May 2008 - Posts

The Most Common Marketing Mistake: Advertising = Marketing
Published 28 May 8 4:0 AM | Aaron | 11 comment(s)

Four Steps to Understanding Your Market

Advertising and promoting are important marketing tactics but they are not nearly as crucial as the process of understanding your market.

Marketing is like hunting - advertising is a lot like firing your gun at your target, but just "firing your gun" doesn't do you any good if you don't know where the game is. Understanding your market is how you determine where the game is.

When you sell a product or service it is critical to understand:

  • What problem does your product solve?
  • How does your product compare with the competition?
  • Who will buy it and why?
  • How will you reach them?

The answers to these questions determine whether your product can succeed and if it can, how best to generate sales. For any start up business or new product introduction you can save yourself a lot of wasted time and money by answering these questions before you develop or bring the product to market.

When I think about launching a new business project (my background is in web-based software development) I answer these questions to determine if my end product will be marketable enough to justify the production costs.

Here are the four steps that I take to answer these questions:

1. Break Down Your Unique Selling Proposition

Your unique sales proposition defines the perceived value that your company and your product will add to a customer's life should he or she choose to purchase it. In order to properly define the value that your product adds to your customer's life, you need to determine what problem your product solves for the customer; I make this determination using a Selling Proposition Chart.

A selling proposition chart is a simple step diagram that asks four questions:

  1. Who do you want to sell to?
  2. What do they need?
  3. What are the problems with current solutions for filling this need?
  4. What is your solution?

Let me show you a quick example - I'll be writing a full post on this soon so I don't want to go into too much detail, but here's a peek at the selling proposition chart for SmartDraw - graphics software.

  • The market for SmartDraw is Microsoft OfficeTM users.
  • The need it meets is for creating business graphics like flowcharts and organization charts.
  • The pain it relieves is that graphics software is too difficult for most people to use because it relies on their ability to draw.
  • The solution is to automate the creation of business graphics so that no drawing is required.

SmartDraw 2008 Users: If you want access to the Selling Proposition Chart templates you will need to download the latest content pack for SmartDraw (1.9 meg.)

2. Determine How to Position Your Product Against the Competition

The selling proposition chart helped me determine what problem my product solves and it also helps get me started comparing my product to the competition. However it doesn't go far enough - I need to not only compare my product against the competition, but I need to determine how to position and differentiate my product from the competition.

I use a Positioning Matrix to figure out where my business lies compared to the other competitors in my market.

A positioning matrix has two perpendicular axes and hence four quadrants. The idea is to choose each axis so that your product exists on its own in one quadrant. This defines your unique position in the market. The axes also have to be relevant to customers.

I'll use SmartDraw again as an example:


The pain (from your selling proposition chart) that your product removes starts to answer the questions about how you compare with the competition. The "pain" is usually a drawback of the competition that your product eliminates.

3. Refine Your Target Market

SmartDraw's target market, per the ongoing example, is "Microsoft OfficeTM Users." When you think about it, an "Office User" can be any one out of millions of people - in order to build a foundation for a realistic marketing strategy I'm going to need to refine SmartDraw's target market to something a bit more specific.

For this exercise, "target market refinement," I am going to use a Market Focus Diagram.

A market focus diagram is a Venn diagram consisting of overlapping circles that represent market segments that may overlap. In my SmartDraw example below I show a large circle for the whole Office market and smaller circles for those segments that are managers and people who make presentations. Both of these segments have a real need for business graphics. The overlap of the two represents the users with the biggest need.


4. Plan Your Sales Campaign

Notice that I didn't say "advertising campaign." Before you start thinking about advertising campaigns or promoting campaigns you have to consider how your customer will go from hearing about your product to actually purchasing it, and roughly how many of them might end up purchasing it. A typical sales process goes through four stages:

  • lead generation;
  • qualification;
  • proposition; and
  • closing the sale.

A true sale campaign takes more than four steps (there might be many steps for a single stage,) but ultimately you still need to determine how you're going to transition a potential sale from "lead generation" to "closing the sale." Not only do you have to determine the sales path, but you're also going to have to determine how many of your potential leads make it from one step of the sales campaign to the next.

You have to determine how many leads will realistically convert to customers - only then can you start performing realistic cost justification analysis for future marketing campaigns.

Thus I use a Sales Funnel. In the example below I use "direct mail" as my starting point for lead generation:


Each step should be quantified: What percentage of names on a list result in an inquiry? How many inquiries lead to a proposal? How many proposals lead to a sale? How much revenue is generated from each mailing?

Describing sales as a process makes it easier to identify ways to improve it. If too few inquiries are coming in (at opening of the sales funnel) then the first steps involving the mail piece design and list selection are at fault. If too few proposals lead to a sale (further down the funnel), perhaps pricing is a problem.

Once you learn the average number of leads that result in a proposal and the number of proposals that result in a sale, you can forecast sales much more accurately by looking at the number of potential customers in each step of the funnel.

Those are the four steps that I take to understand my target market, and I will be publishing more posts and screencasts on these four tools in the upcoming month.

SmartDraw 2008 Users: If you want access to the Sales Funnel Chart templates you will need to download the latest content pack for SmartDraw (1.9 meg.)

Download a free trial of SmartDraw.

 

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Four Techniques I Use to be a Better Manager
Published 22 May 8 4:0 AM | Paul | 2 comment(s)

When I founded SmartDraw.com I was a software developer not a manager. Not that this mattered much because the only person I needed to manage at the time was me!

As the company grew, management was "thrust upon me", and I learned four techniques I still use to manage people and projects effectively.

1. I Organize my Thoughts with a Mind Map

I'm a visual thinker (as you might imagine) and I use a mind map at the start of any new project I am working on to organize my thoughts and ideas.

A mind map is a visual outline. Using SmartDraw of course, I just dump out my ideas onto the page and then re-arrange them into logical groups. I use SmartDraw's keyboard shortcuts and automatic formatting I find this even easier to do than using Word to make a traditional text outline.  Here's an example of one of my mind maps.


Watch my screen cast on drawing mind maps with SmartDraw too.

2. I Organize my People with Organization Charts and Team Charts

There are two ways we are organized at SmartDraw: into a traditional reporting hierarchy and into teams for specific projects. I use the traditional top-down org chart for the former and a team chart for the latter.

Your company organization chart is actually a device for showing positions and their responsibilities rather than people. Sometimes in a small company one person may be the "incumbent" for more than one position. I have written about this in a previous post.


A team chart is an effective way of making sure everyone working on a project knows what part of it they, and the other members of the team, are responsible for and what's expected of them. Just because it's clear in your mind doesn't mean it's clear in the rest of the team members' minds.


Watch my accompanying screencast "How to Draw Organizational Charts and Team Charts with SmartDraw."

3. I Organize my Operations with Processes

As my business grew it soon became evident that we needed to formally define the way we did routine things so that the result was the same each time and we could train new people more easily. Whether it was something technical, like the way we built software releases, or something simple like the way we shipped product, we needed to define a process that was followed each time. 

I use flowcharts to define our processes. With SmartDraw 2008 that we released in September, this is so easy I can actually revise the chart on the fly as I think it through.


 

Watch me do this in my screencast "How to Map Your Business Processes with SmartDraw."

4. I Organize my Work with a Project Chart

In my experience the biggest reason projects are completed late (and over budget) is because all of the steps involved were not considered up front. Managers specify tasks that are big and vague like "Create Website". A big task like this is actually made up of many small tasks  and can take months. You cannot properly estimate how long a task like "create website" is actually going to take without breaking it down into smaller more specific tasks.

My rule is that if any task takes more than three days it's too broad and needs to be broken down into smaller tasks. As I go through this process I always think of new things that I need to do and that add time to my initial estimate. Something that sounds simple is often not so, once you get down to the nitty-gritty.

I use a mind map to start the process of identifying all of the tasks. I break big tasks into smaller tasks. The natural outline format of a mind map is perfect for this. Then I convert my mind map into the traditional project chart (or Gantt chart) format an assign a time to complete each one. SmartDraw makes this particularly easy because it does it automatically and lets me go back and forth between the two views with a single mouse click.


Watch my screencast, "Managing Projects with SmartDraw" to see this in action.

All of these techniques help me keep multiple projects on-track, and the people working on them informed and on the same page.  For more details read the companion PDF from our Working Smarter series: Four Ways to be a Better Manager.

Getting It Done On-Time with Simple Project Management
Published 20 May 8 4:0 AM | Aaron | 3 comment(s)

The most important aspect of any project, personal or corporate, is cost and cost is determined by the answers to the following two questions:

  • How much time am I going to need?
  • And how many people am I going to need?

My background is primarily in software development and like most modern forms of work it's very much a project-driven field. Software developers are notorious for always delivering their projects late and over budget. Why? Because project managers don't fully scope out all of the tasks that must be done, and then they assign arbitrary times to their list of vague overly broad parts of the project.

 I use two techniques to solve these problems: I use a mind map to identify all of the tasks and then a project chart (Gantt chart) to assign how long each task will take.

This sort of project management may not be necessary for the tiniest of projects, but for most projects you are going to need an organized, measured approach in order to accurately anticipate costs and to keep your project on schedule.

How I Manage Projects Using Business Graphics

In my last semester of college I was involved in a marketing project along with three other students - we had to perform some basic market research on the behalf of our client, an online niche news service.

We had to gather information from four target audiences:

  • What attracted current subscribers to the service;
  • What might draw potential new subscribers to the service;
  • What might draw large advertising networks to publish with the service; and
  • What might draw smaller, direct advertisers to publish with the service.

I'm going to use this small project as an example for the purposes of this article.

Step 1 - Scope Your Project with Mind Maps

I've written before about using mind maps to organize your thoughts and ideas. Mind maps are a great tool for organizing one's brainstorming but mind maps are also a great project management tool, and they are especially helpful for breaking down a project into smaller components.

The ultimate goal with our mind map, for the purposes of project management, is to narrow the scope enough such that the tasks identified on the map are specific enough to be easily understood by the project members.

I'm going to begin my mind map with the four target audiences that I mentioned earlier.

 

That's the first step - the next step is to start adding more specific subtasks as branches to each of the original tasks, like how I have done in the picture below:

 Now we're ready to move onto our project chart, given that our mind map is complete.

Step 2- Convert Your Mind Map into a Project Chart (Gantt Chart)

We used a mind map to clearly scope out all of the tasks that will go into executing our basic market research project - now we need to use a Gantt chart to schedule our project and monitor our project's progress.

In SmartDraw it's actually really easy to convert a mind map to a Gantt chart because SmartDraw will automatically do it for you, as we demonstrated in our most recent screencast "Managing Projects with SmartDraw."

Here's the product of our initial conversion to a Gantt chart:

I had to crop out some portions of the Gantt chart in order to make it fit into this blog post, but you get the idea - we have an initial Gantt chart to work with and now we need to begin determining the appropriate start dates and durations.

Step 3 - Schedule and Order Tasks on Your Gantt Chart

We have a basic order of operations that we need to follow in order to complete the data analysis for our market research project:

  1. Prepare survey/questionnaire material
  2. Prepare prospect lists (if necessary - we already know who our current readers are, for instance)
  3. Prepare distribution letters (if necessary)
  4. Identify distribution channels
  5. Distribute surveys and conduct interviews
  6. Analyze results

Some tasks can be conducted in parallel, such as preparing questions and paring prospect lists, but some tasks can't begin until others are completed - you can't conduct an interview without any prospects, for instance.

After taking all of these factors into consideration we can begin defining our start dates and durations, which would make our Gantt chart look something like this:

The lines in red represent the deadlines for our primary tasks, so they include all of the deadlines set by the subtasks contained within the Gantt chart hierarchy. I've included a link to a full-sized version of this Gantt chart in PDF format below:

[PDF] Example - Market Research Mind Map and Gantt Chart.pdf

As you can see, the Gantt chart is small enough and simple enough to be clear and easily understandable by the other members of my team - they all know when each deliverable is due and when we need to start work on any given portion of the project.

Step 4 - Measure Your Progress with the Gantt Chart

My four man marketing project has a total duration of 10 business days - updating the Gantt chart with new Gantt bars, "progress bars," wouldn't really be necessary given the small scope of the project - however, in the context of larger projects with larger teams it's important to communicate your unit's progress to the other units that compose the project team, especially if their tasks are dependent upon the completion of yours.

Learn More about Project Management Using Mind Maps and Gantt Charts

If you'd like to learn more about project management using business graphics you can watch our most recent screencast "Managing Projects with SmartDraw."

Also, if you'd like to play around with the diagram that I used in this example, you can download a free trial of SmartDraw and open the example file below.

[Example] Example - Market Research Mind Map and Gantt Chart.sdr

 

Screencast: Managing Projects with SmartDraw
Published 15 May 8 4:0 AM | Paul | 7 comment(s)

In this screencast we show you how you can use SmartDraw and to manage projects; first we show you how to scope your project with a mind map, then we show you how you can easily convert that mind map into a project chart (Gantt Chart), and finally we show you how to use those two charts as effective project management tools.

Download a free trial of SmartDraw here.

Learn More

If you'd like to learn more about this topic then be sure to read our companion PDF - Working Smarter with Project Charts.



Why the Organization Chart is Not Obsolete
Published 12 May 8 4:0 AM | Paul | 1 comment(s)

It's fashionable to view the traditional top-down org chart as about as relevant to today's growing businesses as the three-piece suit. Today we self-organize into ad-hoc teams that form and melt away again, or so the theory goes.

As someone who has built a business from one person to 40 (and growing fast) I think most entrepreneurs misunderstand org charts and their value even to the smallest business of just one person. Yes, I'm serious: A one person organization that aims to grow needs an org chart!

The root of all this is the common misconception that org charts show how your people are organized. Wrong! An org chart shows how the responsibilities in your organization are organized even if there is just one of you.

When I started SmartDraw I was the lone employee, responsible for

  • Product Development
  • Marketing
  • Sales
  • Finance
  • Customer Support
  • Operations
  • IT
  • Vision and its implementation (CEO stuff)

But my org chart looked like this:

 

 

Note that there are no people associated with this chart. It shows the organization of the positions (with their implied responsibilities) within the company and is still valid today. Back then when I added the occupant of these positions it would have looked like this:

 

A bit silly, you say? No, it shows the road map for me to grow my business. Part of my job has been to replace myself in each of these roles as SmartDraw has grown. Today the chart looks similar but most of these boxes have someone else's name as the occupant.

An org chart is an incredibly useful tool that forces you to think about the way your business should to be organized and points the direction to get there.

Let me walk you through the way I use the org chart as a management and planning tool and what I get out of it.

1. Start by defining the positions (jobs) in your company

Before you can draw an org chart you must define the positions within your company and their responsibilities. My favorite way to do this is with a job description: A short document that defines a job or position within the company. I structure them like this:

  • Title of the position
  • The goal of the position
  • The measure of success
  • List of responsibilities

Here's an example:

Director of Product Engineering and Services

Goal

The goal of this position is to ensure that SmartDraw releases occur on time, meet specifications and are of high quality and that customer support of the product is appreciated by our customers.

The Measure of Success

One year from now, the successful occupant of this position will have achieved the following:

  1. The successful release of SmartDraw 2008 in early September 2007.
  2. Developed and validated the authority and a quality of all content (templates and symbols).

Specific Responsibilities

  • MANAGE DEVELOPMENT
  • INSTALLS
  • CONTENT DEVELOPMENT
  • CONTENT MANAGEMENT
  • QUALITY ASSURANCE
  • CUSTOMER SUPPORT

2. Decide who reports to whom

Except for the CEO, each of these positions reports to one other. Ah ha! You say. This is not true in my organization we all talk to each other; Marianne for example does work for three different people. OK, but who sets her salary? Who hired her? Who will hire her replacement? That's who she reports to.

If you still can't answer this question, (perhaps you have equal co-managers or co-ceos), it's your organization that the problem, not the nature of org charts. Someone has to call the shots. If you can't make up your mind who this is, it's time you did.

3. Now draw your chart

Now you have a simple hierarchy and you can draw that org chart.

Lessons Learned

The most important step in this process is defining each position and its job description. This forces you to think about every step in your business and how it is organized. Write job descriptions as if you have no employees. Don't write one to fit what someone you have already does. If Marianne is tech support rep and shipping manager, don't write a joint job description. Write two and put her in as the current occupant of both. This gives you a much clearer picture of her role.

Once it is complete, show it to everyone. Ambiguity is removed. Clarity reigns!

Teams

OK, great but we all work in teams that don't follow the org chart, you say. So do we, but that has nothing to do with our org chart. Project teams live in a parallel universe to the org chart. Don't try to mix them up. Use your org chart to map out responsibilities and roles within the organization. Use a team chart to map out the responsibilities within a project. We cover this in another post.


Learn More About Creating & Drawing Organizational Charts

If you'd like to see how easy it is to map your business' roles and positions into an organizational structure then watch our screencast "How to Draw Organizational Charts and Team Charts with SmartDraw."

Screencast: How to Draw Organizational Charts and Team Charts with SmartDraw
Published 7 May 8 10:49 AM | Paul | 2 comment(s)

Organizational Charts (Org Charts for short) and Team Charts are excellent tools not only for clarifying the structure of your organization, but also for directing the growth and evolution of your business. In this screencast, I explain what the differences are between org charts and team charts, how both types of charts are used most effectively in a business setting, and how to quickly and easily produce org charts and team charts using SmartDraw.

Download a free trial of SmartDraw here.

Learn More

If you'd like to learn more about this topic then be sure to read our companion PDF - Working Smarter with Org Charts.



Be a Better Manager - Organize Your Ideas with Mind Maps
Published 5 May 8 4:0 AM | Aaron | 2 comment(s)

Every new day presents a new set of problems to be solved; I work as a web developer and as a marketer thus I have to a wide range of problems, projects, and concerns that I have to attend to. Before I get started solving a new problem I take the time to get my thoughts organized, prioritize concerns, and help formulate an attack plan.

How do I organize my thoughts? I use a Mind Map.

How I Use Mind Maps

I wrote a post on my personal blog about "How I Use Mind Maps to Organize Online Marketing Messages" a while back; in this post I'm going to write about how I use Mind Maps in general.

Let's say that my task for the day is to start brainstorming a few ideas for new sales messages. Here's how I'd go about doing it.

1. Start With The Core Issues

The first thing I'd do is identify the core issue (new sales messages) and then branch out into a handful of general topics.

 

Now that I have a few basic topics to get me started, I'll move onto the next step and explore each of these topics a bit further.

2. Flesh Out the Topics

I always take my first few topics and expand flesh them out, like how I have below:

 

So that's one instance of expansion. By the time I'm done fleshing out my ideas my mind map might look something like this:

 

As you may have noticed, I even added a fourth topic during the course of my fleshing-out.

3. Prioritize, Categorize, and Share If Necessary

After I finish my initial Mind Map I'll sit around and stew on a few of my ideas, pick out some favorites, and then I'll prioritize them and categorize them. Typically I illustrate this by adding color to the different sub-topics.

 

I also find that adding color to the Mind Map makes it more presentable if I have to include it in a PowerPoint presentation or share it with anyone else.

4. Start Working

Now that I've got an idea of four different types of sales messages that I can work on, I can actually... start working on them! How you organize your work is up to you (I use a Gantt Chart for large projects, which is something that I will cover subsequently on The SmartDraw Blog,) but at least now you've got your thoughts together and you know what to work on.

Diagramming Software for Mind Maps

We obviously use our own product, SmartDraw, to draw Mind Maps. If you'd like to learn how to use SmartDraw to draw Mind Maps, you can watch this screencast which shows you how to quickly and easily produce presentation-quality Mind Maps with SmartDraw in a matter of minutes.

If you'd like to play around with the example that I used in this blog entry then you can download a free trial of SmartDraw and open the attached SmartDraw file below.

[Example] Mind Map - Organize Your Thoughts - Demonstration.sdr

Screencast: Drawing Mind Maps with SmartDraw
Published 1 May 8 4:0 AM | Paul | 10 comment(s)

One of the best ways to organize your ideas and produce tangible results from brainstorming sessions is to use a mind map. A mind map is simply an organic way of growing your ideas from one central topic to many related subtopics; this branching process helps you step down from an initial, abstract concept down to more specific and concrete ideas.

This screencast shows how to draw mind maps using SmartDraw.

Download a free trial of SmartDraw here.

Learn More

If you'd like to learn more about this topic then be sure to read our companion PDF - Working Smarter with Mind Maps.

 



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