Target Marketing: Still essential, still evolving

August 13th, 2010

Last night, 50 Wharton alums gathered in downtown Boston to hear Professor Peter Fader speak about “The Paradoxes of Interactive Media”.  Of special interest were Dr. Fader’s comments on how target marketing has changed.  His message: when profiling your most promising prospects, focus on differences in behavior rather than demographics.market demographics

To illustrate his point, Dr. Fader looked at the data underlying a study that concluded that Hispanics were more likely to purchase DVDs than Caucasians.  He began by acknowledging that the conclusion was accurate–but not particularly useful.

Lies, Damned Lies, and Statistics

First he called our attention to the difference in purchases between the two demographic groups which, although statistically significant, was only separated by a couple percentage points.   A difference that he said would not yield enough revenue to justify unique marketing campaigns.

Then he presented a second graph which showed side-by-side comparisons of the two groups’ purchasing behavior.  The curves were identically shaped bell curves–although the level of the curve representing Hispanics’ purchases of DVDs was slightly higher.

In short, the differences within each group–which recorded purchases under varying circumstances–trumped the differences between the two demographic groups.

Data you can use

His point? In the old days, our only option was to segment markets by visible (i.e. demographic) differences.  Today, however, we have access to behavioral data–which is often far more useful–thanks to the web.

His suggestion? Follow the clickstream to learn how your buyers behave, especially the ones that purchase, and plan your marketing campaigns accordingly.  Rather than grouping those in similar demographic categories, group those with similar behavior (e.g. the order in which they do things, the events that trigger action)

The catch? Fader says that other studies show that you can’t predict the behavior of individual participants, only populations, so you’ll need a lot of data to gather enough information to segment your market in a meaningful way.

Takeaway? The principles underlying Marketing 101 remain the same, the execution is constantly evolving. That’s what keeps marketers awake at night…

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The search and social media paradox

July 15th, 2010

Lee Odden, a recognized expert in the areas of search and social media, recently ran the 2010 Digital Marketing Poll on the TopRank Online Marketing Blog.  The poll, presumably directed at marketers, asks: “What 3 online marketing channels & tactics will you emphasize in 2011?”

TopRank used Twitter to promote the poll–and did so on multiple occasions.  Presumably, a lot of people received notice of the poll:  @TopRank has 6061 followers, the update was retweeted 262 times, “liked” by 45, and likely got additional visibility through other social sharing media*.

How Odden attracted responses

Odden followed all the recommended steps to motivate engagement:

  1. He posted the poll in a blog that attracts a highly targeted audience–online marketers interested in obtaining high search engine ranks.
  2. The post’s topic is highly relevant to the target audience, a group whose success depends upon selecting cost-effective marketing tactics that will elevate their messages above the noise.
  3. The post is even more valuable because it promises timely data that is not readily available.
  4. Odden heightened readers’ awareness of the challenges they face by asking questions such as “Are social media and content marketing the glue that brings multi-channel marketing together?”, “Is 2011 finally the year for mobile?”, and “Will companies focus on more holistic online marketing?”
  5. He also encouraged engagement by soliciting readers’ advice on whether he focused on the right areas.
  6. He offered a “Top 10″ list–something all the pundits recommend to engage interest–and delivered by providing a running tally of the poll’s findings.
  7. Following best practice, Odden promoted the poll a number of times–which is an important factor in increasing response rates since not everyone responds the first time they get a post.

Calculating success: the response rate and conversion rate

Odden’s stated goal was to get 200 respondents.  At first glance, this seems conservative; however, it is well in line with industry statistics.  Consider the following loose assumptions for demonstration purposes:

  • 6000 people received the initial tweet from TopRank when the blog was posted
  • Retweeters and Facebook followers average 10 followers (feel free to use your own numbers)
    • 2000 (262 x 10) received the post via retweet
    • 450 (45 x 10) received the post via Facebook
    • 500 saw the post on social bookmarking sites (again, my swag)
    • None of the indirect respondents forwarded the link
    • Twitter follower response rates (assumptions, once again)
      • 5% the first time TopRank tweeted the post
      • 2.5% the second time TopRank tweeted the post
      • 1.25% the third time TopRank tweeted the post
      • 1% response rate from indirect recipients

The logic underlying the assumptions

Most direct response campaigns, of which this is one, anticipate getting response rates of less than 1%, more if the list is as highly targeted as the @TopRank list is.  Direct marketing typically yield low response rates since most people only attend to messages that they see as relevant when they receive them.

Resending messages increases the number of responses because recipients’ views of what is relevant depend on what they are doing at the time.  Nevertheless, each subsequent communication gets a significantly smaller response rate than the one preceding it.

Response rates, however, are not conversion rates.  Here the response rate would be the number of people who clicked through to the poll.  The conversion rate is the number that chose to participate in the poll.

The result of using best practices

Using these assumptions, TopRank would receive 1230 responses (plugged the above assumptions into Excel) and the 232 people that completed the poll would represent a 20% conversion rate of those responses.  That said, the assumptions are just guesses, so feel free to recalculate using your own inputs.

So what’s my point?

What struck me about the response rate is that it is a clear demonstration of how difficult it is to convert others.  Odden is well-known, well-respected, offers high value, and in short, did everything right.  Yet, even he didn’t draw enough responses to perform the cross-tabulations it would require to answer questions about the applicability of his information.

What does this mean for the rest of us who are trying to sell a product or a service?  Here are my thoughts.  We need to:

  • Do everything that Lee Odden did
  • Find a way to reach many more prospects, all of whom are ideally as qualified as Odden’s are
  • We also need to articulate the value of our offer in a number of ways in an attempt to increase the percentage of our highly qualified prospects that will find the messages relevant
  • We need to communicate our messages more often than Odden did, which translates into running our campaigns over much longer periods.
  • Then, once we achieve the first conversion, we need to do it over again; since unlike Odden, we are selling a product or a service and require more interim conversions than Odden did.

The paradox of search and social media

In short, search and social media can help marketers identify more qualified prospects and accelerate the process, still it’s as challenging as ever to achieve our goal: getting the most qualified prospects to “raise their hands” when they’re ready to buy.  Everyone says that social media is the answer, but what if–no matter how trusted the source is–others still don’t have time to attend to the message?

What are your thoughts about this analysis?  Is it on target?  Does it address the right questions?  Reach the right conclusion?  More important, what are your perspectives about where marketers should spend their resources to elevate their messages and accelerate conversions?

* Numbers on the day I wrote this post.

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The price of creative collaboration

July 12th, 2010

Thanks to Olga Taylor for today’s guest post. Olga is a freelance copywriter from Jamaica Plain, MA who enjoys sharing insights about her work. To reach her send mail to olga.taylor@quartesian.com.

Her post:

I am a people pleaser. This means that not only do I want  clients to be happy with work process & outcome, I also want them to feel good about my price. I’ve learned that it is often a challenge even with old clients who like and trust what I do. But more so with the segment of new clients who need original & creative work on a shoe string.

The problem, if it’s there, is always the same. The client thinks it will take two revisions, when, in fact it takes seven. The reason for the problem is also pretty much the same from one client to the next. As the creative process gets under way, ideas flow and questions arise that could not have been anticipated. As questions come up, more people get drawn into the review cycle; and what had been agreed to at a previous stage has to come apart and be rebuilt.

I respect & admire creative collaborations. I will go as far as to say that nothing truly worthwhile can come out of a single source. A great new concept or product requires a “cross-breeding” of existing perspectives and ideas. Sometimes this occurs inside one person’s head. More often, it is a result of collaboration: client-supplier, technical-creative, user-designer… or all of the above & more.

For that reason, I believe that the smartest thing a project leader can do is to remove all blocks to effective collaboration. Watch out that pricing structure does not become one of these blocks.

Let’s say the vendor charges by the hour and the client is worried about running up a huge bill. The client might feel pressured to limit communication, creative options or review process. As a result, the project might suffer or end up costing even more, because changes aren’t made early enough in the process.

A variation on the theme is a fixed budget with a limited number of reviews. What’s one review? And what if the client thinks the vendor didn’t get all the specs quite right?

Most clients today don’t want to be billed by the hour. Being a pleaser, I give them what they want — a fixed budget, but also what I believe they need — unlimited revisions until the bitter end! Which means that the price that I quote “seems high”. When all is said and done, I know it will end up being fair. However, being a people pleaser, I hope every time that the client will prove correct, the project “quick” — and having finished way ahead of time, I will tell my client: “we came under the budget, so I am not going to charge you the full price.”

Like this post?  Olga also co-wrote  Cross-selling for Small Businesses.

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New social media site invites users to review public health care services

June 29th, 2010

As an adjunct professor at Simmons College’s Department of Health Care Administration, I received a press release (the first paragraph of which appears below) with a request to spread the word.  I should also disclose that I know a couple of the donors involved through a separate relationship, and have known about this project since its inception.

Press release lead paragraph

“Simmons College’s Department of Health Care Administration launched a new website that will gauge the experiences of Boston-area healthcare users who have their services paid for by public programs. USisUS.net, which stands for the United States is Us, aims to reach out to minority populations and healthcare users who receive aid through programs such as Medicaid, VA, Commonwealth Care and others.  Users of the site can review these comments and ratings about particular health care providers.”

The many faces of Barbara Bix, Managing Principal, BB Marketing Plus

This post discusses my observations from several perspectives including that of a health care marketing consultant, a social media marketing consultant, a user of services, a citizen, and a taxpayer.  So, please join me now as I switch hats and weigh in from each of these roles.

Health care marketing consultant

The topic was also of particular interest to me as a health care marketing consultant.  There’s a lot of debate about what constitutes health care quality.  It’s hard to measure since we’re not widgets.  Each of us comes to our health through a unique combination of genes and behavior–and at different stages of wellness/illness–before health care providers even begin administering care.  For another, most of us don’t have the medical knowledge to assess the relative quality of our treatment regimes or outcomes.

Nevertheless, user perspectives are important; and health care providers have begun to seek them out over the last decade or so.  For one, we’re the only ones who know how we feel.  For another, we are qualified to rate some of the more visible aspects of our care–as well as our overall experience during the care process.

User of services

I see this site as a “Yelp” for government services.  The interesting twist is that citizen reviewers are not only users of the services and prospective users of the services, but also citizens who pay for the services–whether they ultimately use them or not.

As soon as I heard about this concept, my first reaction was, “We need this for our town”.  As a user, I think it’s a great way to hear from trusted citizens about new services of which I might otherwise have not been aware–as well as to get recommendations for which services to use when I have a choice.

Taxpayer

As a taxpayer, I’d find it useful to have information that helps me evaluate our programs and help me determine for which enhancements to advocate.  Today, I read about controversial decisions in the local newspaper and wish I could get a better understanding of the pros and cons from the people these decisions will most affect.  I also love the idea that administrators of those programs have a way to get specific actionable feedback on services without extra effort.

Social media marketing consultant

One of the best ways to develop superior offerings is to collaborate with clients, and prospective clients, to design and then improve the services you deliver.  A frequent “unintended consequence” is that users then feel more engaged and more involved, just because someone sought their feedback.  This engagement often leads to even greater satisfaction.

The magic of social media is that you can so easily, and inexpensively, reach so many of the people you aim to serve, get instant feedback, and have a forum where they can work as a group to refine that feedback.  This aspect is often referred to as the “wisdom of the crowd”.

Bias

Yes, there will be bias.  You’re most likely only to hear from those who are “high responders”, extremely satisfied, or extremely dissatisfied.  The hope is that, as with many other social media, “the crowd” keeps the conversation centered and useful.  I know that when I’m the user, I look to the crowd for overall sentiment, and to individual reviewers’ comments only for the details that they will bring to my attention.

Your perspectives, please

What’s your take?  Have you used any programs that evaluate public services?  If so, what value have you derived?  What reservations do you have?  What feedback do you have for USisus.net as they start to spread the word?

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How search and social media will shorten the B2B sales cycle.

June 21st, 2010

Paul Gillin, author of The New Influencers and a leading authority on B2B marketing,  just published a draft of the first chapter of his upcoming book, Social Marketing to the Business Customer on his blog. He had me on the second page when he spelled out what I’ve always seen as the differences between B2B and B2C sales–but have never been able to articulate as clearly.   The points Paul makes –about buyers’ focus on value, group decision-making, and sales cycle length especially resonate with me as someone who focuses on marketing IT products and professional services to corporations.

B2B transactions are “bet the company” decisions

As I was reading, however, it occurred to me that the characteristics that both Paul and I ascribe to B2B businesses may be a function of scale and complexity, rather than just the target audience.  After all, most consumer acquisitions are not “bet the company decisions”.  Notable exceptions include real estate, new jobs, mates, and the most major of surgeries.  In each of these situations, individuals’ buying behavior is more like that of businesses than consumers.

Nevertheless, I still think the points that Paul outlines are what distinguishes most B2B from most B2C transactions.  Even those B2B purchases that are not “bet the company” decisions, occur in the spotlight, are ones for which the buyer is held accountable by others, and are therefore “bet the job” decisions.

Long sales cycles are expensive

Of the points Paul mentioned, my own focus as a B2B marketing consultant has always been on shortening the sales cycle.  As he notes, B2B sales cycles stretch out because success depends on addressing the needs of multiple people at multiples stages of the buying process, each of which have different priorities.

Long sales cycles are expensive.  Ironically, any time that salespeople spend on prospecting for new business, building relationships, pointing out the benefits of the company’s wares, or ensuring that each stakeholder gets satisfactory answers to the questions she or he has is relatively unproductive.  The company only makes money when its salespeople are closing deals or negotiating their terms.  Any time spent on the activities leading up to a sale has a huge opportunity cost, because that’s time that the salesperson isn’t closing other deals.

Advance preparation is the secret to accelerating the sale

Advance preparation is the secret to shortening the sales cycle.  Salespeople tend to only have messages for a few of the audiences that they need to reach.  Because they are under pressure to close the transaction, salespeople don’t have the time it takes to research and prepare the nuanced responses that others who influence the buying decision often require.  Consequently, their communications are not as powerful as they could be–and the sales cycle stretches out as prospects continue to shop.

This is where B2B marketers, and B2B marketing consultants like me, make their greatest contribution.  Our job is to anticipate who will be involved in the buying process, what they’ll need at each stage, and how they prefer that the company meet these needs–with the goal of developing targeted communications and tools well before Sales needs them.

B2B marketers are at a disadvantage

Unfortunately, we can’t take advantage of many of the tools that B2C marketers have at their disposal.  They get reams of data gathered through surveys and via scanners at the point-of purchase.  They also have many media in which they can cost-effectively place highly-targeted ads.

Our audiences are smaller and buy less frequently.  They are also less homogenous both due to the greater complexity of the B2B buying decision–and because our total available markets aren’t generally large enough to divide into sizable segments.

It’s, therefore, hard for us to get relevant survey data.  For one, it’s hard to capture the nuances of complex buying decisions in a survey that’s limited to forced choice answers.  For another, there aren’t enough of us, targeting any given market segment, to justify third-party investments in any but the most general survey data.

Historically, our best alternative, for getting at the heart of the buying process, has been to gather information from decision makers through one-to-one interviews, or in small groups.  Doing so requires special skills to avoid predetermining the answers by the way we pose our questions.  Moreover, because the available data collection methods were expensive, we could only speak with relatively small samples of the population.

From a communications perspective, we’ve never had a cost-effective media.  As Paul notes, our goal is to reach multiple audiences that buy relatively infrequently–and whose needs vary depending on where they are in the buying process.  If we purchase spots in broadcast media, we’re paying to reach too many people we don’t care about.  On the other hand, direct marketing, which allows for more targeted messaging is also expensive–since we still don’t know which prospects will be receptive to our messages at any point in time.

Search and social media promise to be a tremendous boon

Search and social media have the potential to make us both more efficient and more cost-effective.  They promise to improve both the quality and quantity of the information we can obtain.

By searching on germane keywords, we can find out what prospects have to say, unaided, on relevant topics.  This information will add value, since discussants are likely speaking about what matters to them– rather than just responding to questions about the dimensions that we think to ask about.  Search and social media also provide access to the crowd, decreasing our reliance on the insights of a few available individuals.

The news is even better from a communications perspective.  Organic search and pay per click dramatically reduce our costs.  One is free and the other only requires us to pay for audiences that are likely receptive to our messages.  We also can reach members of our target audience through social media via the online peer groups in which they participate or the lists members make of their peers using tools such as Listorious.

The availability of better tools is a double-edged sword

The good news is that search and social media have made getting the right message to the right person at the right time easier and less expensive than ever–and should enable us to significantly shrink the sales cycle.  The bad news is that customers will be less forgiving of companies whose marketing messages still  do not anticipate and address their needs.

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Linked In: 5 tips for generating sales

June 14th, 2010

In today’s guest post, fellow Wharton Alum, Craig James, offers tips for leveraging Linked In to generate sales.  Craig is the founder of Sales Solutions, a sales productivity improvement business located in suburban Boston.  Contact him directly toll-free at 877-862-8631, or by e-mail at craig@sales-solutions.biz

Sales people and others responsible generating business for their organizations will find LinkedIn a valuable tool.  Unlike sites such as Facebook and MySpace, LinkedIn tends to attract those looking to develop business relationships, as opposed to friendships.

LinkedInBut while many of us are familiar with the basic features of LinkedIn, we don’t always know how to best leverage them to drive sales. Here are five tips you can use to create a Linked In profile that will motivate prospects to come to you–without your having to “sell” them.

1. Position yourself as a thought leader

People buy from those they know and trust.  Especially when it comes to important purchases, people also want to buy from experts that are ahead of the curve.  LinkedIn offers multiple tools, many of which are discussed below, that you can use to demonstrate thought leadership and reinforce their confidence in you as a trusted advisor.

2. Get and give recommendations

What impression do you suppose a prospect will have after reading glowing endorsements about you from former coworkers, bosses, and, especially, clients?  While they may suspect those clients likely did not volunteer to write those recommendations, they also know that clients would not agree to do so if they did not feel comfortable legitimately endorsing you.

Get started by writing one for someone else.  Doing so accomplishes three things: one, it clearly flatters the person you write it for; two, it helps him or her look better to people viewing his or her profile; and three, it creates a desire to reciprocate.

2. Use polls to engage interest

People like giving their opinion about issues that are relevant or important to them–and reading what others have to say about topics that matter to them. Every so often (once a quarter or so) use LinkedIn’s polling feature to take a poll.

Moreover, your name will appear on their status updates, reminding your connections you’re out there, and in so doing, keeping you top of mind.  When combined with your other LinkedIn activities, it will increase the likelihood, they’ll remember you when they’re ready to buy.

3. Find and share news that will help others

Each group has a news section that contains news articles other members post, and increasingly, blog entries.  You never know what interesting tidbit you might come across that the difficult-to-reach prospect would appreciate receiving (and reward you for sending with a return call).

4. Demonstrate your value

Adding your experienced-based comments to existing discussions in the groups to which your clients and prospects belong is an unobtrusive, but powerful, way to demonstrate your thought leadership and your willingness and ability to provide value.

For example, I contributed to a discussion in one of the Mergers and Acquisitions groups. The very next day, I received an email from a boutique M&A firm on Long Island saying they “would like to learn more about my firm and services as they may be beneficial to his prospects and client base.”

5. Post documents, presentations, share what you’re reading

While you may not sell people on LinkedIn, your marketing materials may.  Use LinkedIn Applications such as SlideShare Presentations, Google Presentations, Box.net Files, and Reading List to passively communicate about your company and yourself.

I’ve used this to post my standard sales presentation, which promotes what I offer, and a couple of books I’ve read and recommend.  This helps others get to know me better as a person, effectively building my personal brand.  Others use it to establish thought leadership by posting white papers their firms have authored.

Bonus: Search for status updates for trigger events

In addition to these ideas, there are a few I’d like to share courtesy of a fellow business owner.  David Leaver of Opus Partners recommends that his clients identify some trigger events—events that, when they occur, will create a need for a product one sells—among the weekly updates mentioned above.  For Leaver, who provides sales training services, one trigger is when a VP of Sales changes jobs; often he or she will want to bring in a sales or marketing consultant to evaluate the staff being inherited.

Premium LinkedIn Extra: Target your most promising prospects

Premium LinkedIn users have a host of additional benefits that are beyond the scope of this article.  One that I’ve found extremely valuable is the ability to search for contacts using premium-only demographic criteria, such as company size, function, and seniority level.  This provides me with a reduced, and more targeted, list of prospects.  I can then zero in on the exact person or persons I want to reach, in the size of organization I want.  This enables me to send a custom, targeted message to those prospects via InMail, or, if I don’t have a premium account, via a connection.

Share your LinkedIn sales and marketing tips

As we have seen, there are a plethora of easy-to-use tools available to you on LinkedIn that can help you improve your sales results.  Start by picking one or two, and use them for about a week, until they become second nature.  (Nigel Edelshain of Sales 2.0 disciplines himself to devote 15 to 30 minutes each and every day.)  Then, gradually start using the rest of the features presented here, until you find yourself becoming a bona fide LinkedIn maestro.

Do you have other LinkedIn tips for generating sales?  If so, please share them here.

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Will marketing consultants and agencies switch places with in-house staff in a digital world?

May 25th, 2010

As a marketing consultant, I attend a lot of marketing seminars and marketing conferences to stay current with my craft.  Today, the buzz there is all about online marketing.

digital marketingTypical topics include content strategy, search engine optimization (SEO), social media, inbound marketing, marketing automation, and of course email marketing.  Spending in all of these areas is up–often at the expense of conventional advertising and PR.

There are several trends driving this transition.  One is that prospects are moving online so the marketers that wish to reach them must also move online.  Another is that advances in marketing technology have made it relatively easy for non-professionals to produce content that attracts and engages their audiences.

A third is that many online marketing programs are direct marketing initiatives and therefore highly measurable–even more so now that respondents leave digital footprints in their wake.  A fourth is that in a down economy, companies are more concerned about short term revenue.  This causes them to focus more on demand generation and less on longer term strategies such as branding.

If content is king, will marketing organizations change to serve the new master?

In attending these conferences, one of the things that has struck me is that most of the marketing strategies under discussion require generating a lot of content–a task which many companies have historically outsourced to advertising and PR agencies or independent copywriters.  So, this has made me wonder whether organizations, particularly small organizations, are restructuring to make the most of their marketing resources.

That is, now that most of the marketing resources are going to content production and analytics–are companies retaining these functions in house?  And, if so, are these businesses outsourcing marketing strategy work–since it tends to be front-loaded and then intermittent–and requires far fewer resources on an ongoing basis in today’s digital world?

What are you seeing at your company and those companies that you serve?

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SaaS: Building the revenue momentum you need to achieve profitability

May 11th, 2010

Lots going on in Boston this month.  Just got back from an information-rich panel discussion offered by the Massachusetts Technology Council entitled: Tricks of the Trade – Building Revenue Momentum in SaaS.    Here are my notes.

SaaS revenue momentumProgram description

Unlike traditional software business models which are based on one-time license sales and lump-sum cash payments, the SaaS model is predicated upon building annuity-type revenue and cash streams. Over the long-term this business model is highly attractive, but especially for early-stage companies ramping SaaS revenues poses a unique set of challenges. MassTLC has gathered a panel of accomplished SaaS operating executives to share their insights on getting the initial revenue ‘flywheel’ turning and building sustainable SaaS enterprises.

The panel

Skip Bestoff, General Partner, at Castile Ventures did a great job of moderating the discussion–asking all the questions we hoped he’d ask.  Fred Mather, Global Head, M&A and AI Sales at IntraLinks and Richard Turcott, CMO at RatePoint drew on a wealth of experience to share best practices, lessons learned, and advice about how to get the revenue flywheel going.

Determining market positioning and value propositions

Skip asked, “How do you find the sweet spot for your business?”

Advice:

  • Understand your market and follow through–too often people find their target market and then later ignore what they’ve learned.
  • Meet with prospects to gather market insights.  Nothing beats seeing someone’s reactions as they talk about what’s important to them.
  • Ensure that the opportunity you’re pursuing addresses a significant problem
  • Tie your value proposition to cost and/or time savings.
  • To ramp quickly, aim for those who already recognize they need a solution to the problem you’re addressing

Tips:

  • Accelerate your learning by using pay-per-click ads to test various terms you’re considering using to market your solution
  • Then, apply what you learn to other channels

Skip asked:  What’s the impact of the subscription model on the value proposition?

  • SaaS enables you to target the economic buyer, since you don’t need to put anything in “on premise”
  • The sale is more transactional.   When the entry point is just $/month, perceived time savings and ease of use often trump classical  ROI
  • Customer centricity is more important than ever.  You need to deliver a great customer experience if you lead with a trial.

IT’s involvement in the sale

Comments:

  • The IT budget is shrinking, so you need to attack the operating budget if you want to make a lot of money
  • IT is still involved for enterprise sales, that require custom development such as integration with other applications the customer is using
  • You need to tell IT what’s in it for them
  • Although it’s all over the place, most IT departments today are economic buyers
  • If IT approval is needed, there is one more step in the sales cycle, and the company tends to grow less quickly.

How much should you pay to acquire a customer?

Advice:

  • Start by determining the lifetime value of a customer (LTV).  The calculation is (1/attrition rate)*Average sales price
  • In the beginning, you may need to pay more than the LTV because you haven’t proven your value or developed a brand.
  • In the long term, you need to pay less than LTV to achieve profitability

Best practices for acquiring customers

  • Depend on prospect and customer anecdotes to get your messaging right.
  • For small price point products, you’re conducting focus groups every day (as you watch online buying behavior)
  • Leverage the community: start with those who wield the greatest influence with the target market
  • Then, focus on getting customers that are willing to serve as spokespeople for your case study
  • Work your network:  with the advent of social media, no one needs to make cold calls
  • Set limits and success criteria to ensure that your trials encourage conversions:  give prospects just enough time and functionality to experience value
  • Hone your process by analyzing the sales pipeline:  key metrics include visitors to trials, trials to conversions, time to progress through cycle, level of discounting

Customer support strategy is essential to success

  • Having a well thought out support strategy is essential to success
  • Business users are less technically savvy and require more handholding
  • To scale, you need to make people comfortable with on-line support
  • To maximize profitability, you need to bake support into the product over the longer term.
  • Initially, however, it’s likely you’ll need to  provide personal support to compensate for gaps in the product and/or training materials

These are some of the insights I gained from the panel this morning.  What have you done to get the revenue flywheel turning for your SaaS business?

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B2B marketing insights and tips compliments of MarketingProfs

May 6th, 2010

So much to learn, so little time–which is why I was thrilled to have the opportunity to meet and learn from hundreds of other marketing professionals this week at Marketing Profs B2B forum.  What’s more we had a lot of fun and left with a lot of ideas that many of us are already putting into action.

B2B digital marketing best practices

Over two jam-packed days, we heard about best practices in areas like search engine optimization (SEO), content strategy, lead generation and lead nurturing, and social media.  We learned about what’s worked, what hasn’t, and why from Marketing VPs that have been there, tried that.

Now, a day later, I’m summing up my notes and thought I’d share some of what I learned with those of you who couldn’t get away.  These insights just a sampling of all I took away from this great conference.

Three insights + three tips

For each session I attended you’ll find three things I found interesting and three tips I found useful.  The biggest “aha” was that sometimes the things that were the most interesting were also the things that should have been obvious…

“Higher Conversions, Better ROI: Advanced Landing Pages that Improve Campaign ROI” with Anna Talerico, Scott Brandt, and Michael Burgis.

Interesting:

  • The ability to customize landing pages to specific targets can dramatically boost conversions.
  • Having an automated tool makes customization much easier (and appears to be a “must” if you want to use your website for lead gen)
  • Match expectations:  ensure that landing page uses images and phrases consistent with the invitation to click through

Tips:

  • Want visitors to click through?  Offer reports on market trends or price quotes
  • Want to ensure prompt follow up?  Pull leads that Sales hasn’t called (within a pre-specified time
  • Add social icons to your “thank you” page to encourage further interaction

“Content SEO- Best Practices and What to Avoid” with Lee Odden and Jiyan Wei

Note: Due to a previous commitment, I only caught the last half hour of this session.

Interesting:

  • Google’s webmaster tools/blog is a treasure trove of useful information
  • There’s no tool yet that enables you to look up social keyword usage/trends
  • Google is starting to penalize sites with long load times

Tips:

  • Want to increase the chances that Google will index all your pages?  Submit your HTML and XML site maps to Google directly.
  • Do you syndicate your content?  Let Google know which page is original to avoid penalties
  • Need a proxy for a social keyword tool? Look at tag clouds on relevant blogs and social bookmarking sites.

“Drowning in Data, Starved for Knowledge?” with Devyani Sadh, PhD

Note: The recommendations offered in this session appear to require consultants, several tightly integrated software packages and teams of data analysts to implement and therefore may be beyond the reach of most small companies.

Interesting:

  • Marketing 101 rules still apply, but analytics are key to concentrating your firepower where it will have the greatest impact.
  • Larger companies that fail to invest in these resources may find themselves at a competitive disadvantage
  • Where are the dashboards that will make the data presented in this session useful to the less technical users of the data?

Tips:

  • Strategy before tactics:  Identify your target market and focus on them because there aren’t enough resources to do everything.  Then don’t forget retention which is far more profitable than acquisition.
  • Critical success factors:  objectives and a plan, database strategy, metrics strategy, data mining strategy, integration strategy (of various online systems and of online and other data)
  • Data sources in order of priority: customer contact data, preferred means and frequency of contact, purchase history, web transaction history, third-party demographic data (e.g. D&B), Campaign responses, survey data

“Blogging for Business Roundtable” with Galen DeYoung

Since this was a Q and A session, I’ve just included tips:

Tips:

  • Use WordPress as your blogging platform because it has the most plugins
  • Recommended WordPress plug ins:  All in One SEO Pack, Sexy bookmarks, Robots Meta
  • Use Google URL Builder to help you track analytics that are otherwise lost when you use URL shortening tools

“Unleash the Power of Content to Engage Your Prospects” with Stephanie Tilton, Michele Linn, Amy Black, Pam O’Neal

Interesting:

  • People forget to be interested in you, you need to remind them (sad, but true)
  • Your content strategy needs to outline goals at every stage of the buying process and content that will help you achieve those goals.
  • Content attracts more qualified leads, because searchers are often in “shopping” mode

Tips:

  • Add “best practices” to your case studies
  • Teach your sales people how to write LinkedIn profiles that sell and use SlideShare to embed your sales presentations in their profiles
  • Update the offers on your blog post

“How B2B Marketers are Using Mobile Marketing to Increase Revenue” with  Chris Koch, Bob Gold, Jeannine Rossignol, and Dawn Cochran

Interesting:

  • Shoots off plants have a better chance of surviving than their seeds do.  The success of mobile apps depends on branding done in other spheres.  Self-contained apps are not likely to succeed.
  • Your app needs to work on all phones since even the company with the largest share only has a small percentage of the market.
  • Tools now exist to port applications built on one platform to another, although additional development work is still needed.

Tips:

  • Opt-in is mandatory.  People are very protective of what they allow on their phones.
  • Provide Sales with mobile versions of all sales aids for easy access.  Make everything printable to a queue so that they can easily obtain hard copies when needed.
  • Want to build a community?  Use mobile because it’s available 24 x 7.

“Six Pixels of Separation – How B2B Connects In a Connected World” with Mitch Joel

Interesting:

  • Google bought YouTube for its community
  • 20% of searches have never been done before (opportunity for you to “claim” those terms!)
  • The average Canadian spends 16 hours/month on YouTube and the average segment is just 4 minutes (American stats are comparable or higher)

Tips:

  • Become active n communities where your target audience lives
  • Publish or Perish
  • Invest heavily in Search

“Websites that Convert More Customers” with David Reske and Jay Kramer

Interesting:

  • Many of the pages the speakers presented were dense with text, consistent with their recommendation to ensure you have a lot of content
  • Usability /Navigability is key
  • Sepaton, a provider of high-speed data backup solutions,  reminds visitors of its value proposition with flash images of trains, runners, and speedboats.

Tips:

  • Ensure that it’s obvious what problem you solve on every page you publish
  • Consider integrating what others are saying about you in social media on your site so visitors can validate your claims
  • Include a call for action on every page

Now, here’s the irony.  You take two days out of your busy schedule to attend a conference–and then come back with many more things to add to the “to do” list.

Of course, the hope is that they’ll pay for themselves over time–which I believe they will.  Thanks  to all the folks at Marketing Profs for a great conference!  Looking forward to next year.

Added 5/10/10

One reader asked for more clarification/examples.  Please see below.  If you require additional clarification, please let me know.

1. An automated tool for landing pages is helpful because many companies end up adding or customizing multiple landing pages each day.

2. The speaker that mentioned that  “shoots off trees do better than seeds” referenced Dragon as an example of an application that’s already branded and would benefit from a mobile extension.

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Social media for B2B Marketers via Paul Gillin

May 3rd, 2010

A lot of what we read and hear about social media focuses on how businesses can use it to market to consumers (B2C).  Yet, as a business-to-business marketing consultant, I’m far more interested in its B2B applications.

This is perhaps the main reason I was looking forward to Paul Gillin’s breakfast seminar at the Massachusetts Technology Leadership Council last week. The other reason is that Paul has an uncanny ability to connect the dots in ways that add new meaning to any topic that he addresses.

B2B Marketing differs from B2C marketing

Paul distinguished between B2B marketing and B2C marketing by noting that because B2B purchases are often bigger, more complex, and ultimately “bet the company” decisions.  Therefore, the focus is on value, and then service and support.

Most buyers have a rigorous process for ascertaining value because they know that they will have to live with their decisions for a long time.   This process includes seeking expert advice.

Winning depends on influencing the experts

As validated by a 2008 Marketing Research study that Paul cites, the experts they rely on include employees who have experience with the product or vendor, analysts, and peers in that order.  Although the decision makers don’t ignore vendors’ marketing materials, personal recommendations carry much greater authority.

Winning therefore depends on building relationships with the experts–and those that influence them.  Today, much of that influence is happening through social media, so that’s where vendors need to be.

Strategies for determining who is influential and what interests them

Paul outlined a number of strategies for figuring out who wields the most social influence and what will engage them.  He recommended turning to peer validation sites such as Technorati to identify candidates and then looking to sources such as presence in the mainstream media, traffic rank, number of inbound links, Hubspot’s website and Twitter graders, and the number and quality of Twitter followers and LinkedIn connections to assess each individual’s level of influence. To learn what interests them most, Paul suggested checking their blog rolls and tag clouds.

It’s about engagement, not merely circulation

As Paul points out, it’s all about engagement, not merely circulation.  Once you’ve identified whom you need to reach you’ll want to treat them like reporters and reach out to them with news that they’ll find interesting.

Nevertheless, it’s important to remember that they’re not the reporters of old–and therefore will have different questions and concerns.  Paul provided a number of examples of engineers that blogged on their technical specialties, CEOs that blog about the issues that face their organization, and others who are passionate about the niches they cover.

Case studies, tips, and more!

Then there were case studies to illustrate each point.  Paul showed examples of how companies used social media to attract attention, save money, get rid of excess inventory, and generate revenues.  He also discussed which social media tactics work best at each stage of the sales cycle.  It will come as no surprise to readers of his earlier book The New Influencers that blogging remains a favorite.

Next were tips for would-be publishers.  Chief among them was the importance of having clear business goals and a strategy for achieving them–at every stage of the sales cycle.  Paul noted that he feels that small business can really excel at social media because they know their niche, are nimble, and are less likely to get caught up in politics.

Another important piece of advice was to “fish where the fish are”.  With Twitter and posts on group discussions linking to blogs–and Facebook’s new “Like” button–the walls around each platform are continuing to come down.

Find out where your audiences congregate and go there to communicate.  Answer questions on LinkedIn.  Post presentations on SlideShare.  Then, you can link back to your site so the engaged can learn more about you and your company.

Finally, recycle and extend.  The same content can serve as a foundation for a blog, a podcast, and even a video.  You can reference it in a LinkedIn group on Twitter or in a comment on someone else’s post.

Read the book

Lots of good advice–but this blog post is just a teaser.  To get the full scoop, you’ll need to wait for the book–due out next January.  For a sneak preview, see Paul’s slideshow entitled B-to-B Social Media–Really.

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