Archive for the ‘Marketing strategy’ Category

Target Marketing: Still essential, still evolving

Friday, 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

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

Tuesday, 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

Tuesday, 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

Thursday, 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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Are discounts a good way to increase sales?

Tuesday, April 20th, 2010

Especially in a tough economy, companies often discount their products and services to increase sales.  The advantage of this approach is that it attracts attention–and has the potential to get prospects that ordinarily would not buy to try out your goods and services.  The hope, of course, is that once they experience what you have to offer that they’ll buy again.

The question is does it work?  And for whom?

Discounts do increase sales volumes

There’s no question that discounts increase sales volume.  To find evidence, you need look no further than to a Reuters article that ran earlier this month about automobile industry sales.

The lead sentence reported:  US auto sales jumped to a seven-month high in March led by a 41 percent surge at Toyota Motor Corp after the Japanese automaker offered the steepest discounts in its history to win back sales lost during its recent safety crisis.  Here, it’s worth noting that discounts were so successful in increasing sales volume that they did so despite the fact that the company had experienced a number of setbacks that tarnished its reputation, and presumably its brand.

But, discounts can reduce profitability

Nevertheless, just because discounts can increase sales, doesn’t mean that discounting is a good strategy.  Discounting is only a good strategy if it doesn’t impair long term profitability–which it often does.

In the automobile example above, Toyota took a loss on any cars that they sold to customers that would have bought from Toyota anyway.  Unless they could attract enough customers–that would otherwise have bought from the competition– to offset those losses, any increases in volume would come at the price of reduced profitability–on the cars themselves.

Discounts don’t–and shouldn’t–happen in a vacuum

Of course, there’s also the issue of cash flow.  Automobile dealers have a lot of cash tied up in inventory.  Especially since this inventory loses value as the next model year approaches, it may make sense to discount even if only to keep customers from delaying their purchases.

The issue, however, is even more complicated.  In the automobile industry, service revenues depend on automobile revenues.   Therefore, companies may discount automobiles if they believe profits from service sales will offset any losses on the cars themselves.

Finally, before discounting companies need to take into account the competition.  Any time one organization starts to discount, it runs the risk of starting a price war as the competition rushes to meet or beat its offers.

This post has focused on the auto industry.  Yet, every industry faces similar considerations.

Different industries, different discount considerations

In the airline industry, inventory is perishable.  If an airline flies with empty seats, it will never recoup the associated revenue.

Yet, we don’t see airlines routinely discounting empty seats, even as the departure date nears.  If they did, people whose schedules were flexible would wait to buy, eventually driving down the price of all seats.   Therefore, when airlines do discount they do so upfront–and only make those offers available to those who have flexible schedules and/or will fly at non-peak times.  In so doing, they ensure that those who will pay a premium for seats continue to do so–and thus preserve profitability.

Subscriptions are at the other extreme.  They’re not perishable because the customer gets the latest greatest features when they’re available–as long as they renew.

Yet, both magazine and software publishers often discount to attract new subscribers–often in the form of a free trial.  While they hope that customers will upgrade to a paid package to either retain the service, or get more functionality, this often is not the case.

For one thing, free and/or discounted offers often attract people who would never otherwise consider the product–and therefore abandon it when the price increases.  When this happens, the company wastes sales expense on unqualified prospects.

For another, even qualified customers who buy at a discount often come to associate the discounted price with the value of the product.  Therefore, they become disgruntled when the price increases without the addition of new features that they find valuable.


Thoughtful discounts  works

As I mentioned in my article, Marketing is so much more than promotion: just ask my hairdresser, thoughtful discounting works.   I went to my current hairdresser when my former hairdresser missed our appointment because she was running late–fully intending to make this a one-time visit.

After styling my hair, the new hairdresser gave me a coupon that offered almost 50% off my second visit.  As a strategic marketing consultant,  I was impressed with the move.

Had the salon offered newcomers discounted services, it may have attracted individuals unwilling to pay the salon’s normal prices.  On the other hand, offering a discount after the first visit, encourages clients who have already demonstrated their willingness to pay full price to come again.

When I commented that the salon had done exactly what I encourage my clients to do,  the stylist confirmed that the decision was strategic. She said most first-time clients come because their current stylist is unavailable. The owners, knowing it takes time to create a relationship, use the coupon to provide an incentive for satisfied clients to return for another visit.

It worked.  I returned–rationalizing that my hairdresser could have called to let me know she was running late.  A year later, I continue to go to the new hairdresser, even though I pay full price.

Review the pros and cons before discounting

Before you discount, review the pros and cons.  Ask first:

  • What do we hope to achieve by discounting?
  • How much business will we now win that would otherwise lose to a competitor?
  • How much profit will we forego  by selling discounted products or services given that customers who would have paid full freight can now pay less?
  • What’s the benefit to us if someone buys sooner rather than later?
  • How will the competition respond to the discount–and how will that affect us?
  • How will discounting affect perceptions about the value of our product or service?

Then, you’ll know if discounting is a good way to increase sales.

Barbara Bix is the Managing Principal of BB Marketing Plus and and specializes in helping companies with complex products and services increase sales.

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What role does market intelligence play in your company?

Tuesday, February 23rd, 2010

Over the past six months, I’ve noticed heightened interest in market intelligence.  To learn more, I interviewed marketing executives at several local companies to find out why–and summarized the results in The Secret to Success in a Down Economy: Market Intelligence published in today’s issue of MarketingProfs.

In this article, I discussed how one mid-sized company was using market intelligence to maintain its competitive edge and then asked readers if they had made similar marketing investment decisions.   The article concluded with some questions to which I’d welcome your comments.   They are:

How about your company? Where do you turn for market information and why? How do you use it?

How are you reacting to the tight economy? Have you cut back your marketing resources or increased them?

Are you spending more money on pinpointing your most promising prospects and understanding what induces them to buy? Or are placing your bets on extending your reach–and/or reiterating your current messages?

If you choose to comment, please include the size of your company and the industries and geographies you target to help others interpret your responses.

Thanks in advance for any perspectives you can provide.

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What can businesses learn from the recent Massachusetts US Senatorial Race?

Monday, January 25th, 2010

Thanks to Dave Cobosco for the following post.

Winners never lose sight of whom they serve.

For those of you not familiar with what happened in Massachusetts on January 19, there was a special election to fill the US Senatorial seat vacated by the death of Ted Kennedy.  Kennedy had been in office for the past 46 years.

Since Kennedy was a Democrat, initially most people felt another Democrat would fill the seat.  The Democratic Party must have felt the same way.  They ran a campaign full of endorsements from high-powered Democrats, while the Republican candidate drove his pick-up truck from one end of the state to the other meeting with the people who he would represent if elected.

The Republican won.  This not only surprised Democrats in Massachusetts, but sent shockwaves to Democrats in Washington DC.

The Corporate Challenge

Any CEO knows his/her company must stay in touch with its customers and the market.  In these economic times, however, many companies are not seeing top line growth; so CEOs focus on what they can control which are costs.

From my experience this means:

  • Freezing and/or reducing headcount results in more work for employees.
  • Reducing operating expenses, especially travel, ends up decreasing face-to-face customer interaction.
  • Assigning key contributors to task forces chartered with improving operational efficiency–thus reducing time available to perform their functional jobs.

While all of these initiatives are important to running a profitable company, in my experience they can lead companies, especially the product organizations, to focus too much attention internally and therefore lose touch with the customers and market.

So what can companies do?

Plenty.  Product organizations should:

  • Notice when, and understand why, people are posting unfavorable comments about its products/company on online forums.  Besides time, this requires some phone calls.
  • Understand why the company both won and lost recent deals.  Again, besides time, this requires some phone calls.
  • Engage customers as design partners in new product development.  The cost is minimal if a local customer is willing.  The cost will ultimately depend on the type of product and the location of the customer relative to the development organization.

I’m sure none of the above are new to you, but how many of you can honestly say your companies are doing them?  If you are, congratulations.  If not, the risk is another company could be focused on understanding your customers better than you are. And, as the U.S. Senatorial race in Massachusetts showed, the people served determine the winner.

If you run a company you should expect your product organization to be doing what’s listed above, but from my experience, however, very few product organizations have operationalized these critical activities in their organizations.  If your company lacks this product marketing discipline, I can provide it.

Dave Cobosco (dcobosco@yahoo.com) specializes in applying product marketing best practices to enable companies to expand the market penetration of its products.   Dave has applied these best practices as an individual contributor and in leadership roles where he built highly respected and effective product marketing teams focused on driving the business and is looking for his next opportunity to do so again.

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Social media: Insights from an in-house specialist

Monday, January 18th, 2010

Most B2B companies are just beginning to dip their toe in the social media marketing waters.  Consequently, I was delighted when Alan Belniak, the newly appointed Director of Social Media Marketing at Parametric Technology Corporation (PTC) agreed to an interview about how his company is approaching social media and why.

My questions appear in bold followed by his answers.  Here’s what he had to say:

Why did PTC create your position?

Twelve to eighteen months ago, the company’s senior marketing executives realized that conversations happen online whether or not PTC participates–and determined the company needed to take a more active role.  They considered various approaches but ultimately decided they needed a full-time resource.  For one thing, PTC is a large organization with almost $1 billion in revenues. For another, it was clear that social media was here to stay.

What does PTC hope you’ll achieve?

Better engagement with customers.  People that participate online tend to be more engaged than those that don’t.

Engagement is the name of the game.  Engagement equals a valuable brand.  Valuable brands attract more customers.

My job is helping PTC marketers determine where to spend time and how to spend it.  The key is figuring out how to create and promote good content.  If you pump out seven blogs in a week, you run the risk of overwhelming your audience.

How does your company view social media complementing other initiatives?

There are several ways.  For one, social media will augment other marketing activities.

Because of the nature of social media, perhaps it will reduce spend.  I use the word “perhaps” intentionally as it will only reduce costs if we can get more data for less money.

Social media can also help you get better qualified leads.  At a recent Massachusetts Technology Leadership Council meeting, Amy Black from Kadient said something along the lines of “A discussion through social media beats a cold call every day.”  If you do something that causes someone to take action–and let you know they’re interested–that’s better than pursuing them.

Today, the focus is on marketing.  In the future, my personal hope is that the entire corporation will incorporate social media into their operations.

What are your primary responsibilities as Director of Social Media Marketing?

My primary responsibility is to help the company leverage social media in its marketing efforts.  I consult with marketers about how they can integrate social media into campaigns they are planning, and how they can put more power behind existing programs.

I also monitor social communications, “separating the signal from the noise”, to identify opportunities for PTC to take a more active role.  For example, I look for mentions of PTC, our products, and keywords, such as “PLM software” (product lifecycle management) that relate to our business.

Because we’re a global company, I also determine what tools to use in other countries by reviewing third-party research, interviewing local marketing experts, and traveling to other countries to learn more about what people are using there. Different cultures consume information in different ways.  For example, some countries, such as Germany, place a different value on face-to-face conversations than others.  If online activity doesn’t influence the conversation, then it doesn’t make sense to invest heavily in social media in those places.

What listening tools are you using?

I’m glad you asked that, because listening is so important.  We use a number of free tools such as Twitter’s advanced search, BackTweets (which effectively reverses “the shorten URL process” to find terms that were in the original URL but are no longer visible), Social Mention, and OMGILI (an aggregator that displays results visually).  We also use BoardTracker to search discussion boards.

In addition, it’s important to search on sites that are specific to your industry–and look through the sites themselves.  For example, I bookmark PLM–and CAD-related websites and then enter my keywords in their search bars.

We listen to traffic on three large networks:  Facebook, Linked In and Twitter; because that’s where audiences have conversations about business–or blur the line between business and personal.  When it comes to Twitter, my main interest is the links that people share.

You need to use a suite of tools.  You can’t rely on a single tool, because none of them do everything. You also need to accept that, initially, you will get overwhelmed–but you need to get over it.  You can refine your process over time–and use aggregators like Social Mention.

You want to get a rough sense of where things are happening.  If you record all the mentions of your search terms, you’ll go batty.

You just want to understand where the conversation is happening, what people are saying about you:  the questions they have, the tips they offer others, how they feel about you) and the media they use (audio, visual, file exchanges), etc.  If we can answer those questions, then we know where to focus our time, what content we are seeking, and how to deliver it.

I also should add that not all the information we get is free.  Our PR agency uses a third-party tool to produce a thick report of all the times that our company gets mentioned and nice-looking graphs.

We pay for this service to leverage our time.  They search many sites (both relevant and less relevant); and we use this data to understand trends, such as where certain types of conversations are happening, and the general content of those conversations (such as the media they use, as mentioned previously).

Where are you focusing your initial efforts and why?

We are listening to hear where the conversations happen so we know where and how to engage: what channels to use, what content to create, who to follow, what media to use.  I’m also teaching the corporation how to engage with social media.

How will PTC know if you’re successful?

The first indication will be 1.0 metrics such as page views over time and unique visitors. Moving forward, though, you need to change what you measure, and measure what you change.

To bridge the gap to 2.0 metrics, we’ll look at better forms of engagement (such as the ratio of comments to posts to measure how deep the conversation is and average unique comment per post that tells you how many people you’ve engaged).

Then, there are intermediary measures.  For example, Facebook now allows users who won’t comment to just click to indicate that they “like” a particular post.

Initially, you’ll want to look at the aggregate, rather than the specific.  There are no widely agreed-upon metrics that I’ve found — but since everything is online, it’s still easier to measure the ROI of social media than the ROI of a billboard.

What’s been the biggest surprise in your new role?

Although there is a general awareness of social media, inside our company, it is very new to most people and initially, they weren’t clear as to how to apply it in their day-to-day marketing efforts. As I’ve dug into this role, I’ve learned that this is not uncommon amongst B2B companies.  Social media is so new that there is a lot of education needed inside a company to aid adoption.

Why do you think that is?

The adoption of online social networking was very rapid, likely attributable to Facebook (and others).  Since Facebook is primarily seen as a casual or truly social site (as in, non-professional), I think people associated it with kids and socializing.  They likely extended this thinking into other forms of online social networking.  However, Facebook is just one form of online social networking.

Other forms of social networking (online and offline) exist, too – for example, moving into a new neighborhood and asking for a good plumber – that’s an example of and ‘old fashioned’ offline social network.  But the social mores and rules are the same.

In addition, some people may have tried something small in one or two social arenas (for example, purchasing ads or trying a reach-out campaign), and may not have gotten the results they were seeking.  In doing so, they may ascribe their less-than-desirable results in one social arena to all social arenas.  For example, I thought that a recent article in the New York Times about how people often base their impressions on a single data point was a great take on this phenomenon.

What’s your largest unanswered question about social media at PTC?

How long until it “pays off”?  By that I mean, “When will I be able to make a stronger correlation between our marketing efforts to stimulate engagement, and its ultimate effect on sales, revenue, and profit?”.

Altimeter produced a report that shows that the more engaged a brand is with customers, the greater their annual revenues are.  Companies that do participate online are more engaged with their customers.

Customer engagement equals a valuable brand.  A valuable brand leads to increased sales.  It also goes without saying that this leads to happier customers.

We’ve covered a lot of ground about your perspectives on social media.  What else should we cover?

I’m glad that you asked about listening platforms earlier.  That’s where it starts.

One of the greatest challenges is getting people to listen before acting.  I wrote a fairly comprehensive strategy from scratch.  You need to figure out what you want to accomplish first. Else, the first time you fail, someone will ask, “Why did you do that?  It doesn’t make sense.”

My own research shows that people who want a social media strategy often want to jump into interaction.  If you don’t know what’s important to your customers, prospects, or users, or where the conversations are happening, how can you have an impact?

I liken this to a cocktail party…You don’t show up at someone’s house and say, “buy my stuff”.  You show up, survey the landscape, and maybe find someone you know.  You listen in on a few conversations before you add a comment or two.  As the evening progresses, in addition to adding comments into conversations, you strike up your own conversation.  Before the night is over, people are joining your conversations and looking to you for what you have to say.

Online social networking and the use of social media is similar.  Starting by listening and offering comments is a better bet than jumping into a sales pitch or a “go look at our stuff” mentality with respect to a web presence.

Is there anything else you’d like to add?

I love my job.  I appreciate that PTC gave me this opportunity and admire the company for being so forward thinking.

Also, I’d be remiss to talk about social media and not provide people additional ways to find me online.  My Twitter ID is abelniak (@abelniak ; http://www.twitter.com/abelniak), and my blog address is http://www.SubjectivelySpeaking.net

Hear more from Alan this Thursday morning when he’ll be speaking on Social Media: What’s In It For You? in Cambridge, MA at a NEDMA event.

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What are your marketing priorities for 2010?

Wednesday, December 30th, 2009

A quick search on Google indicates that surveys about business-to-business (B2B) marketing priorities tend to concentrate on tactics–rather than strategy. They also tend to focus on investments in various types of promotional activities, rather than the greater marketing picture. As for strategy, at least one survey seems to indicate that in a tight economy, B2B companies rank demand generation first and then raising awareness.

What happened to the focus on the customer?

The irony is that gaining deeper insights into customer, or prospect needs, rarely shows up as a priority, let alone a high priority. Why not?

Is it because investments in gaining customer knowledge are not of interest to those doing the surveys? Or, do researchers assume that everyone knows all they need to know about customers?

Or, is the assumption that some form of marketing research, win/loss analysis, or customer data mining is an integral part of any marketing campaign–and therefore does not need singling out? Or, do researchers know from past experience, that while everyone realizes gaining customer insights is important, it’s not a primary focus or one in which companies invest heavily?

I don’t know the answer. I do know that while many companies do invest in learning more about their customers, others feel that they know enough–and/or cannot afford to learn more. The question is can any of us afford not to delve deeper into what matters most to those we depend on for revenues?

Isn’t customer knowledge power?

The devil is often in the details–and nuances in capabilities and/or messaging can make a tremendous difference. That’s why it’s not uncommon for consumer goods marketers, the messaging masters, to invest 10% of the anticipated cost of any marketing campaign in upfront marketing research.

Moreover, we all know of “first movers” that lost the race because they didn’t move down the learning curve. Instead, competitors pulled ahead by making slight, but significant modifications to the core offering or message.

Is everyone focused solely on lead gen?

From reading the marketing trade press, one gets the impression that a lot of companies do believe that deep customer insights drive sales.  These companies are investing in:

  • Data mining tools that will help them pinpoint their most promising prospects and understand exactly what helped win their business
  • Social communities that help assess the desirability of products and marketing messages before committing to their delivery
  • Usability testing to find and remove product design elements that get in customers’ way
  • Social media listening tools that enable marketers to determine where audiences turn for information–and what communications resonate most with them–before jumping in the fray
  • Marketing campaign software that includes the ability to monitor conversions and determine what worked–and what didn’t
  • Sales enablement solutions that make it easy to create and test responses to alternative lists, messages, and offers

Gaining deep customer insights doesn’t need to be expensive

Investments in increasing customer intimacy are not limited to large companies.  While many smaller companies may not have the financial or human resources to invest in the automated listening tools listed above, they have other options at their disposal.

Many of our clients gain deep insights by easy-to-administer programs such as:

  • Using free social media listening tools to monitor market trends, conversations about the need for the solutions their companies offer, and any mention of their name and/or their competition’s
  • Interviewing customers and prospects to learn about the steps these individuals took before making a recent purchase decision–and what triggered these actions
  • Developing case studies about the benefits that satisfied customers derived from their solutions
  • Following customers, and those who influence decisions about their products and services, on Twitter

The question, however, isn’t what others are doing, but what you’re doing. Will this be the year of the customer for your business?

Ready to start today? Test your customer IQ now!

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