The Education Business Blog

This article is based on notes from a panel at the Ed Tech Industry Forum in New York that took place in December. The insights the panelists shared are no less relevant now that we are into the new administration and sorting out the economic stimulus.

The panel consisted of:

• Moderator - Todd Brekhus - VP and CMO Plato Learning
• Francis Alexander - VP - Scholastic
• Robert Iskander - CEO VIP Tone
• Dr. Steve Ritter - Chief Scientist Carnegie Learning

The panel members are operators which stood in contrast to most of the investor oriented agenda at the ETBF.

The common threads that emerged from the comments are summarized as:

• There is opportunity in this economic climate - children still go to school and it is a political priority.
• Everyone needs to sharpen their game and focus on articulating value more effectively.
• SaaS is a mixed bag - lowering initial costs but setting up a long term commitment School Districts may hesitate to commit to in this climate.
• The Obama Administration will be friendly to NCLB reform and technology.
• Technology enabled individualized instruction is a growing trend.
• Customers are implementing books first, technology second.

The panel organized the discussion around a few core questions and it is presented below in that format and sequence. I have generally refrained from editorial comment - even when I disagree with a panelists statements. As you read the comments remember that some of the them were tempered by the fact that both Plato and Scholastic are publicly traded.

Q - The Education Market has observed downturns in the past, yet companies have come out stronger with new products and more efficient business models. What is your view of the current economic situation and the education market.

Francis Alexander (Scholastic) - There is one evergreen resource - children. There is opportunity - but you have to be a lot more focused and sharper about how you approach your customer base. Even in California there are categorical funds that are available. Warren Buffet still sees education as the one growth sector in this economy. There is still a demand for innovation and schools have an urgency around closing the achievement gap and improving test scores.

Scholastic has found that a message about being safe and proven and being proactive about helping customers find federal funding for products resonates.

Robert Iskander (VIP Tone) - The economy is disruptive on a scale that was unanticipated even 3 months ago at EdNet. Education is going to be fine - the downturn will be selective. Companies that have a balanced portfolio of consumer and enterprise will do better than pure play on one side or the other.

There are areas of growth - but they share a focus on cost savings for the customer. Virtualization, technology consolidation, etc. Value propositions that will save money based through innovative technologies will be the winners. It will be a selective process. Virtual learning will keep travel and other expenses down.

Steve Ritter (Carnegie Learning) - Making the transition from relatively good times is going to require a huge amount of focus. It requires knowing your customer and keeping them satisfied. One of the nice things about education is that doing well saves them money by reducing dropouts - efficiency is not just about running operations less expensively but about improving educational outcomes the first time around.

Todd Brekhus (Plato) - Subscription based SaaS models are going to be a real challenge from an ongoing retention model because budgets are under pressure. On the flip side the up front cost of SaaS is lower so it is a mixed bag. They work hard to define a return on investment in dropout prevention etc. and articulate that for their customers. The ubiquity of data systems is helping here. Forty two states now have data systems to monitor policy in action.

Q We are at an inflection point. What is your long term view of long term trends.

Steve Ritter (Carnegie Learning) - More individualized instruction is a broad trend.

Robert Iskander (VIP Tone) - Everything is going to move to a web service given the cost savings vs. legacy systems. Content as a Service, Software as a Service, People as a Service. How do we integrate all of these into a single platform with 24/7 delivery and platform independent. This is what his company does - so his perspective is understandable but a bit narrow on this topic.

Francis Alexander (Scholastic) - ACT.

• A - Accountability is stronger than ever even post NCLB but the nature of the assessments will change. Obama's people are tired of "autopsy" assessments - they want more "well kid" check ups (more formative assessment and less focus on summative measures). Response to Intervention (RTI) is going to accelerate because of this.
• C - They expect a big push to college readiness starting all the way back at early childhood education. This will be accompanied by a move to IEP's for all students and long term mentors beyond their teachers.
• T - Technology is the enabling environment for this. It will move the emphasis from textbooks to on-line delivery.

Todd Brekhus (Plato) - Interoperability is a big issue. SIFA is going to a web services model. When combined with content metadata from the publishers we are approaching a point where differentiated learning can be tied to accountability.

Q - We have a major political change in Washington and throughout the country. What impact will will these changes have on funding at the federal, state, and local level. How will this affect the education market?

Francis Alexander (Scholastic) - Obama's team are starting to talk about where education fits into the stimulus package. The UKs stimulus package does address this - particularly for infrastructure things like e-Rate. Obama has talked about $500 million education in matching grants for education technology. [Note: the final Education number in the stimulus was over $50 billion].

Robert Iskander (VIP Tone) - e-Rate is tied directly to the economy since it is tied to phone bills. As people switch to VOIP it will decline. NCLB is a bit question mark. The eventual revisions may involve more technology but it isn't clear yet. Hopefully the bailouts will affect the Department of Education as well.

Steve Ritter (Carnegie Learning) - He expects Obama's administration to be more friendly to education technology. They also expect to see technology spending to become more mainstream in schools - it is becoming part of the way they do business.

Q - What tactics can companies employ during a time of economic difficulty to remain healthy and vibrant.

Robert Iskander (VIP Tone) - If you don't have cash you were expecting business as usual. Companies in this position are going to be making severe cuts. Strategic investments will have to wait. If you do have cash in the bank this is a great time to buy people who don't have cash.

Steve Ritter (Carnegie Learning) - The key is focus. Don't try to be everything to everyone. Geographic focus on a state by state basis. A lot of schools don't have enough bandwidth to run SAAS - so a local installation option is important.

Francis Alexander (Scholastic) - Everyone needs to control costs and cash. They expect the market to come back and when it does being in technology will put you in the right place.

Todd Brekhus (Plato) - Stay hyper-focused on delivering only the features that are essential and usable to drive renewals and keep your costs down.

Q - There are a lot of smaller companies and start ups here at the conference. What advice do you have for them to keep in mind during this time in our economy?

Steve Ritter (Carnegie Learning) - Focus more on your customers than on your technology. This is the time to understand what they need and how they operate. Your technology may be great but if isn't filling a real need you won't go far.

Robert Iskander (VIP Tone) - If you don't have money in the bank then stop what you are doing and go raise it. If you do have it focus on profitability in the short term.

Francis Alexander (Scholastic) - Be a good smart partner to school districts.

Todd Brekhus (Plato) - Focus on solutions not products. Make sure your return on investment is well articulated for all stakeholders and customers.

Audience Questions

Q - With all the emerging SAAS models are we exposed to a global marketplace? (Asked by Nelson Heller)

Robert Iskander (VIP Tone) - Knowing customer requirements is essential - US companies have a leg up in servicing this market. With a strong dollar there are some interesting opportunities to invest outside the US (India, Australia). Open source is going to play a big role in this economy.

Todd Brekhus (Plato) - This panel is made up of content companies - we believe good instructional design sells. There is a play for the objects - but the value chain hangs on how the content is presented to students and how it demonstrates improvement against standards. Most of the open source materials don't do this.

Q - Should you focus on print or technology in this climate?

Francis Alexander (Scholastic) - Scholastic drives delivery of book content across multiple media. They are working towards blended delivery. It isn't an either or but what serves the current need best.

Steve Ritter (Carnegie Learning)- They have seen strong growth in the print line. They expected it would be blended - but currently districts are phasing product in by doing the print first and bringing in the technology later.

Can a new product enter the education market and generate organic growth in the market? Not really. This is one of the core issues new entrants have to wrap their heads around as they think about how to sell and market to schools. Education is (mostly) a zero sum game.

Today we tackle issue #3 in our series on selling and marketing to educators.

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry

In normal times education budgets grow at 2%-5% a year. Most start-ups or new products need to grow at a huge multiple of that - 30% to 300% or even more. Mathematically in order for you to grow someone else is must lose out. Normally in a market that is over $500 billion you would think that there is plenty of room for growth. There is - but it is less than you might first assume.

The Challenge

In a business market, if someone comes up with a new widget that dramatically improves productivity, growth can come from increased profits and/or rapid market expansion. Three underlying facts about education funds make this much harder to leverage.

1. Education funding comes from four primary sources. States provide about 46%, local taxes another 37%, the Federal Government chips in 8% and the final 9% is from private sources (mostly private schools). Over 90% of this is government spending which does not have the volatility (up or down) that one can see in a business or consumer market. Lower volatility is a good thing in bad times - kids still show up in school every fall no matter what (for more on my take on who will do well in the current climate follow the link).
2. Most of the $500 billion + that schools spend is for people and services. Education is people intensive business and roughly 80% of school district budgets go for staff. So take off $400 billion. Of the remaining 20% almost all of that goes for services - buses, food, athletics, accounting, etc. At the end of the day only 1-2% is spent on instructional materials and technology ($5-$10 billion). Another $1-$2 billion are spent on education enterprise systems and services (Student Information, Accounting, etc.).
3. Within the instructional materials market many funds are dedicated to a specific purpose - further limiting the scope of what you may be able to compete for. These are called categorical funds. Examples include textbook adoptions at the state level and Perkins funds for career education at the federal level.

It seems kind of funny to say that the market is only $5-$10 billion. This is roughly the same size as Hollywood or consumer Video Games. But I have seen many business plans from people outside of education who trumpet the $500 billion number. It just aint so, don't be a n00b.

What all of this means is that your amazing new learning widget or software is going to have to steal market share from someone else. You may be thinking to yourself - "this doesn't apply to us since no one else does what we do - we don't have competition." Wrong.

I once heard a Principal tell a technology vendor that he didn't need computers to teach - he just needed a pencil and a pad of paper. At the most basic level he was right. If you are selling instructional materials you are competing with a teacher simply talking. You are also competing for their time and effort. At a more practical level some other vendor or product is going to loose out if you succeed.

Lessons
There are three lessons to take way from this.

First - be clear about who you are going to take market dollars from and where those dollars come from. This will help you focus your product offerings so that they meet the specific requirements of the funding source you are are going to tap.

Second - you must do your competitive research - too many companies are so in love with their own products that they don't spend the time to understand why customers are already buying competitive/alternative products. Assume you are going to be in a dogfight. You might avoid this - but don't plan on it.

Third - this market grows more slowly than others but once you have customers it is less volatile. When you have grabbed a piece of the market it is often solid for years - if not decades (see Plaid Phonics at 50 years and counting). The downside is that some investors will push you to grow at an unrealistic rate given the time it takes to build a position.

Other Options

At the outset I said that education is (mostly) a zero sum game. The "mostly" is because there are a couple of extrinsic sources of growth.

One option is to bring in sponsorship dollars from corporations and non-profits - essentially making your products free to schools. Channel 1 and Whyville (client) are both good examples of this approach.

Another option is to lobby for additional government spending - earmarks. This is usually more opportunistic than deliberate - policy makers decide on a priority and companies work to bend it to their advantage. Voyager and Dibbels fueled a lot of their growth this way.

Foundation grants are a good way to get started - but with rare exceptions they do not provide a sustainable business model and in most cases they are restricted from overtly supporting commercial ventures. If your product happens to get purchased as part of a larger initiative that is fine, but outright support would be extremely unusual.

Conclusion

Once you have selected a target market (see #2 on the series) you need to do additional homework and determine how those customers are meeting their needs today and who your competition is. Driving the kind of rapid growth a new product or start up demands requires that you know who you are displacing. Your products and messaging can only be tailored to the situation when you have this level of awareness.

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry

Rookies in the education market make a set of common mistakes. There are five concepts you need to grasp about selling to schools that will help you avoid execution error as you enter the learning market. Consider these the iron laws of marketing to public schools. Accept them, nay embrace them, and your job will be easier.

In my consulting practice I go through these topics with almost all clients who are entering this market from other industries or countries. In this series I will post my thoughts on each of these rules and I welcome your comments and reactions. We will cover:

Part 1. Obey the calendar. Schools buy on a regular schedule, design your business around it.

Part 2. "Education" is not a target market - it's an industry. No matter how great your product you need to pick a target market to focus on.

Part 3. This is a zero sum game. In order for you to win someone else has to lose.

Part 4. Teachers don't have the time to take the rough edges off your product. Teachers make or break a product.

Part 5. It's all about learning - mostly. You need to know the politics of selling to schools.

Iron Rule #1 Obey the calendar.

It doesn't matter what you are selling - 60%-70% of your sales will come in the months of May-July. There are two reasons for this. First - most schools want to install, organize and train on new products during the summer when the kids are off. Introducing big changes during the school year is just too tough. Second, most school fiscal years go July-June. This means that they either have money left at the end of the year to spend in June or they are spending out of new budget authority in July.

This ebb and flow affects the entire business.

Sales - The fall season is spent generating prospects, during winter you demonstrate and write proposals, and spring is time to close the business. Deals do happen outside of this window (30%-40%) but they are spread over 75% of the year.

Product Development - In order to meet your goals you need to schedule product releases so that you can demonstrate them starting January 1 and ship them starting May 1. It may be necessary to pilot products starting Aug 1. If you are shipping an update it needs to be ready by May.

Marketing - Marketing works 2-3 months ahead of sales - creating awareness campaigns in the summer to run in the early fall, sales tools during the fall months, events during the winter months, and then planning for the next year in the spring.

Support - This group will always have a spike during the May-August time frame and it is useful to have a cadre of trained part-timers who can step in during these months to help with installation and training issues.

Finance - Your line of credit also needs to carry you through the lean months - make sure finance understands this.

I've worked in computer hardware, enterprise software, textbooks, supplemental materials, and education technology and they have all followed this schedule. You are not likely to be the exception to this rule.

In many ways this is similar to the retail world with their huge annual spike at Christmas. The good news is that with decent pipeline reporting you can usually tell several months ahead of time what your sales are likely to be. Budgets for education are set at the start of the year so there isn't the kind of economic uncertainty you find in retail. Most of the companies I've worked for were able to predict within 10% what their annual sales were going to be by the end of the 1st quarter (usually January).

Part 1 - Obey the Calendar
Part 2 - Education is not a target market - it is an industry
Part 3 - Education is a zero sum market

Education Channel Partner published a story I wrote about partnerships for companies that serve the education market. Whether you are a textbook publisher, an education technology developer, a fellow management consultant, or a reseller/dealer I hope you will find some useful ideas in the article. Think of it as Business Development 101 for education.

Too many partnerships fail because the partners didn't work through all the questions they needed to address individually and mutually. This article attempts to lay out a process for evaluating partnerships and a partnership taxonomy to help determine what kinds of partnerships are right for your company. It draws on my experiences at Apple, Chancery, Pearson, and Harcourt.

From the blurb:

Why do some partnerships succeed and others crash and burn? In profitable K-12 partnerships, companies carefully structure the relationship and know exactly what kind of partner they need. Here’s a guide to the elements of a successful partnership and a taxonomy of the kinds of K-12 business alliances out there.

The title - Making Channel Partnerships Work - is a bit misleading since the article covers more than channel partners. I address co-marketing and a couple of other topics outside of channels.

I'm really pleased to be working with the team over at Education Channel Partner. Later this year they are publishing another article from me on data driven selling. That article expands and develops the ideas noted in this post from last spring - Data Driven Selling - Quick Start Guide.

Link to the full partnership article.

What do large school districts need from ed-tech providers? Michael Casserly Executive Director of the Council of the Great City Schools spoke at the Software Information Industry Association (SIIA) conference this week in San Francisco. The speech was direct, honest, and well balanced in tackling some difficult issues like NCLB.

Towards the close of the speech he made the following 10 requests of the Ed-Tech community. I've added my perspective from the industry's side of the conversation.

1. Provide tools that build academic vocabulary and develop high order thinking skills. I found this an interesting request given that all the major publishers and several mid and small sized publishers have materials that do all of these things. Either we are not meeting the real need with our products or we are not getting the word out effectively. This should give all of these providers cause to reflect on their offerings and their go-to-market strategies.

2. Provide targeted intervention materials for Special Education (SPED) and English Language Learners (ELL) - specifically age appropriate materials targeting different ability levels. This is a similar problem to issue #1, there are a fair number of existing resources in the market already, but most of them are print based. One area where technology could make a huge difference is flexibly scaling basal textbook content to the student's ability level. Doing this with print presents two intractable problems - the sheer number of variations needed is prohibitively expensive and the stigma associated with the lower level books causes kids to resist using them. On-line everyone is in the same application and the number of variations is limited only by the sophistication of the software engine.

3. Develop virtual environments to stimulate inquiry based learning when the real materials would be too expensive or dangerous. This is an exciting area with a lot of activity. My article in Cable in the Classroom covered this very ground. Virtual worlds do present a challenge in districts with high poverty around equity of access to technology. The path of least resistance here may be cell phone based interfaces similar to what is happening in Japan and Europe.

4. More group learning resources using technology. Honestly - I was writing like crazy and missed the substance of this request. If you were there and recall please explain in the comments. [Update: see Charlene Blohm's take on this in comments.]

5. Clarity from publishers on what our materials do and don't do. There is a feeling that technology vendors have either over-promised or omitted important product shortcomings. Fair enough. The temptation is always there for vendors to do this - but in the conversation economy it can be deadly. Trust is the coin of the realm. Sales Management has a responsibility to set the right tone of integrity and honesty.

6. Provide clear alignments to standards in a deep and meaningful way. They would also like to know where we don't meet the standards - don't force them to figure it out on their own. Vendors might be more inclined to do this if we feel that it is more than a check-off item. The cost of doing correlations and maintaining them is significant and yet from what we can tell once they are submitted they are never used again. We do this little Morris Dance around the standards and then districts buy the book with the prettiest cover.

7. Stick by them - they are in it for the long haul and they need business partners to trudge that road with them. This is a legitimate request but a hard one to implement due to the management turmoil many large districts suffer from on an ongoing basis. It can take years to position a sale in a large district only to see it derailed by a reorganization or funding re-allocation. Only the largest publishers can make this kind of sustained commitment which limits the range of innovative solutions that the large districts see.

8. Longitudinal follow up with effective professional development. He also requested that we bundle PD into the cost of the products - if PD is an add-on option there is the temptation to skimp in this area. This request is consistent with the thesis that we are going to see a Negroponte switch to districts paying for PD and getting the materials for free. Of course, the easiest way for districts to insure that this happens is to issue their RFPs with PD bundled in. Until that happens vendors who are competing on price are going to leave it out. Amplifying this temptation is the fact that PD is frequently the item with the lowest contribution margin at publishers and ed-tech vendors.

9. We should resist customizing our products for one district - too many districts have had been left behind on legacy code as a result of this. I'm really not sure that the vendors are at fault on this one. This usually happens when a large district flexes their market power by demanding special attention. I've known vendors who have walked on these deals because they see the problems down the road, but there is almost always someone willing to bid it exactly the way the district requested it. See my comment below on how the Council itself could play a positive role in these situations.

10. Provide software tools that help them use data more effectively. This includes longitudinal tracking systems, dashboards, and benchmarks. This is an area where lots of companies are doing important work. Student Information Systems, Data Warehouses, Assessment Reporting Systems, and Learning Management Systems are complex software systems that are evolving rapidly. This is also one of the areas where technology, used effectively, can provide real tools for change.***

On top of all this he added a bonus request. He asked that vendors resist selling products when the district wants to use them in an inappropriate way (wrong age level, insufficient infrastructure, etc.). This is related to item 9 above. If a vendor feels they are being pressured to do something like this it is hard to push back, particularly in a competitive situation. Responsible vendors will walk away - but there will always be someone who will make the promise to win the business. I think there is an opportunity for the Council to be of service in this area. If the responsible vendors felt they had place they could go before these deals were sealed it might make a difference. The Council could put a word in with the district that they were headed in a risky direction.

Large Districts (and States) need to resist the temptation to use their market power in ways that ultimately hurt their own interests. There are perfectly legitimate uses for that market power so I'm not advocating unilateral disarmament - just suggesting that some restraint is needed on both sides. Districts shouldn't make unreasonable demands and vendors shouldn't make unrealistic commitments.

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***I'm working on the Data Driven Decision Making Report that will be released in the next few weeks. It is an in-depth look at the SIS and Data Warehouse market and is a follow on to the 2003 report. If you would like more information please use the contact us link and reference the report.

Busking teaches fundamental business concepts. As a young man I saw the world by tossing open my banjo case and belting out a few tunes. I played in Boston, Montreal, Tokyo, New York, Paris, San Francisco, Seville, New Orleans, and Amsterdam to name just a few spots.

Along the way I absorbed some interesting lessons that have helped me be more effective in the business world.

1 - Make people feel something. People respond to musicians who make an emotional investment in their performance. Laugh, sigh, get that ache in your voice, and share your joy.

• Address your customer's unstated social needs. Will your product make them look better? Will they feel more professional using it? Is it cool?
• Build products and deliver services that go beyond the basic spec. Make your product something people are proud to have around.
• Never check your soul at the door of the workplace. If you have to - find another job

2 - Respect your audience by mastering your craft. The goal of practice is to work so hard that performance looks effortless. When you play well the audience will reward you, not the guy who knows three chords and two songs.

• If you can afford the time, get things right on a small scale before you try to master the universe. Build practice time into your business plans.
• Read, go back to school, fill the gaps in your knowledge in any way that you can. Make opportunities to practice your craft in service work.
• Learn the black art of setting and making a budget.
• Cross train - invest in your career by doing a variety of jobs.

3 - Play well with others. Street scenes are like market niches, you run into the same people every day. Most afternoons in Paris I would trade off sets with a Peruvian pipe flute band in an alcove down in the Metro. It had heavenly acoustics (that I still dream of) and we both made tons of money.

• Get involved with your industry associations. They tackle problems no individual business can.
• Never speak ill of your competition - just out-hustle them. Customers don't want to know about your rivalries - they want a solution.
• Network to find others with complimentary skills and bring them into deals. Most (not all) will do the same for you in return, expanding your deal flow.
• Be loyal to people. Look after each other because the company won't.

4 - No one wants to be the first customer. Buskers always start by throwing $3 their own change into the case.

• Give a new product away to the first two customers. Factor this in to your business model as an expense. If it makes you feel better make them pay for training.
• Donate your time to get started in something new. My first consulting client several years ago paid me a straight commission for business development work. I was able to show up at conferences legitimately representing a client which made it a lot easier to find other clients. That first deal was lousy for me, the other deals were the gravy.

5 - Don't rush to judgement, sometimes it is just a bad day. There are days when the weather is wrong, you are there at the wrong time, your fly is down, or people are just being ornery.

• Give ideas and people more than one chance to make an impression.
• Be leery of a single focus group - if you get the same result from several then you are on the right track.
• Bring job candidates back for multiple interviews and make sure they talk to a variety of people.

6 - Have fun. The purpose of busking is to pay for your adventures. Go see the ruins, sleep in, enjoy a long coffee, stay out late, and enjoy your trip. In the business world this means:

• Take risks that move you towards your personal goals.
• Remember that you work to support your life, not the other way around.
• Have a laugh or two in meetings.
• Take your dog and your office down to the coffee shop by the lake.

Marketing and selling in the era of infinite input feels like howling into a gale. The average urban dweller is subject to 4,000 ads a day, 1 every 14 seconds. The only sane defense is to tune it all out, to turn it into wallpaper for your world.

Earlier in this series on Information Overload we looked at our broken paradigms of information management, a new personal productivity paradigm, and 10 ways to build instructional products for today's learners. Today we look at what this means for those of us in the persuasive professions. The suggestions here are not just for education publishers - they are what I consider best practices for all marketers.

The fundamental problem is that the signal to noise ratio has gotten completely out of whack. I have an email account that I've been using for several years. Spammers have gotten their grubby little mitts on it and I now get over 3,000 spam emails a week at this address. I have great filtering - less than 100 make through so that isn't the problem. The issue is that I no longer bother looking for false positives - I just delete it all and hope/pray that if it is important the person will find another way to reach me.

So what is a legitimate marketeer to do? Here are some suggestions for how to rethink your marketing and sales mix so that you can stop shouting and start conversing with your customers. Fundamentally it is about what I call Socratic Marketing.

I'm assuming you have read at least the first installment in the series, what is below will make more sense if you have.

Marketing & Sales Concepts For The Conversation Economy

1 - Be remarkable - You should have a winning promise and make sure that everyone in your company understands their role in making it real. Do something worthy of sharing with other people and customers will find you. Seth Godin writes consistently and persuasively on this topic. This is the bedrock of the new approach.

2 - Stop shouting. You can't have a conversation when you are screaming. Beyond the obvious (opt-in lists) you need to look at every communication and ask whether it is relevant, important, and actionable for the target audience. Make sure you hit all three. With the time you save from implementing the ideas in Part 2 listen more. With social media, blogs, and wikis It is so much easier to do today that you have no excuse.

3- Respect people's time. Less is more. Here is a great example.

4 - Be there when the customer is ready. Post information on your web site that maps to different stages of the sales cycle. Initially have general comparison charts that help prospects form a mental map of the market. As they get closer to buying have the detailed specs on hand. After they have purchased send at least one message with tips on how to get the most out of the product.

5 - Relax Grasshopper - This new information economy is not kind to control freaks. The goal is to help your passionate users find ways of communicating with their peers - what they have to say is going carry a lot more water than anything you say. That said, if you open up communications with customers you lose control of some of the content and some bad stuff is going to crop up. This is really an opportunity to engage in conversation. Would you rather they complained behind your back where you can't respond? In the end the benefits of openness far outweigh the negatives.

6 - Make it personal - In a sea of corporate dreck people respond to the genuine and personal. Boeing's Chief Marketing Officer has a blog, Randy's Journal. This forces a more honest interchange - he is speaking from his own perspective. It allows him to talk about issues that he has expertise on (e.g. the fabled 7 extra inches of cabin width on the Airbus translates into a pencil width for each seat). People expect you to have a perspective but they also respect the expertise you bring to their information gathering.

7 - Stir up some channel conflict. In an era when all the rules are changing and no one knows for sure what is going to work you had better get comfortable with channel conflict - you have to try a lot of new things to find what breaks through. Put a few products in on-line teacher communities like We Are Teachers [client], allow customers to build custom bundles on your website, or publish something just for the on-line world.

8 - Don't hide information with the hope that you are going to "force" the start of a sales conversation. You will just frustrate customers who are used to instantly finding what they need. In fact - go the opposite direction and constantly fine tune your site to increase your pageviews and make sure that the navigation is as intuitive as possible for the largest number of users. Don't manage your website as a job protection scheme for your sales reps - you don't do them any favors by pissing prospects off early in the process. If it is a complicated sale the customer will want to talk to a Rep.

9 - Worry more about communicating with your customers than about your competitors. Don't kid yourselves that the competition won't get access to information if you hide it - after all you get your hands on all the competitor's info - don't you? In a world where information flows so easily it will find its way out whether you want it to or not. The only person you will really inconvenience is a prospect.

10 - Its the Web Baby - Optimize. Take a hard look at your web site and the various search strategies customers use to find you. Are you at the top of the search results every time? Do your writers know how to load up searchable text in your titles, tags, and the first paragraph on each page? Is your copy tight, punchy, and hyperlinked where needed? When a customer gets to a product page is there more there than a part number and a price? Measure your results on everything and move resources towards what is most effective, even if it seems counterintuitive.

We hope these ideas help you get started on the road to building a robust conversation with your customers. To find the budget I suggest you downgrade trade shows and invest the savings in on-line presence. Most organizations continue to invest far too much in trade shows out of inertia. Think of the new stuff as building a 24/7/365 trade show booth if that makes you feel better.

If you have tried some of these ideas or have additional tips to pass along comment away!

Information Overload Series

Part 1 - It’s all in your head - really
Part 2 - A cure for “a poverty of attention”
Part 3 - 10 Ways to Build Instructional Products For 21st Century Skills
Part 4 - 10 Ideas to For Marketing & Selling In An Age of Infinite Input
Summary - Closing Thoughts and Resources

Picking a target market is one of the most fundamental decisions a sales and marketing team makes. Your target market determines what products you build, where you promote them, and how you talk about them. Socratic Marketing in the budding conversation economy demands a rigorous approach to this question as part of your Big M Marketing approach..

Picking a good target market is a balancing act. The smaller your market the higher your odds of success in targeting specific needs. However, that has to be weighed against the financial objectives of the business. You can’t get so small that you define yourself out of a job! Think of this as two forces that are inversely proportionate. Your goal is to find the right balance point.

So why do so many companies get this wrong? They define markets based on granfalloons, a concept coined by Kurt Vonnegut which means "a proud and meaningless association of human beings." For example, have you seen segmentation schemes based on geography, district size, or % of free and reduced lunch students? If you are engaging in data driven selling and/or socratic marketing these are good starting points, but they are not the most powerful way to define a market.

A far more effective approach is to define your market based on how customers think about their problems. After all, in a conversation economy their problems are the topic you will discuss with them. “Fine,” you say, “but I can’t look inside their head to see how they think, I can’t measure that to determine if the market is big enough.” Fair enough, but if they really believe something their actions will speak louder than words. You can observe where they spend money and time to tease out what their priorities are.

On a sail there are dozens of tiny strings, tell-tales, woven into the fabric that show how the wind is moving across the face of the sail. This allows the sailors to trim the sail for optimum performance. As a metaphor this works perfectly for the concept we are after here. We can’t see how our customers think, but we can observe decisions they have already made to get a sense of it.

For example, at Chancery when we released Open District in the mid 90s we decided that only large districts would be open to purchasing the product so we didn’t even bother setting up pricing for districts with fewer than 10,000 students. Almost immediately however our Sales team was telling us that smaller customers were interested. When we dug a little deeper we found that it was far more important how customers saw the role of data in decision making than how big they were. The tell-tale we used to determine this was whether or not they had hired a Database Administrator (DBA) to manage their IT systems. This allowed us to be far more precise about our targeting while expanding our footprint at the same time.

On the curriculum side you might have products that appeal to constructivists or to advocates of guided reading. For the former you might look to see if they are using any products from members of the Constructivist Consortium. For the latter it might be relevant if they have maintained a librarian on staff or if they have a bookroom. Your products might require a fair amount of teacher training - look to see how they are allocating their budgets in this area. If you are selling technology you might key in on whether or not they have installed electronic whiteboards.

The goal is to find a handful of tell-tales that marketing and sales can use to focus their efforts. Marketing can use it for list selection (only give us Districts with a DBA) and Sales can use it to qualify prospects (check - they have whiteboards).

In the end the way you define your target market should be unique to your business but it should go much deeper than superficial indicators. Your goal is find a group of customers who are thinking about their challenges in ways that make them particularly open to the solution that you are offering.

It is easy for a sales force to fall into a comfort zone. Data-driven decision making techniques can help insure that Reps are reaching beyond their current contacts.

In many companies there is a great deal of data about the market. The challenge is to drive this into your field organization so that the Reps and their Managers are probing for untapped market potential on a regular basis.

There are some simple and quick ways to start using data in selling to schools and school districts. This post outlines some ideas for how to encourage your sales force to adopt a more data driven approach.

More below the fold…

Continue reading "Data Driven Selling in K12 – Quick Start Guide" »