Social Marketing Changes Everything Part 3 – Business Case

Continuation of Part 1 – Introduction & Part 2 – Theory

Unless your company does ecommnerce, Social Marketing generally does not have its own ROI. This has been a significant challenge for most companies thinking about how to leverage social media. How do you correlate social marketing activities with tangible business impact?

Most corporate social media participation has grown sporadically out of employee participation outside of their daily work life. Most of the participants in the social networks joined through invitation, but since there are not a structured way to use these networks, corporate planning has lagged on these networks. Many companies are now putting together structured social media plans as a part of their marketing efforts, but are finding a hard time building the social marketing business case.

The business case for social marketing really involves mapping your organization’s social activites back to your business objectives, strategies, and goals. Just because your team dabbles on Facebook, has linkedin profiles, and is playing on Twitter does not make a social marketing plan. The other side of the coin is that just because you can’t measure it, doesn’t mean it doesn’t have value. The remainder of the post will outline a process for building a business case around social marketing:

• Identify Key Market Influencers
• Align Business & Social Marketing Strategy
• Develop Social Marketing Roadmap
• Build the Social Marketing Business Case

Identify Key Market Influencers –  starts with a reorientation of the traditional view of marketing’s role away from traditional marketing channels of communication. Instead, the model below is reoriented around the core of the customer experience:

Social Marketing Reorients Marketing Activities

• Reorients traditional marketing towards the online network, relationship-oriented, and influencer-driven social interactions.
• Leverages a multi-channel, multi-directional approach towards building relationships with a transition away from the structured marketing roles.
• Focused around enabling the key interactions that support the awareness, influence, interest, buying, and referral processes.

Align Business and Social Marketing Strategy

First Step is to understand the market from the company’s perspective

• Collect company’s Market Research – get everything you can get your hands on to get a baseline of the market
• Understand Value Proposition, Competition, Positioning, Differentiation, Key Description Words
• Company’s Goals, Objectives, & Strategies
• Industry Trending
• Website, SEO, & Social Media Presence Review – figure out your strengths and weaknesses
• Team Social Media Perceptions & Capabilities – you will need buy in. Additionally, you may find evangelists in people you would have never thought.

Next step is to perform online market research to understand  the following:

• Competitor Analysis – messaging, positioning, website, social presence
• Industry – associations, sites, news, blogs, industry communities (public access only)
• People – influencers, industry executives, analysts, press, buyers, consultants, bloggers, partnerships

Develop Social Marketing Roadmap based upon identified audiences, influencers, and existing relationships.

• Map audiences and objectives with the desired interactions.
• Prioritize the Social Marketing Roadmap (crawl, walk, run) based upon 3 mo, 6 mo, and 12 mo activities, budget, and resource requirements
• Proposed Social Marketing Editorial Calendar to leverage existing content, corporate development, and user generated content. Think bite-sized chunks of reusable, repurposed content that can be leveraged across many mediums. Spread the workload across a broad spectrum of people. Look for activities where you can reuse the content; ie a webinar (answer the questions from the webinar in a blog post)

Building and Presenting the Business Case

• Hard and Soft Cost Analysis – You need to have an understanding of the time, resources, and money
• Strategy Review – Make sure that you have buy-in and participation
• Budget Refinement -Understand the Resource Limitations; make sure you prioritize your activities based upon an expected return
• Program Measurement – How will the organization measure and report?
• Performance Metrics & Estimated Business Impact Executive & Team Presentations – Recruit Internal Evangelism

 Part 4 of the series will explore the possible elements of a Social Marketing execution plan.

Part 5 of the series will explore how to measure Social Marketing activities more in depth.

Social Marketing Changes Everything Part 2 – Theory

Continuation of Part 1 – Introduction

Continued at Part 3 – Business Case

The fundamentals of marketing are changing with the mass adoption of RSS. RSS allows the repackaging and redistribution of information into components which can be reused, reassembled, mashed-up, etc. RSS also allows each piece of content to have its own URL. As we transitioned from domains to pages to feeds to tweets, you are seeing increasing componentization of information. 

Social Marketing is a direct response to this changing landscape. Social Marketing is the transition away from pre-packaged messaging to evangelism (education before engagement) with focus on user interactions, relationships, influencers, & experiences. Social Marketing represents a continuation of the shift from broadcast messaging to interactive. There are some contributing factors underlying this shift:

• Sheer Size of the Web –According to Nielsen Netview, 168,670,941 active domains
• Volume of SPAM emails – My email example: 715 spam messages caught as of Monday, June 29, 2009 10:22 AM
• Need for Social Search– Search engines are still in their infancy (Google: Results 1 – 10 of about 590,000,000 for marketing)
• Rise of Social Networks – Nielsen puts the interactions on social media larger than web mail as of February
• Amount of Blog Posts– According to Technorati, close to 1M a day that also get pumped into the search engines

Through the linking, repackaging, and sharing of content;  Social Media is playing a key role in bridging the information search challenge on the web. My blog is a perfect example of this. I started this blog as an vehicle to provide thought leadership and credentialling in finding a position as a marketing executive. About a month into building the blog, I realized that my traffic had transitioned from primarily being driven by the people that I know and met to inbound links from social media, other blogs, directories, social bookmark sites, etc. Because I am on a subdomain for wordpress, I don’t get the benefit of branding my own domain so search engines really don’t do anything for me. Even if I had my own domain, my posts on marketing show up in the middle of the 590 Million indexed pages on Marketing.

Without the the linking, repackaging, rating, and sharing of content that people do on sites like Twitter(tweets), Facebook(content and people recommendations), Delicious, Digg, News Aggregation sites, Industry hubs, etc, or the blog-rolls or even the large connectors on Linkedin with the LIONs (Open Networkers); how would anyone really find anything on the web.

Hence the challenge to marketing as the traditional ways that you reach potential buyers are being overwhelmed with the amount of messaging; telemarketing, email marketing, direct mail, tradeshows, webinars, etc. A large part of this is that the internet has enabled near-zero distribution costs for messaging, so it is almost as easy to send 10,000 as it is to send one. 

The people who repackage and redistribute content or build relationships hubs play an equally important role as the creators. If you have 50 creators of content on a subject, you need one person to assemble, rate, and aggregate this content into meaningful information. The content and relationship distributors really play the equivelant role of market makers for the stock market. Without a market maker, you couldn’t have exchanges. Without exchanges, you can’t get a place to conduct the scale of trades needed to keep a market fluid. This role is going to continue to drive the market for information; in return, drive the impact on marketing. The bigger the size of the information market, the more importance the role of market makers.

That is why social marketing is so critical to marketing at large and why social marketing is changing everything. Think of information as a product that needs distribution. If you now need to make sure you have the widest distribution of content, you need to build relationships with the distributors. The manufacturer with the biggest, strongest distribution network wins. Traditional broadcast models for marketing presupposes a direct relationship. Social marketing presupposes an indirect relationship. If history is an indicator, then the indirect channels have more scale.

Social Marketing Changes Everything Part 1 – Introduction

If I asked the question “Who wants better leads, increased revenues?” I would see every hand up in the room.

” Through social media?”  I would still see pretty much every hand in the room raised. 

If I told them that they would have to changes their approach to marketing, lead generation, customer satisfaction, and their view of their market, how many hands would stay up? If I told them that they would have to take some risks, expose themselves (metaphorically), do something unconventionally, challenge their team, etc. would you find any takers? a few…

Now, if I told them that every one of their competitors is planning on doing this and that they could choose to do it early to get “competitive advantaged” or they could wait and be a “me-too”. I would find the room in two camps, split between the optomists in the face of a economy poised to recover and the business convervatives who are trying to maintain what the have in the face of a recessed economy.

I read a lot online from social media “experts”, but other than they advocate the use of  social networks like Linkedin, Facebook, MySpace, Twitter, Youtube, etc. for business (Screaming ad-like tweets “You too can make money”…) I struggle to break through the noise to connect with the real innovators who have a strategic approach to integrating social media into their full marketing programs.

Here is my two cents worth – Social Media is fundamentally changing Marketing. In my mind, it is not about how you add the social networks to your marketing channels of communication (they should be thought of as channels), but rather how you rethink marketing and brand management. The initial wave of website in the mid-90’s started to a fundamental shift in marketing. I talk to a lot of companies about social media, Web 2.0, social CRM, social networking, etc. Some think it is a FAD, most think it is fun and interesting, some are trying to use it for business, but some are taking advantage of the rest to drive growth. This shift in marketing is happening again.

I am not talking about occasionally sending something out to the 132 people on Linkedin, 675 college buddies on Facebook, and the 3750 followers that you have built on twitter (these aren’t my numbers). I am not talking about building online forums into your website. Not talking about use meebo to chat occasionally with an ex-colleague. I can go on, but the point is that social-optimized, Web 2.0 interactions  are creeping into the way that we all do business. You can use them or you can rethink your approach to leverage them to “change the rules”.

If you are a “changes the rules” type, you will need to subscribe to the RSS feed and have to come back to read the rest of the series on Social Marketing Changes Everything Part 2 – 5. I can’t fit all of the explanation into the a single post. This multi-part series will provide information on social marketing and answer the following questions:

• What is Social Marketing? (I can already hear, not another buzz word…. but think about my Web Marketing reference above)
• Why is a new definition required beyond Social Media, Social Networking, Social CRM, or Web 2.0 Marketing? (gotcha there)
• So what? Why should I  worry about this? Hint: Revenue Generation and Customer Referrals (I assumed this would be important to you)
• What does a Social Marketing strategy look like?
• What does a Social Marketing Roadmap look like for this?
• How do I leverage what I am already doing?
• How do I build a Social Marketing Business Case?
• How do I measure Social Marketing?

Now that I got the major questions out of the way, let move next into the definitions;

Social Marketing – The re-orientation of traditional marketing to reflect the new post-digital,  network relationship oriented, and influencer-driven social interactions. Social Marketing leverages a multi-channel, multi-directional approach towards building relationships with a transition away from the structured marketing roles like; product management, marketing communications, PR, Channel Mktg, & sales support. Instead, marketing is reoriented around enabling the key interactions that support the awareness, influence, interest, buying, and referral processes. ( it is a mouthful, but I am working on getting it down to one simple sentence. Give me your thoughts and I will incorporate in my next post)

Social Media – Basically, you have the social networks that you participate and the online communities that you own which are built into your corporate website. See my post on Social Media is Like Fishing for more details.

Online Communities – communities of interest built upon a foundation of Web 2.0 social networking tools; profile, blog, wiki, social bookmarking, calendaring, media sharing, etc that enable the user to interact with other users and content through the website. See my post on Online Community Blueprint for more details.

Post-Digital – If everything is becoming digital, why does digital matter? The buyer doesn’t really care if the interaction is on the web, they just want to get what they need. A lot of marketing still segments online and offline which creates an artificial barrier to developing a seamless customer experience. Social Media is changing buyer behavior, coming more fluid, and marketing must adjust the model to to support the reflected changes. See my post on the Changing Role of the CMO for further explanation.

The next part of the series will explore a new model for thinking about reorienting marketing towards interactions.

Part 2 – Theory

Part 3 – Business Case

If Content is King, What Does that Make My Writer’s Block?

I have been suffering from writer’s block for about a week on my blog. I even had an editorial calendar and the blog titles written. I got busy in meetings and I couldn’t concentrate on writing. Although, I actually have some really cool perspectives on social marketing and CRM that I have been developing, but nothing that was ready for prime time. It was interesting to watch my blog traffic to see how it would hold up without my daily posts.

As I only posted one time last week, my traffic dropped slightly, but actually held for most of the week and spiked on the day that I posted. Now, I was looking for how close the relationship between the activities that I do to promote my blog (and myself) are tied to my traffic. I am doing a guerrilla level marketing program leveraging my blog, my social networks, and a $50/mo email marketing program. Essentially, the tools available to every small business without a budget. I don’t expect to become the next Seth Godin, famous marketing blogger, but I do expect that I can build an audience with very little resources. My results tell me that I have gotten outside of my own direct marketing efforts and I am now getting residual traffic from my prior marketing activities.

In addition to assisting me in finding my next opportunity(s), I am using my blog to provide a tangible case study of what can be done on a very little budget as representation of what the strategy could accomplish with a much larger budget. I am also using the concept of the blog as a repesentation of a corporate website. In my new social marketing model, the website is becoming the focal point of all the marketing activities. Prospective customers do not really care where the interaction is, they just want to get the information they need where and when they want it. I call this post-digital because when everything is digital; then digital doesn’t matter.

To that end, you have heard the phrase “publish or perish?” That describes blogging. Also, is an apt expression for creating fresh, compelling content with strong emotional hooks into your website.

So, back to my writer’s block. If content is king, then there are a few lessons that can be applied for companies looking at building content to help drive interest in their company:

1. Editorial Calendar – You need one for your content. It saved me last week in that it still kept me on pace to do at least one post. It also will help a team of people on track.

2. Be Consistent – I was getting great traffic when I was writing every daily, sometimes twice daily; even to a simple wordpress blog.

3. Be Relevant – I write for my audience, which is my contacts, who are business executives. I try not to write for techo-wonks about the infinite depths of a technical topic. My audience is also whom I partner, work, and sell so I want to be as approachable; to appeal to the “decision maker.” I can get more technical about software and infrastucture when talking with a CTO or CIO, but I save that for particular face-to-face meetings. I find technical specs hard to swallow as “easy reading.”

4. Content by Committee – Realize that it is almost impossible to sustain a huge torrent of content by yourself; let alone make it relevant, compelling, and fresh. That is why communities are so appealing with different voices, perspectives, interaction, and ideas. It doesn’t hurt that it drives SEO through the roof, provides a larger pool of contributors, and allows for different audiences.

5. Get it Viral – Keep in mind that you already have a relationship with your network, but you need to reach a broader group of contacts that don’t know you to drive more business. Sherry Heyl, Atlanta-based social media goddess and friend, talks about building consumble bites of content that can be distributed easily. The key to success is to get your morsels of content, “sound bites”, into circulation and distributed beyond your first and second degree contacts to go viral.

To that end, I am working on creating a social marketing planning framework that I will share over the next few weeks. The social marketing plan will assist companies in building online relationships, leveraging integrated website communities, building compelling calls to action to generate website traffic,  managing effective customer experiences, and developing effective measurement systems for the above activities.

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Corporate Social Media Roadmap

One of my contacts on Twitter posted a reply back that “Social Media is a Fad”. I have been thinking about that for the last couple of days. There is a tremendous amount of momentum around leveraging social media for business. This isn’t the first time that I have heard this in the last several months, but I guess perception is reality.

So, to that end, I have outlined a social media roadmap for those who are trying to “figure out” if the hype will lead to something real. I have been around enough to have seen this conversation a few times; websites, ecommerce, web applications, and now social media. This simple roadmap is targeted to those who want to do something, but are having a hard time presenting a business case, especially in this economy.

Social Media “Crawl”

• Make sure your team has a complete profile on Linkedin –It would be nice if they were on Plaxo, Facebook, Twitter, etc.; but make sure that the profiles are complete and up-to-date; including past roles. For a lot of potential buyers, awareness of your company comes through an employee’s profile. Make sure they have a good impression.
• Make sure that everyone has the same basic description– For the company, links to the various pages on the website (including one to careers). Also, make sure there is consistency in the company name (ie. Abbreviations, LLC on the end, Website name, etc)
• Create a social media policy for employees– There is a fine line between personal and private. Social media can blur that line, especially on Facebook with pictures. Make sure that policy also includes connections to partners, vendors, customers, and other employees. I am not recommending that you curtail their ability to interact with online relationships, but make sure there is protection for the company.

Social Media “Walk”

• Inventory Corporate Online Relationship Networks – You will be amazed at who your team is connected and no one else knew it. “I needed someone who could do this” or “We need an introduction to X”.
• Identify who or which companies are missing – a key to successful networking is getting outside your own network. A lot of times it is the 3rd degree relationships that can produce the greatest opportunities.
• Run a networking program for employees – Sales people and Executives generally know how to network, but the vast majority of employees don’t. But, they represent the vast majority or potential introductions as they had lives and experiences prior to joining the company.
• Build an Online Relationship Campaign– This isn’t going out and collecting 25,000 random twitter followers, but building online relationships (across multiple social media sites) with the key influencers, bloggers, buyers, vendors, and participants in your industry. If the saying is “Sell where the customer is…” ; you need to start a program of connecting to them online.
• Start an enterprise blog on your website– designate a team approach to creating an online thought leadership center for your company. Tie your blog updates to your social media participation. I update my Linkedin, Twitter, & Facebook every time I create a new post. It provides content and value for your connections; at the same time, creates a call to action for your website.
• Cross Pollinate Your Traditional Marketing Database with your Social Media Contacts– I add all of the new contacts that I meet into my Linkedin and other social media accounts. Social CRM is becoming the new “hot” thing as companies are trying to manage the multiple (potential) customer communication channels.
• Multi-Channel Marketing now Includes Social Media– I have been integrating my social media contacts into an email campaign list that I send my weekly blog digest. I have gotten a tremendous boost to my blog traffic by integrating email, social media, and traditional networking. A multi-channel, integrated approach allows you to reach the potential customer where and how they want to communicate. Especially with our busy schedule and email overload, don’t assume because they did not repsond that they are not interested. They may not have really “seen” the message.
• Be Respectful– don’t SPAM your social contacts with random messages. Make sure that what you send them provides value to your network. They may not want to buy, but they will respect your attempt at providing value to the relationship and credentialing your thought leadership.

Social Media “Run”

• Building your own online community into your corporate website – Use social media components to create a more compelling interaction on your website. Also, this provides great search engine optimization, thought leadership, differentiation, lead qualification, customer experience management, etc.
• Build public, semi-private, and private group areas in your community– Provide value without a login through public groups, but encourage them to sign up (membership) to see a lot more. The private group areas are then used to continue the sales pursuit and provide individualized customer support.
• Integrate your community with your marketing and sales activities– By integrating your online community, you provide a call-to-action for your outbound sales and marketing efforts. Also, this allows you to leverage your corporate website more effectively during the transition from marketing awareness and interest to sales process and lead management.
• Integrate your community with Social Networking sites– Google, Facebook, and Linkedin all have member APIs that allow someone to use their membership in third-party communities. This removes one major obstacle for people to participate; the dreaded sign-up.
• Integrate your community with your Enterprise Systems– Integrating your existing content and data with your online community is important because it allows you to leverage the investment in your existing CRM, ECM, etc. systems more effectively.
• Leverage Web Analytics and Lead Scoring –An online community provides a trememdous amount of interaction data that can be measured, scored, and utlized for lead qualification.

Social Media “Sprint”

• Integrate your business processes with your online community – Customizing the interactions of the community for your business processes; customer experience management, sales support, Call-center, project delivery, supply chain, partner management, etc. This means that different audiences interact within the community, but have personalized experiences based upon their roles and goals. I serve up a different forecasting dashboard in the Product Management Group versus the Sales Group.
• Reimagining your Information Architecture– Some of the leading organizations are rethinking the traditional ideas around organizational Intellectual Property. They are begining to build flexible information architectures whereby the “community” is really the presentation layer for their corporate systems. They build interfaces as “application mashups”. Your access to information and applications is based upon just-in-time rights management. If I am working on a project, I get invited to the project group that has all of the project history, notes, documents, and applications that I need to interact with the project team. This also then is extended outside the organization to partners and customers. The enterprise is no longer a “castle” with a moat and a drawbridge, but a modern city with buildings, doors, locks, security systems, etc. This allows for more effecient business scalability.

At the end of the day, I don’t see social media as a fad. I think the hype factor will dimish along with the effectiveness some of the early adopters have been able to drive, but I see online social interaction as the next logical step in the evolution of the web and business.

Sales Gone Bad, Blame it on the Customers

You hired a new sales person and for unexplained reason, they cannot perform. They had all of the references, met quota since the dawn of time, etc. When you ask them about it,  they blame it on the customers not buying in this economy. Having run both sales and marketing in previous recessions, I know how bad conditions are for revenue generation in this market. Unemployment in some states is now double what it was just a couple of years ago. Some industries sales are off 25% or more.

It is a tough market, but… with unemployment at 10%, that still means 90% of people are employed. Sales are off 25%, that means you still have a base of 75%. Numbers mean a lot, but only to justify the point of the moment. Good companies grow even during recesssions and I grew sales 280% over one year in the last recession. You have to work harder, smarter, hire good people, and be more innovative.

So, back to your sales person. Not working out as expected? Explainable as a bad hire, yes.

3rd or 4th sales person who came in like a rock star and left like a roadie?  No, probably something else is too blame.

Chances are that you have a marketing problem masquerading as a sales problem. Not just a marketing communications problem, but chances are the sales people are having to do too much conceptual selling too early in the sales process. It shows up in presentations and meetings. What should be a 2-3 minute concept overview turns into a half hour explanation. Good sales people are natural story tellers, but if they don’t feel comfortable, don’t tell the same story each time, or look wooden; you probably have a marketing (messaging) problem.

Marketing’s role is to communicate the concept, support the sales process, and make it repeatable. Sales people in large organizations who take roles with smaller companies, which don’t have the sales support infrastructure, have a hard time transitioning to the new environment. I call it comfort with ambiguity. It is a lot harder to sell without the references, brand, collateral, and case studies.

Also, smaller organizations require sales teams to build the activity structure that large sales organization provide to their sales teams in the form of reports, quotas, and direct management. It takes a lot of self-discipline to build the structure on your own. Some larger organizational sales people do that instinctively and will work through the transition, but others need a more established sales support structure and tools to make them successful.

Marketing can only fix half the support issues (messaging and tools), but will not fix the self-discpline issue. A good marketer will come in and review your marketing collateral and listen to the “story”. Chances are that the value proposition is “fuzzy” and the audience is not well defined. By reviewing the product offering, the marketer can reset the value proposition of the offering and map it to the audience. If the core is correct, building marketing materials to tell the “story” becomes an exercise in building the visual elements that assist in communicating the concept.

A key to success is interviewing potential and existing customers. You have to speak their language and speak to their motivations.

Finally, a good marketer will adjust the marketing materials to support and accelerate each stage of the sales process. One key challenge in any sale is the “porpoise effect.” You gain momentum during a sales call, but lose it in the interim between contacts. This usually results in the sales person reselling the solution multiple times because the stakeholder gets busy and isn’t able to remember the value proposition. Good sales support from marketing allows the sales person to focus on the heavy lifting around the relationship; providing the support tools to do the communication of the concept, value proposition, and credential the organization.

Is Your Marketing Like Teaching A Dog to Read? Part 2

In part 1 of this series, I shared a story about a professor who taught his dog to read… obviously, the dog could not read at the end of the semester, but the professor “taught” the dog. Unfortunately, this is very common in marketing, especially in emerging growth companies. The companies have very “pretty” marketing materials; website, collateral, powerpoints, but when you cannot really understand the audience, value proposition, or why they are different.

The litmus test for marketing materials is whether you can use your competitors name in your materials and it would apply. Or you could insert a company name from another industry and it reads just fine. Finally, you could insert any company name and no one understands what you do.

The real challenge is that the organization did not go through a structured exercise to map the value chain: audiences to benefits to functionality to features. Here is a high-level process to do just that:

1. Focus on identifying the market & associated segments

2. Fnd the pain – immediate call to action – for each segment; ie. this is the problem or opportunity you address; your solution = benefits

3. Communicate in the language the market understands – means you need to have a market SME, customer advisory board, or perform lots of prospect interviews to understand their needs in their language.

4. Test your messaging – social media participation, sales calls, speaking events, networking events, advisory boards, analysts, etc. Frequency and time allow you to polish your messaging. I know that I am ready when I can get through the 1st several meetings with a prospect or an investor without them finding holes in my presentation and Q&A. Doesn’t mean your offering won’t have challenges in due diligence, but if you are targeted to the right audience with the right solution, the first two meetings should be about concept, relationship, and “fit”.

5. Model your marketing on the sales process – each stage is idenitfied and marketing’s support required – One of the biggest challenges to getting the marketing materials “right” is identifying the scenarios under which it will be used. If your sales process is to work through partners, then providing a generic sales presentation won’t work. If you are selling into a specific vertical, then understanding the buying process may mean that you have to have 2 different presentations; one executive and one technical for different meetings. Collateral and sales support materials are very expensive to produce (opportunity costs) so focusing on a limited number of high-quality tools versus having a checkmark for materials is critical.

6. Focus on how to speed up the sales process – optimize, accelerate, replicate – momentum, reselling, bridging – One of the biggest challenges in any sales process is the “porpoise effect”. You build momentum and then it subsides, you resell and build momentum, and then it subsides. Most qualified buyer sales that seemingly look qualified with a need, but don’t get beyond the initial sponsor die due to lack of momentum. Either the sponsor could not sell internally or lost focus… The ability to empower your sponsor to be an evangelist will assist you in maintaining momentum. Everything in sales support should be around how do we help the potential customer make a decision faster. You will close more sales this way.

7. Participate in the early sales – look for objections – price, package, credentialling, references, technology, features/functionality, language, benefits, positioning, competitors. My biggest beef with some marketing communications people is that they don’t understand the market, customers, or the products. I want to get in front of the customers and interact with the market. I need to understand the buyer behavior and get feedback to fine tune the messaging.

8. “Save your powder” – the first set of sales to early adopters doesn’t require big marketing; focus on sales support, business development, online marketing, andPR; expensive marcom, tradeshows, events, and brochureware after the message has been tested. Save the marketing dollars till you have proofed the model and are ready to grow big. My approach to marketing budgeting is like “rolling a snowball downhill”. Make a small investment to credential your sales process;  when the market is proofed, build upon the foundation.

9. Build a customer lifecycle early. Know where you are going and how you will get there. Build towards a critical mass of referencable customers. Shrink the product’s functionality & features to slightly beyond what your target market requires. Also, make sure you set customer expectations so that you can exceed them. Make sure the roadmap is clearly articulated and scales with your customer expectations and your identified new market segments.

10. Your first set of references and referrals are the most expensive & the most valuable. Focus the organization on wowing the customer and tie all organizational goals to customer satisfaction.

Making sure your marketing “dog” can actually read is critical to scaling your business. If you have to personally evangelize to every new prospect to get them to understand the concept of your product and the value for them, you will have a very expensive sales process. Even service companies need to package their services to scale effectively.

Part 3 will address the challenges of Mid-Market companies.

Part 4 will address the challenges of Established Brands.

Is Your Marketing Like Teaching a Dog to Read? Part 1

I had an accounting professor who told us a story about a colleague of his who decided to teach his dog to read. This professor crafter a full lesson plan and spent 12 weeks delivering a daily lecture to his dog. At the end of the semester, he certified that he had taught his dog to read. This obviously doesn’t actually mean the dog could read, but he delivered a beautifully, executed lesson plan.

This is a common occurance in Marketing, as well. It manifests itself in several ways:

Smaller, Emerging Growth Companies – Marketing Collateral Which Doesn’t Say Anything

A common challenge for smaller companies is the mistake that Marketing Communications equates to Marketing Strategy. The first thing early stage companies do is engage with a marcom firm and focus on building the prettiest branded website they can afford. Then they throw in the logo, marketing slicks, and a powerpoint. All of these are important, but they skip some important steps; like defining the product target audience, defining the value proposition, and mapping the features/functionality to the product benefits, validating the pricing and packaging, and then testing the messaging to make sure the priorities of the market are accounted for in their planning. This results in a marketing program that “teaches the dog to read”, but doesn’t actually communicate a clear call to action or even explain what the company does for whom…. the end result is that the actual communication and education about the product’s value has to actually occur during a sales call which isn’t very scalable. Part 2

Mid-Market Companies – Siloed Marketing Communications Channels

More established mid-market companies have a different problem in that they have mostly grown organically so they have done a good job of communicating the concept & value of their offerings. The common approach to marketing tends towards mimicking what larger, enterprise companies have done with a “pasta method” approach to marketing… throwing everything up against the wall to see what sticks… Without the coordination or the brand recognition of larger established brands, the market really doesn’t see the “get” the value of the offerings because there isn’t a cohesive multi-channel story. The lesson plan is a fully fleshed out lesson with multi-media slides, but you only get to hear half of it….

Established, Enterprise Brands – Fighting Economies of Scale

Large enterprise brands have the resources and the history to communicate brand strategy. The challenge for large enterprises is the challenges of coordinating the vast organization to deliver a consistent message. A friend of mine told me about working with one major brand that had a different agency of record for each communication channel. And the different agencies didn’t play very nicely. Now, add in multiple products, divisions, and new communications channels. Large enterprises have the access to talent and the resources to deliver the “whole lesson plan”, but without the ability to coordinate, it is like having the lecture delivered by multiple professors on different campuses.

The rest of the series will focus on strategies to enable companies of different sizes to build sustainable foundations for communicating the value of the product offerings. At the end of the day, if you cannot get your message across in a way that is compelling & differentiated, translated into actionable prospect leads, and resulting in closed sales; it is like “teaching your dog to read.”

Part 2 – Emerging Growth Companies

Online Community Lead Identification Part 3 – Corporate Community

Michael Thomas, CRMA President, and I created a generic community lead identification activities list as a continuation of  our series on leveraging corporate online communities for lead generation. This list is the baseline set of community activities that can be used to build a lead scoring system within a corporate community. It is unrealistic to assume that you will automatically be able to filter browsers from shoppers with this model, but the goal is to build a scoring foundation from which you can add company-specific indicators to identify interest.

This post will not address the actual mechanism of lead scoring in this post, but rather discuss the actual activities within a community that you could score to for lead identification.

The Top 10 Corporate Online Community Activities for Lead Identification

1. Frequency of Tags from All Activities – the ability to aggregate all the tags from the pages viewed and assign scores based upon the frequency of tags = greater number of tags from content “hits” which indicates interest.
2. Joined Groups – weighted score based upon # of groups with specific groups scored differently
3. Content Posts – weighted score based upon frequency and which group posted
4. Connections – weighted score based role of connection; employees (ie product manager higher than customer service, finance, etc) versus other customers
5. Referrals – invite a friend submittals; higher score if same domain as referrer
6. Profile Completeness
7. # of connections – shows community activity and interest
8. Visits per month – shows community activity and interest
9. Time on site in last visit
10. Forwards content to friend / email address

Your goal in leveraging these activities within a community is to identify interest beyond the cursory. You are looking to leverage implicit behaviors beyond the stated, explicit information the user provides in their profile. Market research has long identified that people will say one thing when asked directly, but will do something different when observed. “Yes, I would pay $10 for this”, but then never pick up the item when observed.

The goal of a lead identification system is to separate browsers from shoppers. The best systems eliminate false positives and false negatives. A false positive is a unqualified lead that sales has to follow up on, but in reality has no chance of closing. A false negative is a missed sales opportunity because the buyer was never approached and went somewhere else to satisfy their needs. You never knew they were really looking until it was too late.

The purpose of embedding a corporate online community into your corporate website is to create more interactions on the site. Marketers are always looking to convert a higher percentage of the web visitors that come to your website.  If you can engage more, keep them coming back, and help them qualify themselves; then your website has been significantly enhanced with an online community. Now, if you can do that and leverage the interactions and user generated content to drive better search optimization, even better.

Part 1 – https://rosenhaft.wordpress.com/2009/05/27/online-community-lead-scoring-part-1/

Part 2 – https://rosenhaft.wordpress.com/2009/06/01/community-lead-identification-part-2-linkedin-example/

Unhorsing an Entrenched Competitor

Since my last post was about first mover advantage https://rosenhaft.wordpress.com/2009/06/02/web-marketing-leveraging-first-mover-advantage-on-the-web/, this post will be a how-to on enter a market with an entrenched, but less capable competitor. The assumption is that your offering is of superior quality or has unique attributes for the market at large. There are different strategies for purely niche products, “me-too”, or purely local offerings that are the subject for later posts. This post is for that company that has developed a better mouse-trap and needs a market entry strategy to unhorse an less capable, but established competitor.

My last post discussed the micro-economics behind the marketing and this post will do the same. Displacing a competitor is all about two costs:

1. Opportunity Costs – the value of your opportunity outweighs the switching costs; time, money, resources, pain, risk, etc.

2. Switching Costs – hard AND soft costs; time, money, resources, training, risk, pain, etc.

The entrenched competitors barriers to exit are your customers barriers to entry for your offering. Many companies under estimate the switching cost equation in displacing a competitor. Many times a company has a much better offering than their entrenched competitor, but cannot seem to get traction. When you di deeper, you find out that there is much more to the “cost” of switching beyond features or a small price difference. You find out a customer has to go through extensive training, has an extended contract that is not up for renewal, or doesn’t perceive the value of the offering as worth the hassle of switching for such a small price savings.

The keys to switching are really about changing the rules of the market. Bringing something new in terms of capabilities, changing the cost structure through planned commoditization, providing a different focus, bringing a targeted solution, AND FINALLY – being easier-to-do business.

Major Factors

1. Price –  Competing on price alone is a very difficult as it actually devalues the offering and discourages loyalty. “Cheep” is different than “economies of scale”. At the onset of the article, I positioned “me-too” offerings as a different strategy. This is why… “me-too @ a lower cost” has a place in the spectrum of the market targeting the cost-conscious buyer. Knock-offs are a good example; however, this takes a different type of positioning to target the cost-conscious buyer with a specific call-to-action. This is a particular market strategy that, in reality, is a niche. If done poorly, or not by design, it can lead to devaluation and rampant commoditization. If you can match the quality with 20% less cost, you generally can attract a portion of the market’s attention depending upon the industry and the competitor (see relationship below).

2. Capabilities – Features & Functionality – This is the secret-sauce approach. We are better because we can provide better capabilities that the competitor cannot. This may be a segment of the market or the whole market depending upon your capabilities. Features tend to not be sufficient on their own to motivate switching.

Better functionality may not necessarilymotivate a buyer to switch either. If you are higher priced with better functionality, you will have trouble with major displacement . The cost factor will be weighed into the equation unless your capabilities significantly change the buyers value equation; ie you save them much more money than the offering’s cost. “Our product saved the buyer 35% in processing time which translated into $250,000 in savingsover 3 years.” If your product costs $75,000 installed, which is $25,000 more than your competitors, but you save them $$225,000 in total cost over 3 years, you can make a case for displacement. If you are more expensive and cannot calculate a hard $ ROI, you will have to rely on a combination of techniques for displacement. For products that are truly revolutionary in which you change the cost structure of the market, you can introduce a lower price, and show a better ROI; then you have an opportunity to displace a large part of the market.

3. Relationship – Customer Support /Responsiveness /Ease-of-Use / Easy-to-Do-Business – Most companies provide mediocre service by definition. Whether by scale issues, complacency, or distraction; a majority of entrenched industry players are vulnerable to displacement based upon customer dissatisfaction. The notable exceptions are the ones that really shine. Service is particularly challenging for product companies.

If you are a new entrant, make service a hall-mark of your offering. Take the time to put in place the processes that will enable you to demonstrate your responsiveness to the challenges of the market. If your competitor’s customers are annoyed by the amount of training it takes to get people productive, then this should be your focus. If a competitor takes 2 business days to answer an email, then this should be your focus. My guess is that average companies probably have 10-20% of their customer base vulnerable to switching due to service. Below average service companies probably have a lot more.

4. Speed– the axiom of “time is money” is a great selling point for a potential customer if you can demonstrate the ROI from the change. Selling that we are faster (slightly) in itself does not generally motivate buyers. Proportionality is critical. Did you upgrade your last PC because it was milliseconds faster? If so, you were a minority; hence why the PC & chip industries are rethinking the “speed is better” industry sales pitches. Save 20% in a major operation & improve quality; you have a customer’s attention. Do it at a lower cost due to changes in technology; better. Now, do it without disrupting their organization’s operations while they switch; you have a “winner”.

5. Tailored Solutions –A large competitor’s niche or market segment, may actually be your market. Once again, proportionality applies. For your competitor, a segment may be 10% of their total market. A niche may be 1 or 2% of their revenues. For a company with $2B in revenues, $50M may not be sufficient to focus. For you, $50M is a sufficient market to enter and begin your market domination. If you competitor is not focused on a part of the market, then the obvious strategy is to pick a small enough market segment that you can dominate with a more tailored offering.

The challenge is to balance the entry into the niche without pigeon-holing yourself or awaking the sleeping giant. Your ability to service this niche with ramifications for the rest of the market, may be just the wake-up call and the validation for upgrading their offering. You could create your greatest competitor; who then leverages their relationships to the market with a “me-too” offering. Your competitor could even use your “newness” against you as a risk mitigation strategy.

Figuring out how you will enter, how you will communication the value, how you will expand beyond the entry point, and how you will evolve your offering to stay ahead of the competitor is critical. You don’t want to win the initial battle and find yourself losing the war….

6. Risk Management – Most new entrants fail to gain traction because they fail to account for the buyer’s fear of change and overall inertia. “I am not really happy with our vendor, but….. we would have to go through training, we have a contract, saving that little money isn’t important, we are comfortable, we are used to it, etc.”

Pick your excuse…. what they are really saying is that your offering isn’t worth the trouble in switching. You haven’t built a sufficient case to risk switching. Contrast that with a resounding YES that certain products and services elicit. These offerings provide a significantly, measurable, emotional, and tangible improvement over what they are doing today. AND these offerings do it in a way that seems easier and doesn’t involve much risk of switching.

Pull all of the above together to build a multi-faceted, multi-stage market entry strategy and you have the potential for a “disruptive” offering. The reality is that most companies don’t have a disruptive, “home-run” where they can drive word-of-mouth merely by “building it and they will come”. The majority of younger companies will have to focus on the fundamentals and build upon their slight advantages. In essence, they will have to manufacture runs from their singles and wait for the “right pitch”. Understanding your competitors strengths and weaknesses, the market opportunity for improved offerings, and understanding the market’s risk equation are the keys to successfully entering a new market. 

There is a concept that I call “switching point” which is the micro-econmomic version of Malcolm Gladwell’s “tipping point”. The switching point is the threshold in which you have created sufficient value to convince the potential customer that the opportunity of your offering outweighs the switching costs from the competitor. This is not an absolute, in fact may be unique to each customer, but a good market analysis should incorporate an identification of this equation into the sales process. Understanding the buyer motivation, switching challenges, and pain points will assist you in displacing an entrenched competitor.