It’s the unknown unknowns that get you! Using marketing technology as an example, we examine ways of exposing unknown software needs and evaluate the urgency of satisfying them.
While internal growth can drive companies to make major software purchases, another driver is external growth. Internal growth refers to a company growing organically through new customers, by mergers, acquisitions and so on. External growth refers to a company operating in a growing environment, and is occasionally described with the phrase “A rising tide lifts all boats.”
Marketing technology is one such example of a growing environment, and it is spectacularly illustrated by Scott Brinker and his annual Marketing Technology Landscape Supergraphic. In 2011 Scott listed about 100 marketing technology companies on a single page in graphical format. Every year since then he has updated this graphic, and in 2016 it contained 3874 companies. That is an astounding 108% growth compounded for five years in the number of marketing technology companies.
Marketing problems many people didn’t know existed a few years ago now have several vendors offering competing solutions. Companies operating with more traditional marketing models are faced with competitors using marketing technology to overtake them. External growth in the marketing technology field is driving software purchases.
Using marketing technology as an example of a growing environment, let’s take a look at how needs awareness and urgency drives these software purchases, most of which are in the cloud. To get feedback from the field, I discussed this with my daughter, who is in sales at Tealium. Tealium’s technology provides a real-time unified view across all customer touchpoints, allowing marketers to create comprehensive profiles that drive better customer experiences. We were discussing how her customers discover their needs, and how they assess the urgency of their projects.
Finding unknown needs
Internal growth is evident to a company, but external growth can take them by surprise. Here a company might have a software need and not even be aware of it. There are several ways to discover these unknown needs:
- Competition. Examine your company’s position in the market compared to competitors. Have you been losing market share over the last year or two? Or, more subtle, have competitors been growing faster than you have? In either case, discovering why this is happening is likely to expose a need.
- Planned performance. Compare your company’s performance against plans for the past year or two. Has performance been on target, or is there a significant gap between plans and reality? And if plans were too optimistic, what are the reasons?
- History. Compare the current performance of your company with recent history. Has growth started to level off, and if so why? Is your market approaching saturation, or is your company being overtaken by competitors making better use of marketing technology?
- Diagnostics. For example, when surveyed, what do your sales team think of the company’s thought leadership versus what do your customers think? If this diagnostic reveals a big gap, there is an unknown need waiting to be exposed.
- Software feature examination. For any given set of potential marketing technology products, look at the features of those products. Do any of those features cause you to have an “Aha!” moment, where something you had not given much thought to suddenly jumps into focus?
The rising tide of marketing technology gives companies unparalleled tools to solve marketing problems. Any company not constantly trying to expose unknown needs risks being overtaken by their competition. The longer those needs remain undiscovered, the more opportunity competitors have. This is the perfect segue into examining the urgency of the problem of external growth.
Once a company has discovered a software need, the question becomes one of how urgent is resolving the problem and satisfying that need. The way to understand urgency is by examining consequences and implications.
Extrapolate trends and look at what is likely to happen if a need is not satisfied soon. Will the problem get worse? If it is left for 6 to 12 months, will it be too late to recover? Although it is not marketing technology per se, an excellent example of this is Netflix versus Blockbuster. (Disclaimer: I worked for Netflix in 2004). Blockbuster was unable to see where technology was taking their market. When trends became obvious to all, it was too late for them to recover. They went from a market cap of about $5 billion in 2004 to filing for bankruptcy in 2010.
Any investment in marketing technology will have a rate of return. Will that return grow or shrink with time? If the return shrinks with time, e.g. as competitors start using the technology and eroding the advantage it brings, you want to make the investment as soon as possible to maximize that return.
Look at companies similar to yours in comparable situations, even if the technology in question is different. For example, have companies who avoided new marketing technology seen market share slip? Is this an opportunity to seize a marketing advantage?
Look at your history. In the past, have you suffered a disadvantage for “arriving late at the party”? This could suggest your team is not appreciating the urgency of those decisions.
Without regular checking, a company may not even be aware of software needs driven by external growth. Once they do become aware of those needs, the next question is how urgent is satisfying them. When it comes to the cost of satisfaction, see why value trumps price.
When an environment moves as fast as marketing technology has moved for the past five years, there may be a lot more urgency to recognizing unknown software needs than many companies realize. Since a rising tide lifts all boats, be sure you are not left on the bottom of the harbor.
Acknowledgment: The needs and urgency considerations in this article are based on the work of David A Fields of the Ascendant Consortium.
This article was originally published on CIO.com on April 25, 2016