Tuesday, December 4, 2007

Quantitative Marketing and Repositioning

In previous posts I wrote about positioning and sales readiness and used SalesForce.com as an example of “evolving” positioning. SalesForce.com is a valuable example in the context of what I’d describe as linear success. Other companies haven’t had such "linear" success and have had to completely change course. Tellme Networks is such a company. The Tellme Networks' case study is well documented (Andrew Rachleff – Standford GSB 2007). And from my experience, I can say that the senior leadership made significant strategic marketing decisions that can be abstracted and applied elsewhere.

It is not my purpose to go into details about Tellme’s history, but some context is necessary: Tellme was founded in 1999 and, after having raised $238 million and showing little revenue for it, had to drastically alter its strategy and redirect its focus from consumers to enterprises. Mike McCue, CEO, and Bill Campbell (Board advisor and Intuit chairman) hired David Weiden as VP of marketing to implement the “Foundation Account Strategy” which re-directed the sales and marketing team toward a limited number of very large accounts.

Not to worry, this story has a happy ending! In my opinion, three key actions enabled Tellme's comeback: Firstly, management recognized that the sales strategy (target market) and marketing mix (emphasis on branding) was not yielding the appropriate results. Secondly, they demonstrated the fortitude required to drastically alter course (consumer to enterprise). And finally, they hired the right talent and employed the use of quantitative marketing.

David Weiden, VP of marketing, developed “Project Rifle” to implement the “Foundation Account Strategy”- a quantitative fact-based approached (as opposed to opinion based) - to determine which accounts to go after. The process produced a score-based stack ranking of the customer targets and included criteria such as revenue opportunity, adoption profile, acquisition and opportunity costs. This was a painful and slow process that required tremendous skill in change management along with support from the top. Eventually, Tellme Networks was acquired by Microsoft in March 2007 for $800 million. Tellme phone network processes more than 2 billion calls per year and is used by 40 million people!

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