I love this car but it’s going to require a lot of maintenance and my spouse will kill me if we have to bring it in all the time. Is this a smart decision?

Neither emotional benefits nor “price” was reflected in the value proposition statements I was seeing. So I developed a version that did:

For (target customers who have a problem – include their emotional struggle)

We offer a (category you compete in/with)

That delivers (benefit – emotional or functional)

Because (reasons why they should believe you – specific proof points that differentiate you).

All that’s required is (what the customer pays in price, time investment, risk, etc.).

As you develop that one, crisp value proposition statement that will galvanize your organization and help you attract investors, you’ll want to choose the framework makes the most sense. If your audience is wedded to a particular framework by all means use it.

But don’t let that stop you from innovating and create a framework of your own, even if you have to do it in the privacy of your own office.

Six questions to consider

1. What are the emotional and even subconscious benefits of your product or service? What fundamental need states can you tap into?
2. What is the mental and emotional price you’re asking your target audience to pay, and is their internal ROI high enough for them to take action?
3. How does your value proposition vary for different target market segments?
4. What are the value propositions for your purchasers, end users, channel partners, and any other stakeholder groups you need to satisfy?
5. What’s the value proposition for the individuals who need to say yes – your Sales team is certainly thinking about this. Are they heroes at budget time? Do they risk losing their jobs if they buy your product or service and it doesn’t deliver as expected?
6. How does your value proposition change as people buy and use your product over time? Buying a gym membership is a lot different than going to the gym. Just sayin’ …

Anyone who would like to see my value proposition presentation, feel free to download it from my website. I would love to hear from any of you who are exploring this question.

This post was originally published by the American Marketing Executive Circle.

Nordstrom has a long standing tradition of high-touch service, but what you might not know – unless you happen to be a customer – is that this retailer is not afraid to experiment with technology and marketing innovation.

Every July Nordstrom holds their Anniversary Sale, where you can shop for fall fashions now.  Anyone who shops at Nordstrom knows that this is an incredible sale. (Full disclosure: Nordstrom is a client and former employer.)

Nordstrom could have continued to promote their Anniversary Sale the way they always have:  Through catalogs, email campaigns, personal calls from sales people—you get the picture.  And they’re still doing that.

But this year Nordstrom’s social media team had a crazy, fantastic idea to install a 14,000 square foot Instagram post on the roof of their flagship store, featuring a 55-foot tall representation of a Leith dress from the sale (complete with a 25 foot hanger!) and send a drone over to record it.

Whaaaaa?

Here is a screenshot of what the drone saw, and the conversation this stunt prompted:

Why I like this marketing innovation

This marketing innovation promotes the sale by reaching one of Nordstrom’s important target audiences in a way that fits their media consumption habits.

“We created this gigantic Instagram post to generate awareness about the Nordstrom Anniversary Sale, our biggest sale event of the year.  We hope to create experiences that allow our customers to move seamlessly between digital experiences like Instagram and our physical stores.”

– Bryan Galipeau, Director of Social Media for Nordstrom

One of the first permitted drone projects in Seattle, this stunt is fun, newsworthy, and shareable, which means more people will learn about the sale from their friends, the most persuasive “media” of all.

High tech competitor Amazon has made no secret of the fact that they want to deploy drones to make deliveries some day.  Nordstrom could have seen this emerging technology as antithetical to their service model, but instead they went for it.  Using a drone in this high profile promotion shows their willingness to combine technology and fashion—their way.  This helps keep the company relevant to a younger, digitally savvy audience who represent their long-term future.

It is a win from both a short-term promotion and a long-term brand building perspective.

Key takeaway

When you see an emerging technology that appears to run contrary to your business model or brand, consider instead how to co-opt it and make it yours.

And don’t be afraid to buzz your neighborhood.

What marketing innovation has inspired you lately?

This post was originally published by the Marketing Executive Networking Group.