Marketing Briefs

B2B Marketing – Clouds Ahead

As I get back to the blog after a summer hiatus, one of the trends impacting B2B marketers is how B2B buyers are operating with a “cloud” mentality and expectations these days. It isn’t just technology companies like Microsoft figuring out how to move their product offering, business model and pricing to “the cloud.”

Companies providing services to B2B buyers need to adapt to the corporate buyer’s new expectations: that services are “packaged” like products, priced “by the drink,” are available without a long-term contract, and that make an immediate impact on financial results. Packaging services like products isn’t as hard as many marketers make it sound. Making services feel more like products – or “making the invisible visible”— really boils down to understanding who your customers are, how your customers are using your services, what “features” of the service they use the most and find the most valuable, how do they want to buy/pay for the service, and what kind of a commitment do they want to make.

Once you understand these essential elements, you can use them to “package” your services as products that service specific customer needs, delivered in a way they want to consume them, and priced the way they want to buy them. This also makes it fairly straightforward to assign a specific return on investment expectation to each “product” so that your customer can make the connection between what you offer and how they can grow revenue and/or reduce expense. This alone will enable many B2B marketers to help their companies set themselves apart from competitors who make it nearly impossible to connect the investment in the service with a specific outcome. Finally, while some customer segments are interested in long-term contracts because of their specific industry or business model, most companies are looking to make shorter commitments even if your current service offer is not set up to be sold that way. In addition to slowing down your sales cycle, this also results in significantly narrowing the universe of buyers for your service.

Once you understand how your customer would like to buy, you may need to re-think how you can deliver your productized service in a way that allows your customer to buy by the month or year vs. multi-year contracts. There are many ways to do this, depending on your specific service and business model, including increasing the monthly fees for shorter term contracts to cover your upfront costs, having a balloon payment at the end should a customer leave you before you have recouped your start-up costs, or offering financing through a third-party so your customer can avoid having to come up with upfront cash while benefiting from a fixed monthly fee.

At the end of the day, B2B marketers are going continue to have to keep thinking like consumer marketers with an eye for making their company products and services available in a “cloud-like” way.

Start the New Year Right By Balancing Customer Acquisition and Retention

We have the first 10 days of the new year behind us, email boxes cleaned out from the holidays and should be looking ahead to starting the year with a good first quarter and build up of first half momentum to meet annual targets for profitable revenue growth. Marketers must focus on many priorities – build the brand, develop new solution offerings and line extensions, continually infuse the “voice of the customer” into developing market strategies and positioning, etc. – but the top priority on any list has to be focusing on acquiring new customers while retaining and growing revenue from the current customer base.

 

Achieve the right balance in your marketing for new customer acquisition and current client retention, resulting in increases in revenue, profitability and customer satisfaction, by following these five key steps:

 

Targeting – The first step focuses on “the who” for both current customers and new customers/segments to target. Marketing needs to take ownership of identifying the highest potential customers for both revenue growth and margin enhancement by conducting analysis of the current customer database by revenue, product, profitability, region, and channel; market segmentation research focusing on prospective customer targets; and thoughtful construction of go-to-market programs, messages and promotions. The target database to drive this investment in marketing to the right targets is what will yield the best Lifetime Customer Value. Ensuring your teams don’t rush past the “who” to the “what” is imperative in ensuring you have most effectively allocated your time and budget resources to capturing the right business.

 

Retention – Most marketing teams don’t spend enough time on programs to retain customers and expand their usage of company solution offerings. While there is indeed pressure from sales and leadership teams to invest mostly in new customer acquisition, the reality is you must fight to maintain a more balanced view of keeping the customers you already have while adding new ones to the company roster. In addition to reducing churn and improving customer satisfaction, use an on-going dialogue with your customers via formal and informal research channels (focus groups, internet and mobile surveys, engagement via social media networks, customer user groups, etc.) to gain the insights you need for understanding what they’re saying about your product or service, how they’re using it and how they believe it can be improved. This insight is an invaluable tool to use when developing your strategies for up-selling or cross-selling existing or new products. This attention to retaining and growing margin from current customers improves your Lifetime Customer Value and benefits you in the new customer acquisition mode due to the ability to leverage a positive customer base in testimonials.

 

Acquisition – Whether your company is marketing to consumers, large enterprise or small business customer segments ( or some combination), ensure your marketing strategy and teams are clear about what the “net new” customer acquisition goals are by customer segment, product/service line and geography. Additionally, assuming you’ve spent the necessary time on targeting and segmentation upfront to drive your marketing plan using facts, successful teams are also optimizing the mix of what channels they plan to use to reach prospective customers where and how they want to be reached. This includes looking at the mix of online/offline channels, direct/indirect channels, what social media networks each prospect segment uses, etc. With the right understanding of the goals and marketing mix, you should establish up front what the goals are for revenue and profit expected per customer and the expected cost-per-acquisition targets so that you have a way to measure the effectiveness of your programs and assumptions.

 

Engagement & Activation – Integration of marketing tactics, channels and programs is never out of style. In both your retention and acquisition programs, ensure your engagement and activation efforts leverage the right mix and integration of all facets of marketing – effectively making every dollar spent work like five dollars – including web/online marketing, social media, email marketing, search engine optimization and marketing, online/offline direct marketing, advertising, PR, alliances and channel marketing to name a few. Equally important is to ensure you are engaging with internal colleagues who become critical brand ambassadors throughout your organization at each customer and prospect touch point.

 

Measurement – Last and certainly not least, is measurement. I’ve written in past blog entries about the importance of measuring your marketing efforts and spend against goals that are agreed upon UPFRONT by your other cross-functional management team colleagues. Not every marketing program and effort is going to yield the results you expect – but what are the results you expect? It’s not unreasonable to attempt to have a measurement component built into every program at its inception. Metrics for measuring results can include specific retention measures; impact on lifetime customer value; growth in revenue, profits and market share; cost-per-acquisition; and number of new customers added and current customers retained. Every program should also include an ROI measure by product, channel and customer segment.

Marketing 2010: More Strategies for Measuring Results

In your 2010 marketing planning, measurement isn’t a nice thing to do; it is an essential thing to do. People in the executive suite throughout organizations are talking about driving ROI, delivering ROI, and measuring ROI. In these economic times, you can't escape it.

  

As you plan, incorporate both qualitative and quantitative methods to measure the effectiveness of your marketing programs. For example, you could look at the "health" of your prospect database and at how you are advancing conversations with your targeted prospects. In business-to-business enterprise selling, you can’t deliver your message to a prospect in a five-minute phone call or a one-hour sales visit; you have to deliver it over a series of conversations and continue your dialogue by utilizing a combination of electronic marketing, social media and phased e-mail campaigns that are highly relevant.

 

Are you appropriately leveraging technology to supplement the regular reach-outs from sales representatives? In addition to providing sales support from industry events, local seminars, advertising, and public relations, also monitor your database health, Web stats, time on site, and where visitors are spending time with you in an interactive dialogue with the company.

 

How do you plan to measure whether your campaigns are working? You'll want to know whether people are clicking through and spending time at another part of your site, which can lead to a good news/bad news situation. The good news is that you brought them to your site; the bad news is that they are not moving on to the next step. Plan to measure how many sales leads turn into visits, how many visits turn into proposals, and how many proposals turn into sales. This allows you to apply some method of accountability to every program.

 

It is important to have clear goals that are accepted across the organization. Once you have clear goals, you have to realize that technology is not a cure all. You have to be realistic about what you can measure, how you can measure it, and whether it is timely enough to measure at all. It is great to say that you want to achieve something, but you have to make sure you have the technology tools you need to measure program effectiveness. You also have to make sure you will receive the results early enough to help you adapt. You may have to take an extra step and circle back to the cross-functional people you are working with to adjust how you are going to use your measurement yardstick.

 

It is important to have individual ROI goals for each project. You can find a measurable component in every program. One of the ramifications of not effectively measuring accountability is risking the marketing function being relegated to the tactical sidelines versus acting as a critical strategic partner in shaping the company’s success.

Marketing 2010: Drive Efficiencies By Thinking Global

Marketing leaders at larger enterprises doing business globally can drive further efficiencies in their 2010 marketing budgets by putting in place the right frameworks to foster global planning and concepting. This isn't easy since there exists territorial attitudes related to budgets and staff that "sit" outside the corporate office in regions around the world. This happens even if there is a "solid line" reporting relationship from the regional marketing leaders and teams to the corporate CMO because the allegiance to the local market leader is usually strong.

However, that shouldn't stop global CMOs on insisting on driving global concepting and planning for as many initiatives as appropriate. One way to do this is to work closely with your financial officer counterpart to demonstrate how this will save the corporation money, while delivering a more consistent global approach to customers, prospects and partners. The power of the purse will help make this an imperative for 2010 but ensuring budget dollars for concepting key global programs are removed from regional budgets.

Now I'm not suggesting that there are not specific differences region-by-region that can all be captured by a one size fits all approach. There are, however, many programs that can be concepted and planned centrally and then simply localized. Most companies consider this with basic collateral, business communications and global events, but do not look at how this concept can be driven (with some extra work and pre-planning) through most of the marketing programs a company executes.

I've found the key to success is to institute central planning and execution with a dose of local programs and execution that happens in each region. I've established global strategy teams made up of the senior leaders of the corporate marketing functions, regional marketing heads and a representative from each major external agency partner. I've typically branded these internally, "TeamGevity" or "TeamIomega" for example, and have created a sense of mission and purpose. This way it hasn't turned out to be "corporate" trying to execute one program for every market but a global team planning the major initiatives to eliminate waste and local market re-work. This idea isn't that much different than Ford trying to create several global car platforms versus having every car in every region using all different components.

This "embrace and extend" approach has served me and my teams well at multiple companies. We've planned and strategized on all programs that could be used across regions. The regions would then "embrace" these corporate programs, "extending" them as appropriate into their local markets. Additionally, these would be supplemented with region-specific programs and lead generation programs where a global, corporate program wouldn't make sense.

While the real reason to aim for this approach is to deliver better marketing, a side benefit will be reduced cost to your company. And in this economic environment, that's a real win for marketing.

Marketing 2010: Is It Marketing if You Can't Measure It?

I believe every marketing plan, program and expense can and should be designed with a measurement element built in at the very beginning. After years of leading teams, assembling plans of all descriptions and participating in many budgeting cycles, it's clear to me that every marketing initiative CAN be measured in some way and shouldn't be funded if it isn't measured.

There's the quote I'm sure many have read (attributed to a number of different sources) that says, "I know that half of my advertising budget is wasted, but I'm not sure which half." While that was once probably true, today's marketing teams need to build in measurement as a fundamental requirement before launching new initiatives. Businesses are under tremendous pressure to increase the growth rate of revenue and profits, and marketing has to demonstrate how what it is doing is not a "nice to have" but a value-added partner with sales in delivering on forecasted growth.

Measures used to gauge effectiveness of programs can include things like how many leads are actually converted to qualified pipeline opportunities (as recognized by the sales team), registrations at tradeshows and how these are qualified and moved into the pipeline, and effectiveness at increasing awareness. You may also want to focus on how marketing programs are expanding use of your products or services by the installed base. There are many others and you can be quite specific as you build in measurement components at the program level. You should also consider running your ideas on what is meaningful measurement by both your financial officer and sales officer counterparts to ensure you all agree upfront on what constitutes meaningful indicators of positive results.

As you put the finishing touches on your 2010 marketing plan and budget, think about including a section on measurement ... and then follow-through during the year to ensure your teams are measuring how their marketing initiatives are impacting business results.

 

Current Customers Hold Key to Margin Enhancement

As you prepare your 2010 marketing plans, if you’re like many companies you’re wrestling with how to grow the business while holding the line on margin compression and erosion from current customers. Many businesses find themselves having 25 percent or more of their current customer agreements coming up for renewal each year. In this economic climate, current customers are going to be looking for price reductions to renew. B2B marketers should be looking to their current customers as the way to enhance their margins vs. eroding them.

 

How?

 

Now is the time to review your current product and service portfolio and analyze which customers are currently using which parts of your product portfolio. This segmentation and analysis typically takes some time due to data residing in a myriad of systems. That’s why most marketers focus their time and effort on aiding the sales team in adding new customers. Frankly, from a marketing perspective it is often more glamorous, fun and less analytical to continue to create new lead generation and awareness campaigns.

 

While new customer acquisition must continue to be supported, by focusing on the installed base with targeted marketing campaigns, you can protect your margins at renewal by ensuring your current customers are aware of the breadth of your offering and tailoring specific packages to customer segments. That way at time of renewal perhaps instead of losing margin you’ll be able to maintain or grow price and profits through having your renewed agreements include increased customer consumption of what you have to offer.

 

As you plan 2010 programs, don’t lose sight of tapping your current customers for increased  growth in revenue and margins.

 

 

Are Your Marketing Tools and Sales Process In Sync?

One way to drive additional synergy between your marketing and sales investments, is to clearly map your sales process with your prospecting activities and supporting marketing tools and resources.

Typically companies do a good job of mapping out a defined sales process, with key "gates" that opportunities must move through from entering the sales funnel to coming out the other end as a new client. Against this process sales teams usually understand what prospecting activities they must execute to build the sales pipeline. Finally, marketing also usually has a strategic marketing plan or framework against which tactical programs are executed.

However, bringing these three streams together -- sales process, prospecting activities and marketing resources and tools -- is not an area where many companies excel. I believe marketing needs to take the lead in getting these points of integration to happen. While this leadership can come from marketing or sales, to ensure the marketing investment (read "cost center") is most effective with demonstrated ROI and programs that sales supports, marketing has the most to gain to ensure this integration happens.

This example is from a company where we had a successful partnership between marketing and sales with a collaborative approach to integrating the marketing output with the sales process and activities.

During this time of year as you're planning your 2010 marketing approach and activities, sit down with your sales counterparts to map out a plan that ensures you're in sync.

Make Every Dollar Work like Five Dollars!

Do your marketing and sales activities extract enough value for every marketing dollar you spend? Think about these ideas as you plan your 2010 marketing roadmap and budget.

 

Form Alliances and Partnerships that Deliver Co-Marketing Dollars: The return on your investment doubles when you only pay for half of the campaign.

 

Negotiate Extras: most marketing investments can be negotiated to include more than what is actually being purchased. Get online banner placements thrown in with ad placements. Have the printer use the extra stock from brochures to deliver direct mail postcards. Ask the trade show sponsor to upsize your ad in the program. Get maximum value from every dollar spent.

 

Close the Gap Between Marketing and Sales: In the end, sales delivers the real return on marketing’s investment. The ongoing battle between sales (they don’t utilize the leads!) and marketing (all of their leads are terrible!) is counterproductive to working as a team to maximize the efforts of both groups. Open communication and genuine integration are the keys to optimal return on the marketing investment.

 

Give Prospects More Than Just a Slick Marketing Pitch: As the competition to get customers’ attention grows, so does their skepticism of everyone trying to get it. The company that delivers meaningful information to help the customer address their business objectives will benefit by positioning themselves as an industry expert, and elevating themselves above the noise. For the cost of a flash pop-up window, a company can instead deliver a whitepaper – not on their product, but on the space. Web content can go beyond self-promotion to offer industry insights. Blogs can summarize current analyst reports, etc…through value, vendors build trust.

 

Leads – Decide What To Do With Them: Filling in the blanks between lead generation goals and revenue goals is key to realizing meaningful ROI. What is the process for qualifying and following up on a lead? Is that process consistent with the size and bandwidth of the sales team? How is it tracked? Who is accountable? What stages does a prospect go through as they move “down the funnel”?

Getting the Best Results Out of Your Agency Partners

If you use the services of an external marketing agency, to get the best thinking, ideas and execution ensure you treat them like a true marketing partner and not just a vendor supplier.

 

Listen to Them: You value your co-workers because they bring knowledge and expertise from previous experiences. You get shortchanged when you call on your agency merely to execute. Get more value by allowing them to offer opinions on how to achieve your objectives. Ask them how they have helped other companies with similar challenges, and leverage what has been proven to work for others.

 

Compensate Them: If a retainer agreement is not appropriate or realistic, consider structuring their fees to include bonuses when program objectives are met, to give them an added investment in the success of your campaigns.

 

Limit The Number: There is an argument for utilizing specific agencies for each area of expertise, but there has been massive consolidation in the industry so, in many cases, the PR firm, web programmer and social media agency are all one company now. Limiting the number of agencies you work with allows you to centralize your budget, thereby being a “bigger fish in their ocean” and receiving improved service and dedicated support. It also reduces the amount of time you spend training and cross-training agency teams on who you are and what you do.

 

Involve Them: They should be on every mailing list, e-message distribution, customer announcement, etc. The more information they have, the greater insight they have into your organization and the more able they are to act as an extension of your team.

 

Structure Them: Establish measurement objectives and reviews. They are expected to perform as a part of your team, and should be treated as such by being held accountable for clearly outlined objectives.

 

Trust Them: They are expert at standing outside the forest that you are in and seeing the trees. Remember that you are not your target audience, and work to provide direction to accomplish objectives that will address creating awareness and demand with your target audience.

"Remodel" Your Small Business Marketing

If you are small business owner or work for one, then you probably are responsible for wearing many hats. Trying to keep the dayto-day operation going, putting out fires, and focusing on delivering superior customer service is consuming.

 

You can take a few steps that will allow you to DOUBLE the value you are generating from your existing marketing investment. Are you interested?

 

I call this “remodeling” your marketing versus continuing to launch new programs that don’t capitalize on the momentum you have built in your existing efforts. It’s human nature to keep trying new approaches to marketing and jumping from one great idea to the next. I am not suggesting that you should never change your marketing. However, investing the time to really figure out what is working pays bigger and faster dividends than starting a program, running it awhile and then starting another.

 

Conduct a Marketing Audit

 

Make a list of all the marketing programs you have executed for the last 6-9 months. If you don’t have a formal marketing plan, list out all of the activities that could be considered marketing that consumed either dollar resources or time resources. Assign the amount of revenue or leads that you generated to each program. If you don’t have this information, you can either assign these values using your best judgment or if this isn’t possible your first step will be to track your programs going forward for 3-4 months before beginning your audit.

 

Measure, Analyze and Re-Direct Resources

 

Take these measurements of results against the resources expended to figure out which programs are doing the heaviest lifting against your business goals. Sort your list of programs from “best performers” to “worst performers” and stop doing the bottom half of your list. Re-direct the resources from the programs you cut by taking half of what you cut and applying it to the higher performing programs and the other half of what you cut to try new initiatives.

 

Remodel Your Marketing Twice a Year

 

Performing this analysis and re-direction twice a year should yield you about twice as much value out of your existing investment versus what you are generating now. Every business or non-profit will experience varied results, but this analytical approach to your marketing will allow you to use facts and figures to cut favorite projects that just aren’t helping you achieve your business goals and to focus your time and money on the superstar marketing activities that drive revenue and results.

 

Leave me a comment to share your “marketing remodeling” tips and successes.