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Are You “Customer Centric”?
More great stuff from the folks at the Wharton Customer Analytics Initiative (WCAI).
Yesterday, Wharton Professor Peter Fader released a new book entitled Customer Centricity. I had the privilege of reviewing a pre-release copy of the book and was struck by some really interesting and insightful points that Peter highlights in it.
Specifically,
Did you realize that some of the greatest brands in business history- Starbucks, Nordstrom and yes, even Apple have a long way to go in terms of optimizing the value of their customers?
Shocking right? But Peter makes a compelling case that some of the most successful (and valuable) companies still have room to grow in terms of deepening their understanding of their existing customers and using this information to create custom offerings that strengthen ties and add to the value of the customer relationships that these companies already have.
Did you know that oversimplification of how you classify customers has significant consequences in terms of the effort/investment that you should be making to make your most important customers happy?
There is a great discussion (and a specific example on the wireless industry) in the book about how an oversimplified view of customer churn can cause companies to overlook and under-invest in some of their most important relationships.
Did you know that analysis of customer value could represent an entirely new way of evaluating investment choices?
In the book, Peter introduces the idea of customer equity (the combined lifetime value of all of its customers) as an increasingly accepted metric for considering the value of certain types of firms. While challenging to execute, Peter points out that this may be an approach that is far more tangible and quantifiable than other measures such as brand equity.
These are but a few of the topics that he compellingly covers in this book. Peter is quick to point out that his ideas on customer centricity are more applicable to certain types of companies, but if you are a part of an entity that has large numbers of customers, sells services on a subscription basis (SaaS providers- are you listening?), has the ability to create custom offers, or is interested in investing in companies that have these characteristics, then this book lots to offer. I would highly recommend it.
For more information on the book and how to get it, click here.
Publish or Perish- The New Paradigm for B2B Marketing? (Part 2 of 2)
A few weeks ago, I posted on the importance of getting your business to think like a publisher. Presuming you buy into the need for this mindset, what do you do about it? If you are a B2B marketer, how exactly do you think like a publisher?
Here are some thoughts:
Create targeted content- It goes without saying that you need to create high quality content. However, you could have videos produced by Steven Spielberg that generate little or no interest from your audience. To build relevance, organizations need to build a range of content that appeals to the broad array of stakeholder interests and concerns associated with what you sell.
Here is what I mean by this. Consider a complex technology solution sale and the number of people who can get involved in the process. Is the content you produce and manage adequately oriented around the business owners, IT personnel, line managers, and contract/procurement teams that all have influence in the buying decision? Is it organized in a way that these influencers can easily learn about the issues that are central to their function in the buying process?
In my own practice, I have observed lots of companies who are trying to reach multiple stakeholders with the same message, through the same channels. At best this results in a mishmash of generalized information that proves to be only marginally useful for engaging the influencers in the buying decision. As well see in an upcoming example, segmenting the message creates an opportunity for better focus and more relevance.
Consider not only who they are but where they are in your relationship-So much of what companies do from a content perspective is oriented around prospecting and closing new business. For businesses whose model is subscription based (e.g., SaaS models), information about how users can generate more efficiency and value from the solutions they already buy can be even more important to the long-term health of a business by further cultivating the relationships they already have.
Make full use of the channels at your disposal-Today’s content distribution mechanisms give you a wide range of options for targeting who you talk to and what you say. Use them to segment the content that you feed to the various constituents you are trying to reach. For example, Dario’s company (from Part I) uses a blog for driving awareness and education and the company home page for driving sales. This bifurcation of purpose allows his company to be extremely focused in messaging and UI design.
Give it to them in the media format that they want- There is lots of choice now on how you communicate with your audience, so don’t force white papers on customers as the only way to learn about your offerings. Besides, have you heard about the Forrester report that states that video increases the likelihood of a front page Google search result by 96%?
Give your audience a voice- I heard a very interesting statistic from SplashMedia, that stated that only 14% of prospective customers were inclined to believe the marketing messages that came directly from the selling organization, while 78% of prospects tended to believe the opinions of other customers. To be sure, giving your customers a voice is a big risk, and may not be such a great idea for companies who are not highly responsive to customer needs and complaints. Then again if you can harness the enthusiasm that people have for your offerings, (as implied by the statistic above) customers can be a great way to generate complementary content that helps close new business.
In the end, keeping these ideas in mind will help you think more like a publisher. While your audience is not paying for your content, it is sacrificing its time and attention to read/listen to/watch what you create. Orienting your organization around building specific messages for the right audience at the right stage in the customer relationship is most likely to generate the engagement that you need for driving and sustaining growth.
Publish or Perish- The New Paradigm for B2B Marketing? (Part 1 of 2)
I caught up with a long time friend and CMO, Dario Priolo a few weeks back and got to discussing best practices with him on B2B sales/marketing for software. He markets web-based learning and training solutions, and I think is really on top of innovation and cutting edge trends in this area so I value his opinion and approach to leveraging social media in the B2B space (check out his blog here).
While we talked about several themes, one of the most important ones that we kept coming back to was getting the organizations we work with to think like publishers.
Now if you are in the business of selling enterprise software or solutions, you may ask yourself, “what does publishing have to do with my business?” The conclusion that Dario and I kept coming back to in our conversation- Everything.
Consider the following:
Prospects are educating themselves. 90+% of decision makers have done some sort of web research on existing solutions before they talk to anyone at a vendor. Decision makers are armed with the information that you provide and with materials that are being created by your competitors.
Awareness marketing is the norm. Given the self directed nature of the modern day buying process, it is imperative that the people looking for the solutions that you offer can not only find you with minimal effort, but also find information that is useful to them. To do this, you must create relevant and timely content that is useful to a broad range of constituents. In sum, you are creating for a variety of audiences and needs.
Product knowledge is now easier than ever to share. The proliferation of social media tools and their integration with how we regularly communicate with one another means that your content will reach more people in the purchasing process. Your information isn’t static and doesn’t remain in the hands of the one person that found you on the web. How you present your product/service moves and makes its way to other stakeholders in the purchasing process that you cannot control. Further, the opinions of your prospects and users are now a part of the dialogue.
SaaS changes everything. In on-demand models, product knowledge is increasingly driven by trial. Long term profitability is driven by retention. The role of the content that you produce and manage extends far beyond getting a foot in the door. It is a meaningful part of maintaining an ongoing relationship with trial and paying customers.
It is critical to think carefully about who your audience is, what content you produce, how you distribute it and how to ensure that these consumers of your information continue to pay for this content with their time. In sum, B2B marketers of software and technology need to think like publishers. Sounds basic I know, but most of the B2B companies I see out there don’t do this very well. Does yours?
Enterprise Selling is Like Dating, so Shower Before You Go
You’ve done your homework on the prospect- checked them out on Linked in, looked at their Facebook profile, checked out what they have had to say on Twitter, maybe even confirmed that they are not on a predator database. Now you are ready to meet. After all of this effort to find the perfect mate, would you not want to look your best before you go?
Pretty basic right? And yet I am continually shocked by how poorly many B2B firms approach the initial sales meeting. Over the past 6 months, I have had exposure to half a dozen firms (primarily SaaS companies) who finally get to their first meeting and then create questions about competence, trust, and capability based on what and how they present.
Whether it is the quality of the pitch materials, quality of the demo, or knowledge of the personnel involved on the call I have seen lots of failure points that severely hamper a selling organization’s ability to build an ongoing dialogue with a customer.
Specifically, here is a sampling what I am talking about:
- Presentations- Why do so many people insist on sticking with slides they have prepared for a pitch? If the slides are not facilitating productive conversation with your client, ditch them.
- Unrehearsed demos- Why should you ever have problems doing a demo? Presenters should know the capabilities and potential failure points of their applications inside and out. If they don’t, you’ve got the wrong people.
- Webex technology failures- You would think that people know how to create back up plans for this type of contingency. I have seen it happen more that I care to mention and have seen how clients react to this most basic failure. Have a contingency plan.
- Mismatch of skills/knowledge- I have seen situations where customers are more knowledgeable about technologies/processes than those on the sales team. Make the extra call/email to get a sense for who will be in the room and what they will be interested in and bring the folks on your team who can address the issues. Don’t save follow up for another meeting- you might not get it.
I originally hesitated on writing this post for fear of restating the obvious, but the last demo I participated on was too much for me to bear. Too many people wasting time and money out there!
Implications- If you are a sales or marketing leader, routinely involve yourself in that first customer contact from time to time and ensure that your firm is putting its best foot forward. Have you recently checked to make sure the basics are covered? Consider all the investment that has gone into getting just the opportunity to talk to that one prospect. Start off creating your perfect match with the right impression and for heaven sake, clean up before you go!
Enterprise Selling- Not Just for the Salesperson Anymore
Great thinking from Sameer Patel on Saleforce.com acquisition of Radian6 and discussion of implications for Customer Experience Management (CEM).
Most relevant points/learning for me in the article that resonate with my own experience in selling enterprise solutions:
- Customers now come informed before they are ready to buy
- This is pushing a shift in marketing which requires involvement of entire organizations, not just sales/marketing (marketing fluff won’t cut it with these educated prospects). Note: just because this is needed doesn’t necessarily mean that this is what the selling organizations are offering
- This is in turn driving increased need for all parts of the organization (not just sales) to be listening and engaged in the discussion with customers- and where social networking tools can provide additional value
- The combination of Radian6/Salesforce.com provides an opportunity to begin to manage and mine these interactions, but it has a ways to do this before the vision is realized
One hole in the “stack” that Patel points out in the combined offering is the ability to generate leads. He coyly suggests Marketo/Hubspot as solutions for this, but my question here is how effectively an application can do this. In my view applications help manage the lead generation process, not execute it. If anyone has experience in the effectiveness of these tools or has come across resources which point to the success of these tools, I’d welcome your thoughts and input.
Link to the article here:
While Others Argue on Ownership of Facebook, Let’s Figure Out if We Can Sell on It
WSJ article summarizes findings of a Forrester study that suggests that few businesses are having success with commerce on Facebook.
- Email and paid search are more effective at acquiring and retaining customers
- Generating awareness of commerce on Facebook requires investment (people need to be aware of your fan page)
- Appears to be fallback mechanism for businesses that do not have a website/web-commerce capabilities
In sum, people go to Facebook to socialize, not shop. Something to consider when crafting your business’ social media strategy.
Link to article:
Network Based Selling- Can it shorten the enterprise selling cycle?
Long sales cycles. How many of those of us who have sold enterprise software before have had to deal with this problem? To be sure it’s a challenge that many IT companies face when peddling their wares to clients (and a big challenge for startups that want to sell to enterprise http://wp.me/p1hDJ1-1A). But is it something we as business development professionals just accept and live with? Should we all just crawl back into our respective caves and hibernate until our clients thaw out? After all, what influence could we possibly have on how fast an organization can move?
Over the years I have been developing some thoughts on this based on the experience of the companies that I have worked for and advised, and I believe that in fact there are ways for companies to influence faster decisions, open new market segments and raise awareness by thinking beyond their core customers and looking to the various constituents in their respective supply and distribution chains to provide value. It’s a concept that I am calling “network based selling” which I try and describe in more detail below.
I came across this concept while serving on the board of a company that sold compliance solutions for the insurance industry. Due to the regulatory morass that is the nightmare of the insurance industry, there was this massively complicated paper-based process that involved insurance companies, regulatory bodies and the independent and captive agents that sold insurance policies to end customers. The company I served was formed to take these processes to the digital age. It began by creating a platform for state governments then moved to manage licensing processes with agents, then moved to serve insurance companies.
What is interesting in this case was the momentum and selling inertia that this company was able to gain with the most intractable customers (can it get any slower in IT than government and insurance companies?) because of the fact that it had strong penetration within constituents in the insurance regulatory/distribution chain. Agents liked the company because it had a fairly seamless way to deal with regulators in each state. Insurance companies liked having access to multiple states and thousands of agents. As we bulked up the number of agents and insurance companies we served, we got more attention from state regulators.
The important point here is this. You can accelerate the speed and ease with which companies make decisions about your solutions if you engage other constituents in your client’s ecosystem. Think carefully about your prospective customers’ upstream and downstream constituents- their customers- their suppliers. Is there anything that your company or your solution can do to provide these entities with value? Do these constituents represent potentially new markets for growth? Because if you do build traction in these markets that comprise the “network” of your core clients constituents, you’ll be sure to garner more attention and likely deliver more value for the companies you seek to serve.
I’ll blog more about this concept of “network-based selling” and provide more examples of companies who do this effectively. I’ll also present some ideas on how/where I think this concept can be used more effectively ( e.g., Enterprise Purchase to Pay industry), but my point here is to introduce the topic to my blog and return to it with future posts, examples and content.
Happy selling (in shorter cycles).
HubSpot: Innovator in B2B Marketing
Was recently introduced to a company that is leading the charge in driving the efficiency of B2B marketing called HubSpot. HubSpot makes a platform for SMBs to manage content, campaigns, leads and conversion across all of the social media channels. There’s lots to like about this company, but a couple of things stand out: 1) the way that they are on the cutting edge of using social media for their own marketing and (check out how their lead in terms of twitter followers vs. other top B2B SW firms- http://b.qr.ae/igVyJM ) and 2) the content that they provide on their own site.
If you are a business that sells to other businesses, this is a company worth watching.
Erasing the Stigma of Enterprise Software
I read an interesting article last night (thanks to @JHaughwout) reporting that Andreessen Horowitz (Silicon Valley VC) is bulking up its capabilities in enterprise computing and solutions. There were a couple of great points made in the piece:
1) many VCs have shied away from investments in enterprise solutions because
- Sales cycles are long
- IT purchasers are a difficult sell (are a pain)
- The companies they fund compete with industry stalwarts such as IBM
2) there is a great divide between the quality and usability of B2C software and that of B2B solutions
Why is the elegance we find in consumer applications so blatantly missing on the enterprise side? As the author of the article points out, our experience at home increasingly raises the bar for those who want to play in the enterprise side. People will demand solutions at work that are as functional as those they use at home. Companies who get this will not only be highly differentiated, but will be able to bring a new set of evangelists and advocates for their solutions.
We believe that this “consumerization” of the enterprise space is a very important trend. It is driven by the proliferation of Saas models, infrastructure on demand, outsourcing and increasingly efficient marketing and distribution methods. Its why you will see more content from us on successful tactics used in B2C social media and how these can be applied to the B2B/enterprise world.
Through my experience with small enterprise software companies I have lived through the painful truth of the points above, but currents in the competitive structure of the enterprise software space that suggest that they may not be the status quo for long.
Link to the article:
Why Branding Matters
I was at a forum this week focused on helping a specific B2B technology/services company gain traction on an offering that was designed to provide enterprise security for mobile devices (target market is $1B+ in revenues). As with many of the clients that I have worked with they struggled with the following:
1) Shortening sales cycles
2) Building brand recognition for a new offering
3) Moving into an adjacent market with different decision makers
I will post more on my blog in future posts on topic #1, but I wanted to share the thoughts of one of the panelists on the forum- a CTO of a major hospital system- precisely the target customer for the company’s offering. I got two main insights from his contributions to the talk.
1) Brand recognition matters in so far as it helps in weed through deluge of communications that he gets from vendors on a daily basis . “I get 60+ emails a day from people trying to sell me stuff. If I have never heard of the company before, there is no chance that I will open an email or take a call from them.”
2) References from his peers matter. From same CTO- “If my peers are other organizations are talking about a new technology or company, I take notice.”
In my operating experience and as a business owner and entrepreneur, I have struggled with investments in branding not only because of the expense, but also because of the difficulty of tracking what meaningful results, if any, might result from these “investments.”
But clearly, as the example of the CTO mentioned earlier- it helps drive effectiveness of sales and marketing and makes the path to the decision maker more efficient as well.
The good news here is that with social networking there are new and inexpensive ways to not only drive brand awareness, but also to begin tracking the effectiveness of these efforts. To be sure, effective use of B2B social networking for the purposes of effective lead generation is in its infancy, but we see it as a critical means of driving efficiency and advantage versus some of the older methods that many B2B companies struggle to generate results from today. In future posts, we will explore more specifically how this is done, but for now you may want to check out the following:
For B2B Social Networking: http://bit.ly/fslfC6
For B2B Brand Measurement/Tracking: http://buswk.co/e1tQgp
