After serious cutbacks in the early 2000s due to overall cuts in marketing
budgets and the push toward all things digital, live events are seeing
a comeback among technology and services marketers. The types of events
that marketers are investing in have changed, with more emphasis today
on smaller events such as executive-level seminars, customer councils,
and advisory boards rather than large conferences and trade shows.
But one thing remains the same: Face-to-face interaction with customers
and prospects has the power to build relationships faster and more
effectively than any other marketing vehicle out there.
Back when he was the CMO at Mercury, Christopher Lochhead told me
that he spent a full 50% of his time meeting with customers. As you
peruse this month's E-ZINE, which contains a number of stories
that touch on best practices for communicating through social media,
building online customer communities, and bolstering word-of-mouth
marketing, don't forget that spending actual face time with your customers
is one of the smartest marketing moves you can make.
"Online communities and social networks aren't democracies," said Rob
Key, CEO of Converseon, at the Authentic
Communications conference last week in New York City. "They're oligarchies.
And marketers can't just steamroll their way in."
Indeed, many of the speakers and panelists at the conference emphasized
how important it is for marketers and their brands to be perceived as
"authentic"—or credible—when they interact with customers, both online
and offline. As Key pointed out, however, credibility is hard to come
by in today's market. Customers, constantly bombarded by marketing messages,
trust each other, but they don't trust you. And thanks to new social media
such as blogs, individual customers have more power to influence opinion
than they ever have before. (Ever run a Google search on a company and
seen a post from a disgruntled blogger appear on the first page of results?
Scary, isn't it?)
Here are a few tips for avoiding the "steamroller" approach to marketing
and improving the authenticity of your communications:
Think (and listen!) before you speak. Joe Puglisi, vice president
and CIO of EMCOR Group, dislikes getting cold calls from sales reps
who tell him that "our solution will provide a 32% cost reduction in
X, Y, or Z for your business." These calls frustrate him because the
callers "don't know me, my business, or what [technology] we currently
have." It's presumptuous to burst onto the scene and insist that your
services and solutions are the answer to your customer's prayers. Customers
won't believe you unless you've done your homework ahead of time. Spend
time with them. Listen to them. Learn what's important to them, and
then see if you can connect your offerings to their priorities and pain
points.
If you're hoping to connect with customers through new Web 2.0 tools
and channels, be sure that you understand the rules of engagement for
the medium before you step into the fray. "The code of conduct for Second
Life is very different from the code of conduct for Wikipedia," said
Key. "Hang back and learn for a while before you jump in and participate."
'Tis better to give than to receive. Marketing has traditionally
been about getting people to pay attention to a particular brand, message,
or offering. Today, however, it's important for marketers to focus on
giving attention to customers. Ryan Donovan, director of corporate media
relations and overseer of the employee blogging program at HP, believes
that social media such as blogs and online communities have made it
much easier for companies to give attention to customers: "The best
way for companies to use social media is not simply to produce their
own blogs, but rather to 'fish where the fish are' and see what other
people are saying. This gives us an opportunity to address problems
and concerns before they bubble up to the mainstream media." Carol Wallace,
director of external communications at Pitney Bowes, agreed with Donovan,
adding that people respond positively when a company is participating
in a conversation because it truly wants to share knowledge (as opposed
to participating purely to make a sale). As ITSMA's Dave Munn emphasized
during our State
of the Profession Briefing in January, marketers are increasingly
being called upon to deliver direct value to customers. Using social
media to address problems and share knowledge is one way to do this.
Don't be afraid to let multiple people represent the company.
Jim Nail, chief strategy and marketing officer at market influence analytics
company TNS MI/Cymfony, told a great story about a blogger who loved
Netflix. Because he blogged about Netflix all the time, people started
writing in with questions about the video service. When the blogger
asked Netflix if they could address some of the questions so that he
could respond to his readers, Netflix refused to do it, saying that
he was not a company spokesperson. What a wasted opportunity! There's
no better "marketer" than a customer advocate, and Netflix shut this
guy down for fear of having someone out there who wasn't toeing the
company line.
Along those same lines, many companies are realizing that customers
trust the expertise of company employees more than they might trust
the marketing folks. Companies like HP are encouraging employees to
share their expertise through official employee blogs. "You can't handcuff
people and tell them to say certain things or not to say certain things,"
said HP's Donovan. "You set rules that maintain order (such as not trashing
the competition or using profanity) but don't constrict, and then you
let people share their expertise."
As Key pointed out at the conference, customers are the ruling class
on the Internet, and they have the power to dramatically amplify both
good and bad word of mouth. To increase the chances that your company
will garner a positive reputation, listen to your customers, look for
ways to share knowledge and expertise, and don't be afraid to let different
voices be heard.
New
Thinking
Talking About Word-of-Mouth Marketing with Zócalo Group's Paul Rand
Paul M. Rand, president and CEO of word-of-mouth marketing agency
Zócalo Group, recently
sat down with us to discuss the difference between "buzz" and sustainable
word of mouth (WOM), the five influencer groups marketers need to pay
attention to, and the biggest mistake companies make when trying to generate
WOM.
ITSMA: Paul, when people talk about word-of-mouth marketing,
we often hear the term "buzz" bandied about. Can you tell us more about
buzz, and why it's not necessarily a good thing for a B2B firm to cultivate?
Rand: Buzz is a company's "15 minutes of fame." It's a quick hit
that's often born from the launch of a new product or service, and it
fades quickly. What we've seen is that buzz is useful for driving impulse
purchases, which can make it appropriate for the B2C world, where people
sometimes make quick decisions about what to buy. But businesses typically
don't make impulsive B2B purchases. They have to build a business case,
and they have to get buy-in from senior executives. B2B firms need to
find a way to generate sustainable WOM that will shorten the sales cycle,
eliminate barriers to purchase, and minimize the need for research and
comparison. Buzz typically won't do that.
ITSMA: What are the first steps in building sustainable
WOM?
Rand: The first thing a company needs to have to generate sustainable
WOM is good products, services, and solutions. No marketing campaign is
going to cover up an inferior offering, although you can use a WOM approach
to get the feedback you need to improve your products and services. But
really, remarkable offerings are the foundation of any WOM program.
Next, companies need to make sure they have the tools and resources they
need to amplify the organic WOM they receive as a result of having high-quality
offerings. Here are a few of the basics:
Ownable positioning. If a company doesn't know how and why
its offers fit into the marketplace, it can't expect customers to know.
Shareable stories. These stories articulate a problem or need,
talk about the solution to the problem, show how your product or service
fits into the solution, and explain why customers should trust you.
Dialogue. A real desire to engage with customers, influencers,
and others. A willingness to monitor, listen, and act on customer feedback.
Platform and tools that enable dialogue. Blogs, podcasts, online
communities, and other tools that allow the company to engage with outside
audiences.
Continuous "provement." Creating meaningful opportunities to
continually engage key audiences and re-prove value.
ITSMA: Who is best the audience for WOM marketing?
Rand: We talk about five different audiences for WOM marketing:
Customer evangelists. These are your most passionate customers.
They advocate for you because your success is their success. They are
your most important audience.
Industry eminents. These are the thought leaders (analysts,
journalists, bloggers, etc.) in your space. Without their "seal of approval,"
you'll have a hard time gaining credibility with prospects.
Peer influencers. These people impact the perceptions and buying
behaviors of friends, colleagues, and others.
Bees. These are mass market "buzz creators" on the lookout
for the "next great thing." They'll be on your side until the next big
thing comes along, and then you'll be history.
Determined detractors. These are the individuals and organizations
likely to initiate and/or perpetuate negative WOM.
Companies need to engage all of these groups, but their engagement strategy
will be different for each one. Bees won't respond to the same types of
communications and programs that evangelists will, and detractors won't
respond to the approach you take with industry eminents. It's important
to ensure that you have a sound strategy for reaching out to each of these
very different audiences.
ITSMA: What's the biggest mistake companies make when
they're trying to create WOM?
Rand: Not being transparent is one of the worst mistakes I've
seen. Look at how badly Wal-Mart got slammed for its fake blog. All Wal-Mart
needed to do was include a little line on that blog indicating that it
had been created by the company and they could have avoided all the backlash
and negative publicity they received.
Another big mistake is thinking about WOM marketing solely as a way to
generate some short-lived buzz. WOM marketing takes discipline and focus.
It involves active listening, customer research, PR, AR, and blogger relations,
relationship-building programs like customer councils and communities,
interactive campaigns, and direct communications. Research has shown us
time and time again that peer recommendations are the single most effective
purchase driver there is. A holistic WOM marketing approach will help
your company harness the power of peer referrals to improve overall marketing
results.
In late 2005, Avaya uncovered a large opportunity. Extensive market research
showed that customer demand for hosted IP communication solutions was
growing, and the company seized the opportunity by building and launching
three new "Avaya On Demand" solutions in just nine months.
But what made Avaya, an equipment provider, decide to move into a realm
dominated by service providers with Avaya On Demand, a solution set that
delivers IP communications applications on a per-user, per-month subscription
basis?
"Historically, Avaya has focused on large one-time sales and the implementation
of hardware and software," said Julie French, senior marketing manager
at Avaya. "But more recently, we've focused on using our services capabilities
as a differentiator. Avaya on Demand is truly a 'software as a service'
business and one of our first major moves down this path."
Pricing Strategy
Pricing was a key focus for Avaya, which wanted to provide significant
value and flexibility for customers of all sizes and to demonstrate compelling
total cost of ownership (TCO). The pricing was designed to be highly flexible
so that customers pay only for what they use on a monthly basis.
Customers can choose to bundle almost anything in their monthly pricing,
including platform hardware, software, all services, gateways, phones,
and even some of the installation costs or network assessment costs. In
addition, customers can choose any combination of advanced applications
and provide any combination of licenses to their employees based on job
requirements.
Based on feedback from customers and channel partners, the company developed
special pricing for customers who are interested in Avaya On Demand as
a seasonality overflow or a disaster recovery solution. It also created
volume discounts for large customers.
Enabling the Channel
Avaya knew that the success of Avaya On Demand hinged on changing the
mindset of its sales reps and channel partners. According to French, "We
needed to get them to think about new revenue models and new solutions
for their customers, to sell a managed service instead of a product, and
to talk to their customers about business needs and financial flexibility
instead of just technology."
To do this, the company put together a comprehensive training plan that
covered how to position, sell, order, and provision the solutions. Avaya
conducted several types of training sessions to ensure maximum exposure,
including:
Online training
Live training via Web conferencing
"Train the trainer" sessions
Face-to-face training sessions
To support the channel, Avaya conducted in-depth sales and process training
for each reseller, provided 24/7 access to online training, and offered
an email helpline for questions.
Along with an extensive array of sales tools for its reps, the company
also executed an extensive internal communications plan that included
internal newsletters, headlines, sales team calls, and a very large presence
at the Avaya Sales Conference.
The External Launch
The team determined that a key benefit of Avaya On Demand is that it
reduces their perceived risk of implementing IP communications, so "risk
mitigation" was the key messaging that anchored all the marketing materials,
at both the portfolio- and solution-level. Just a few of the marketing
materials the team created include Flash demos, interactive presentations,
brochures, white papers, and TCO tools.
Building awareness was one of the most critical strategic underpinnings
of the launch process. The team took a multifaceted approach that included
PR, AR, trade shows, customer events, Web presence, speaking engagements,
and advertising. The May 2, 2006, launch was anchored around two key events
that both occurred that same week: Interop, a huge industry trade show,
and the International Association of Avaya Users, a large customer-focused
event with over 2,000 Avaya customers. In addition, Avaya recruited XM
Satellite Radio, which deployed Avaya On Demand three weeks before the
public launch, to serve as a case study during the launch.
Results
The conceptualization, realization, and launch of the Avaya On Demand
solutions was a significant success for the company. The solutions offer
Avaya’s customers a compelling value proposition, allowing them to migrate
to IP at their own pace and reduce the risk of an IP implementation. In
addition, the launch team was able to create and launch the solutions
on a very tight timeline while still adhering to Avaya’s strict quality
measures.
Avaya On Demand was very well received by customers, the channel, and
independent industry thought leaders. Leads, closed deals, Web visits,
and premium content downloads have all outstripped objectives in the months
following the launch, and the company continues to hear customers and
analysts talking about the benefits of the hosted model and the future
growth potential of this delivery model. Avaya believes that this solution
and delivery model will make a significant impact on the IP communications
industry because it gives customers what they want: choice in how to deploy
IP communications.
Humans are naturally drawn to social interaction, collaboration, and
communication. Today advances in technology and the emergence of the Internet
have made it easier to form many different types of communities on a global
scale—some with startling results.
During our European
Marketing Forum this year, ITSMA will take a closer look at customer
communities and explore some of their characteristics, market trends,
how they emerge, and lastly, how they evolve over time.
What Is a Customer Community?
The Oxford English Dictionary defines a community as “a body of
people organised into a political, municipal or social unity.” These days,
technologically enabled communities are proliferating on the Internet
and are fast becoming an important consideration for businesses.
Common characteristics of a customer community include:
A shared meeting place that enables customers to locate, meet, and
interact
A meeting place for people with shared or common values
Members with a strong sense of affinity and emotional identification
with the site
A means to exchange knowledge, information, and opinions
A vehicle that facilitates dialogue and collaboration between companies
and their customers
Why Are Customer Communities Interesting for Businesses?
The rise of online communities such as YouTube and MySpace is spearheading
the consumer adoption of technology. Today consumers are extremely active
in developing content and interacting with others online.
In the commercial space, customers want suppliers they can trust and
who know them. The ability to interact and shape product or services offerings
has a very powerful influence on building loyalty and retention.
For businesses, online communities offer a means to drive innovation
and product development, improve business processes, and communicate with
engaged customers and prospects in a cost-effective manner. Channel marketing
and affinity models are enhanced through the medium, and word-of-mouth
marketing and viral marketing are growing means of locating suppliers
and buyers.
A good example of a successful customer community can be seen in the
Dell consumer Website IdeaStorm. For example, after receiving feedback
from over 10,000 consumers through the site, Dell reinstated the option
for the Microsoft XP operating system to be preloaded on its PCs.
Thinking of Building One?
Companies considering entering the fray of online communities should
do so with clear objectives and commitment. Building a community takes
time and requires considerable effort to maintain relationships with members.
This affinity and emotional alignment sit at the core of a successful
community.
Here are a few things to keep in mind in building a community:
The community should be seen as a valuable extension of the company's
value proposition and a service for the community rather than to the
company.
There should be a clear owner within the organisation—one who has
defined roles and responsibilities.
The tools and experience should be updated continuously to ensure
that community feedback and requirements are acknowledged and converted
into value for all.
When done well, an online customer community can be an extremely powerful
and effective extension of the marketing function. Done poorly, it can
do irrevocable harm. Therefore, it is wise to experiment and learn in
a "safe" environment before launching a full-scale initiative.
Research Desk
Ask ITSMA: Who Makes the Purchase Decision for Renewing Support and
Maintenance Contracts?
Each month, ITSMA receives a number of queries through Ask
ITSMA, a resource designed to give members a quick and easy
way to get insight on important services and solutions marketing
questions they face. In this column, we will publish some of our
favorite questions along with excerpts from our replies.
Question: Who makes the purchase decision for renewing support
and maintenance contracts? The CIO? The CFO?
Answer: The truth is, various people play many roles during
a purchase process, and different people have different levels of involvement.
Often a C-level executive gives the ultimate approval but has very
little exposure to the sales and decision process. The C-level executive
looks at the business case—and possibly at the alternatives and
recommendations—prepared by the technical staff. The typical
purchase decision process has multiple steps, including:
Identify the need
Conduct the initial research
Establish service specifications
Identify alternatives and compile a shortlist
Evaluate alternatives
Select the provider
Negotiate the price/terms and conditions
The IT VP, director, or manager is most often involved in the maintenance
and support decisions. One person will probably complete multiple steps,
but as many as eight or 10 people can be involved in a single decision.
Of course, with a renewal decision, many of these steps may be condensed
or even skipped, making the decision process less complicated.
Do you have a services marketing question? Visit Ask ITSMA to access
our experience, insight, and research results.
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News & Notes