Marketing software: The challenge of selling an “invisible product”

I'd like to share this blog with you that I originally posted on the Toronto-based Financial Post's Executive Blog: http://network.nationalpost.com/np/blogs/executive/archive/2009/02/17/marketing-software-the-challenge-of-selling-an-invisible-product.aspx

Tell me what you think!

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Have you ever tried selling something people can’t see, or feel or taste? It seems that marketers have made an art of selling the “invisible” qualities of visible products: a perfume commercial, for example, barely mentions the actual scent of the product or its liquid form. Instead, it promises to turn you into an elegant, irresistible man or woman. The same goes for packaged foods that offer vitamins, minerals and antioxidants that you can’t really see… you have to take their word for it. But in both cases, you have a very real product to see and touch. Even services can be perceived clearly by the senses: think customer service at a bank or five-star hotel, for example.

But what happens when it’s the other way around: when the product is invisible and all you have is the experience of using the product? This is the case of most software products, which have a world of advantages, but to the naked eye appear as pages of indecipherable code.

You may think: “But I do see the product! I’m looking at my computer screen right now!” Well, the truth is that you are only seeing the very surface of the product, or the interface. It is the part of the program that lets you interact with it: buttons, scroll bars, pretty icons… they are your experience of the program, but the real value of the product is the programming behind it.

Because of this, it is hard to market many software solutions, especially when they don’t have the Microsoft logo on them. Small companies selling software have to begin by trying to explain to ordinary consumers or non-IT business clients why their solution is really valuable. In some cases, the interface can be similar to a rival product, so the client thinks it is practically the same, and only decides on price. It can be difficult to explain why there is a price premium, especially if the better qualities aren’t easily perceived by the user.

Because of this, creating a polished and user-friendly interface is so important. Trying to explain the technical benefit to the users is often a lost cause. What you can do is show them how it will work for them and making sure that they can easily experience it.

Another challenge about marketing high-tech products is deciding whether to innovate around the client’s needs, or to just let the inventor’s creative flow decide what to create and risk having a marvelous product that does not immediately fit with a particular user.

Last month I attended a speaker event hosted by the British Columbia Technology Industry Association, which included three BC companies that have achieved big success in the past years: MDA, MailChannels and BuildDirect. Their products have been successful because they are real solutions to real problems. But they also raised an interesting topic: sometimes you just have to make something that doesn’t make clear sense at first and then create the need for it. This is the case of some of the most successful inventions of history. For example, no one imagined that electricity could be useful. Candles worked well enough to light homes, and fireplaces brought warmth to the homes. It didn’t follow a “trend” of inventions, like the mp3 player has followed the portable cassette and CD players. Looking back, it seems like we couldn’t live without it. From our kitchen appliances, phones and TV sets, we depend on electricity for almost everything we do. But who could tell someone in the late 1800s that they needed a TV set or a computer? All they could see was a small light bulb that didn’t light much better than their lamps and fires. But it could be turned on with the flip of a button and there was no need to keep buying oil.
The advantage of this creative approach is that this allows the inventor to be openly creative and not restrained by certain needs. If marketing research is not done properly, it can also be misleading and generate as many losses as not having done any research at all. But in many cases, not tailoring products to users can be a huge mistake. This is the cause of many of the thousands of product failures that occur each year. If you are curious to know about them, just Google “product flops”. You’ll be surprised on how many major brand names are behind product flops, many of which are the result of bad marketing research (New Coke is the typical text-book example).

What is the best approach? It depends on the individual product and if the new invention could eventually satisfy a real need, even if it was not catered to one initially. “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole”. This quote by Theodore Levitt is a classic in marketing education. So even if your innovation is completely new and different, if it can open the quarter-inch hole, even if it isn’t a drill, it might still be successful.

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What do you think? I would like to hear your opinion on the topic, especially if you are in the software and high-tech industry.

Bolivarian Dictatorship of Venezuela

In 2000, when Chavez changed Venezuela's Constitution (among other things to allow for reelection and a longer, six-year term - as opposed to the single, 5-year period in the old one), he changed the country's name to The Bolivarian Republic of Venezuela (it used to be called simply the Republic of Venezuela).

Today, as democracy made its last gasps, we walk into a new phase in the country: The Bolivarian Dictatorship of Venezuela.

May the history of a free country, one of the richest and with most progress in South America, and the oldest democracy in that continent, rest in peace...

Democracy or Dictatorship? We'll know on Feb. 15

Understanding Hugo Chavez is no easy task. He is charismatic and colorful in the eyes of many, cruel and a megalomaniac to his enemies. Unlike the traditional image of a president, he is unpredictable. He has his own radio and TV show, which can last over 7 hours, and he loves to interrupt regular programming to speak for hours about his hate for the "Empire" (the US government), surprise measures to control every area of the economy and to nationalize industries, or to remember his childhood days in a rural area in southwest Venezuela.

Today, the government of Venezuela declared a national holiday to commemorate his 10 years in power. It's been a long 10 years. The country has passed from having one of the most prominent oil companies in the world (state-owned PDVSA), to seeing its oil production fall considerably after Chavez fired 20,000 employees from the company because he considered them enemies of the "revolution". He has survived a coup and several national strikes, the longest of which lasted two months and crippled the economy. In these years he and his followers have sucked up the country's resources and he now controls almost all the institutions of the country, including the Supreme Court, the National Assembly, the Attorney General's Office and many regional government posts.

But ten years in power is not enough for him. Since he came into power, he has been announcing longer stays in power. One of his first moves in power was to change the Constitution, which now allows for one reelection and stretched the presidential period to 6 years. But that is not enough for him. He has organized a referendum on Feb. 15, when Venezuelans will vote for indefinite reelection. He has already been hit hard in the last elections for regional posts, where the opposition won the major states and municipalities in the country.

I've been asked many times if Venezuela has a democracy or a dictatorship. It is hard to answer. I usually say a "democracy". A true democracy would imply separation of power and rule of law. Chavez controls almost all the institutions in the country and is known for implementing highly questionable rulings to suddenly nationalize private enterprises, close TV channels and put political prisoners in jail. However, some opposition leaders still campaign publicly against him and some are now in office in state and municipal government.

But my answer could change completely on Feb. 15. If Chavez wins the election, he will stay permanently in power. A lifelong ruler, even if chosen by vote cannot be considered a democratic leader.

I believe that Chavez's rule has taught us much about the country, about the needs of the poor and about taking freedom for granted. Chavez has taught Venezuelans to hate themselves in a way that we had not known since the war of Independence in the early 1800's.

But it's time to see something new. I dream of seeing a day of change in Venezuela. Obama's inauguration made that dream even closer to my heart. Will that day come soon? We'll know on Feb. 15.