As marketers, it's our job to be obsessed with the new, to embrace new products and services and spread the faith. We often think of ourselves as being in the vanguard of change. But in reality, all of us are naturally inclined to resist changing and learning new things. Thanks to advances in brain-scanning imagery, scientists have determined that our reaction to new concepts is both predictable and universal: We avoid them whenever possible.
Learning new things hurts. Not the boo-hoo, woe-is-me kind of hurt that executives tend to dismiss as an affliction of the weak and sentimental, but actual physical and psychological discomfort. And the brain pictures prove it.
New concepts light up an area of the brain, the prefrontal cortex, which is like RAM in a PC. The prefrontal cortex is fast and agile, able to hold multiple threads of logic at once to enable quick calculations. But like RAM, the prefrontal cortex's capacity is finite—it can deal comfortably with only a handful of concepts before bumping up against limits. That bump generates a palpable sense of discomfort and produces fatigue and even anger. That's because the prefrontal cortex links tightly to the primitive emotional center of the brain, the amygdala, which controls our fight-or-flight response.
What does this have to do with B2B marketing? Science has affirmed what we have all suspected for years: People hate being told what to think. For those of us who do not have the ad budgets to pound our messages into customers' brains whether they like it or not, we need a different approach. The way to get past the brain's defenses is to help people come to their own resolutions regarding the messages we are trying to impart—to get them to change their minds themselves. These moments of insight—call them epiphanies or "aha moments"—appear to be as soothing to the brain as the unfamiliar is threatening. Think about the moment when you finally figure out a puzzle you have been struggling with. You can feel your face lighting up with pleasure.
Marketing messages need to be clear, simple, and not overly detailed for the light bulbs to go on over customers' heads. Especially in B2B, which is so complex, marketers need to resist the urge to think that specification sheets constitute effective marketing. Complex explanations do not leave enough room for people to have their individual epiphanies. Leave room in your marketing messages for customers to fill in some of the details themselves.
Do you agree? How are you getting customers to have epiphanies about your products and services? Email me at ckoch@itsma.com.
What's
Hot
Stop Looking in the Rearview Mirror to Predict the Future
ITSMA research shows that the discipline of measuring the return on marketing activities leads to better resource allocation, which in turn leads to improved results. But to get the full benefit of marketing measurement, it must become a crystal ball, able to predict the success of a particular program or portfolio before a single dollar is spent.
Few companies have built this kind of analytical capability yet. But at least marketers are preparing the foundation. A recent ITSMA survey found that 76% of marketers have increased their emphasis on measuring marketing. Effectiveness skyrockets when marketers are accountable and they measure results. Indeed, of the marketers who said that they were having a significant business impact, 40% have measurement as a line item in their budgets.
The Virtuous Cycle of Measurement
Better allocation of marketing resources is a top benefit of measurement. Indeed, measurement creates a virtuous cycle. When marketers have the data about which marketing activities are more effective, they can shift the budget and change the marketing activity mix so that they are spending more of their time and budget on the activities that are most effective.
However, making this transition to predictive analysis is difficult. In part, that's because marketers and businesspeople are used to relying on their gut instincts to make allocation decisions. They view metrics as fodder for making a gut decision rather than as the leading factor in the decision.
Beyond the Gut
Marketing strategies are often based on perceptions of value that may or may not be true. Without hard data, impressions harden over time until they seem like data.
Perhaps the only thing worse than businesspeople doubting the value of marketing is their certainty that the wrong program adds value. The only true certainty is disappointment when the wrongheaded strategy fails to live up to expectations. Reliable metrics are the best way to wean people from relying on their gut instincts.
But there are flaws in current marketing metrics that need to be resolved before moving to the analytical level:
Too soft. Marketing measures tend to focus on softer concepts such as awareness, attitudes, and recall that do not tie to outcomes.
Fragmented. Metrics tend to focus on specific campaigns rather than providing a holistic view. Divisions in business line, geography, and field versus centralized marketing also fragment data.
Backward looking. Historical data won't predict the future unless it is modeled and analyzed properly.
Limited scope. Most companies measure only some of their marketing activities, which prevents a comparison across the portfolio.
Lack of systems integration. If marketing activities are captured within computer systems at all, those systems are usually fragmented so that data cannot be analyzed in a holistic fashion.
The Steps to Looking Forward
Corporate marketing needs to take the lead to get past these hurdles. Only corporate has the influence to integrate measures across all of marketing to create a holistic view and a more direct line to business results.
But that is just the first step. Creating a truly predictive analytical capability also requires the following:
Gather adequate data ranges. Accurate predictions come from a truly representative set of historical data. For example, HP loaded two years' worth of past marketing campaign data into its predictive model to mitigate the effects of unusual anomalies or one-off campaigns.
Do the math. Create algorithms for analyzing the historical data to provide predictive analysis.
Segment for accuracy. Results for particular marketing campaigns can vary widely, even if the campaign is of uniformly high quality. Different audiences may respond differently to the same campaign, whether the differentiating factor is an issue of rank, purchasing goals, the product or service sold, geography, or culture. One ITSMA member company segmented its data by business unit to be able to analyze the effectiveness of programs by particular products and services.
Put the competition in the model. It is important to understand competitors' product and service strategies as a factor in determining the future allocation of marketing services. For example, if a competitor is planning to introduce a new product, marketers should factor that into the analysis of future marketing resource allocation and monitor the competitor's conversations.
Have you made the move to predictive analytics? Do you have best practices to share? Contact us at jschwartz@itsma.com or ckoch@itsma.com.
New
Thinking
Larry Weber: Why B2B Marketers Need to Get Customers Talking
Larry Weber is outspoken about the impact of the Web on the world in general and on marketers in particular. Drawing upon his early introduction to the Web and his experience building a number of interactive marketing agencies, Weber has written a book—no, a manifesto—about how marketers must reinvent themselves and their discipline: Marketing to the Social Web: How Digital Customer Communities Build Your Business. [[http://www.amazon.com/Marketing-Social-Web-Customer-Communities/dp/0470124172]] This month we continue our conversation with Weber, who is chairman of the W2 Group.
ITSMA: During your session at the ITSMA 2007 Annual Marketing Conference, you said that in the Internet era "brand is dialogue." Explain what you meant by that.
Larry Weber: Customers want a dialogue with your business; they want to know you are there and available 24/7. The idea of branding in the social Web is the dialogue you have with your customer. The stronger the dialogue, the stronger your brand; the weaker the dialogue, the weaker the brand. You have to think of customers as transmitters of your conversation. They're already having conversations with one another about your products and services anyway. It's up to you to ensure that your organization participates in that conversation and to convince community members that you care about what they think and say about the brand, the products, and the services.
ITSMA: You said at the conference that the more IBM walls off portions of its site, the more popular the site becomes. Explain that.
Weber: Customers belong to community Websites like MySpace and Facebook in the social sphere. But they also need social sites that fulfill their professional needs. That means creating communities where your customers can have conversations about your brand. Companies like IBM and Cisco are creating private Web communities around specific micro-segments of their audiences. So, for example, they might offer a podcast just for CIOs in healthcare. The CIOs talk to each other, but it's the B2B company that is supplying content, aggregating external content, and providing the place for these conversations to happen. This year and next year, you will see marketing budgets going away from things like marketing collateral, direct mail, and TV. That money will be invested in more community building that is very focused on content.
ITSMA: Many top executives at companies are showing a reluctance to participate in the social Web, both as spokespeople for their own companies and as participants in other companies' dialogues. Do you see that changing?
Weber: Top executives still want to have control over the message and the conversation. But you know what? They can't control either anymore—if they ever could. These conversations are happening on the Web whether they participate or not. It comes down to a choice: Do you want your people commenting on your competitor's site or your site?
Blogs and communities are starting to take the place of trade magazines. Senior executives were always part of the trade publications, so they are going to have to be part of this channel, too.
ITSMA: When ITSMA surveys marketers and their customers, the consumption of these new content channels comes out pretty low. Most B2B marketers are still in the early experimental phases of this movement. So what's your elevator pitch to the CFO for making the move to digital marketing?
Weber: My pitch is no matter what, it's going to be cheaper than traditional marketing because your customers will provide you with some or even most of the content you need for nothing. That means you don't have to spend as much on media.
I see companies spending $20 million on huge marketing and advertising events where instead they could spend $1 million to build an interactive community that targets a very special area of their customer base. Customers don't have time to come to all your events. You could give them an online experience that comes close for a fraction of the cost.
ITSMA: Everyone seems to be approaching this in terms of technology. They ask whether podcasts work, or whether they should be in Second Life. Is that the way to be approaching this?
Weber: No. I think those are just tools. First, you have to figure out what your message and content are. Then you can figure out whether it should it be a podcast or a Webinar.
One thing I'm telling companies more and more, however, is that you have to think visually. Because the next generation of interfaces is going to be really media-rich. It's going to be like your HDTV at home. Marketers need to think much more visually than in the past.
ITSMA members can read the full interview with Weber at www.itsma.com.
It may sound a bit jaded, but being strategic is a time sink. It isn't easy for marketing to play a bigger role in determining the future direction and strategy of the company while also doing all the traditional activities that the business has come to expect. It certainly isn't obvious when looking at traditional marketing metrics, which tend to count what can be counted.
As we are asked increasingly to get involved in the more strategic areas of marketing such as market intelligence, segmentation, targeting, company strategy, and direction, how do we ensure that the benefit of these actions is taken into account when we're analysing marketing performance? This was the main question grappled with by the attendees at our European Round Table, Measuring Up to Expectations: Marketing Metrics that Work.
The simple answer is that if basic marketing activities are well targeted and executed, a positive impact on the business will come naturally. But that oversimplifies things. In reality, marketing needs to take a harder look at the split between quantitative and qualitative measures. The impact of more tactical activities is more clearly shown quantitatively (number of events attended, number of delegates at hosted seminars, leads generated, brochures produced, etc.) while for the more strategic areas of marketing the balance needs to swing towards qualitative in order to evaluate their true input to the business.
What Is Impact?
Yet as we swing away from the traditional emphasis on more concrete marketing activities, we cannot seem to get away from the need to assess marketing's overall impact quantitatively. The business may acknowledge the value of marketing's strategic activities but continue to demand a number when assessing marketing's overall impact.
If we look at marketing's impact on the business, the measurements most of us would consider would be increase in revenue, number of new customers, size of deals, win/loss ratio, and so on. The obvious issue with each of these is apportioning a value to marketing's input; how do we quantify the impact marketing has had on each of these wider business metrics? In this particular scenario, the acknowledgement of marketing's value will be influenced by the relationship between sales and marketing, which will be subjective, to say the least. So again, there is a need to ensure the correct balance between measurable data and more qualitative input.
Unfortunately, few of us have the capability to do such sophisticated analysis today. When members were asked what their marketing measurement system looked like, 68% of the respondents to ITSMA's marketing metrics survey said it was an Excel spreadsheet. Any volunteers for some development work?
Research Desk
Ask ITSMA: How Can We Improve Our Sales of Services with Products?
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.
We are looking to create new offers to help increase our ability to sell services along with our products. What is the latest thinking on this issue?
As technology continues to improve and become more standardized, marketers have a tougher time creating appealing services offers to go along with products. It boils down to an issue of risk. Take computer hardware, for example. Technology is changing so fast and becoming so inexpensive that many customers feel increasingly emboldened to stick with the standard warranty. Improvements in software and increased acceptance of industry standards give IT much more flexibility to shift resources from a cranky machine temporarily—or simply throw it away—rather than call for support. Customers can afford to settle for the bronze—the longer response time that comes with "basic" service—and eschew the gold.
Unfortunately, there are no shortcuts around this difficult challenge. Indeed, now more than ever, marketing needs to do the hard work to understand customers' specific needs in order to create services offers that will sell.
Here are some ways to improve customer understanding and better target services offerings:
Invest in growing and refining the customer database to provide the necessary research to create more targeted value propositions.
Conduct research with customers to understand their thinking during the awareness, interest, and consideration phases of the buying process, to shape more targeted value propositions.
Participate in online conversations (self-help, user groups, etc.) to spot problems and build awareness of advanced services.
Push more targeted emails and follow up on telemarketing or telesales calls to generate more leads.
Offer commissions to the product sales force to sell services at the point of sale.
Integrate services into the selling process at all levels so that representatives don't need to seek out services to offer and customers don't have to ask about them—they are automatically presented as an option.
Include advanced services in renewal campaigns.
Avoid selling advanced services only when customers come to you with problems; it makes you appear reactive and opportunistic.
Do you have a services marketing question? Visit Ask ITSMA to access
our experience, insight, and research results.
Benchmarking Study
Account-Based Marketing: Critical Metrics for Marketing and Sales
* Accepting study sponsors and participants (one survey respondent per company only, please) through March 15, 2008
Account-Based Marketing (ABM) is hot! More and more companies are increasing investments in marketing and sales programs that target individual accounts. But industry benchmarks to shape and bolster ABM programs do not yet exist. This study will gather critical marketing and sales best practices and benchmarks to help you improve your ABM activities.
*For more information on the study and fees, contact Julie Schwartz at jschwartz@itsma.com.
Benchmarking Study
Brand Perceptions and Priorities from the Customer Perspective
* Accepting study sponsors and participants (one survey respondent per company only, please) through March 28, 2008
Professional services remain core to successful technology enablement. Buyers confront difficult, risk-laden decisions every step of the way. After establishing their priorities, buyers must evaluate firms against these priorities to make a defensible selection. This study examines how buyers evaluate services providers, illuminates industry trends, and recommends actions to achieve best-in-class performance.
*For more information on the study and fees, contact Lori Weiner at lweiner@itsma.com.
This Update outlines the four primary components of WOM management—monitor, engage, manage, and measure—to help services and solutions marketers better understand how they can harness the power of WOM marketing.
In this online briefing, Dave Munn and Julie Schwartz give great news for services and solutions marketers: Over the course of 2007, marketing's profile within the business improved, budgets increased, and staffs expanded. But with dark clouds hanging over the U.S. economy and growing fears of a recession in 2008, it's more important than ever for marketers to remain ahead of the curve.
News & Notes
Marketing Excellence Awards
Share your services and solutions marketing successes with ITSMA by submitting an entry to our 2008 Marketing Excellence Awards program. We've just announced this year's categories. Learn more at http://www.itsma.com/News/mea/default.htm.
Coming Up
Increasing Growth in Key Accounts:
Designing and Delivering Account-Based Marketing
During these Briefings, ITSMA's Bob Baginski will share what companies are measuring today, and why; discuss tips for creating an effective marketing portfolio and ROI table; review results of recent ITSMA research; and highlight case studies of companies that are doing it right.
Positioning Yourself to Win:
Strategies for Outsmarting the Competition
Generating demand has become a top priority in today’s slowing economy. Learn how to improve your demand generation activities with keynote speaker Brian Carroll, CEO of InTouch, Inc., and author of Lead Generation for the Complex Sale. There will also be case study presentations from top-level marketers including Paul Dunay from BearingPoint, Janis Fratamico from IBM, and Jean Ostvall of Accenture. (This Forum is designed for senior-level marketing and sales professionals only, please.)
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News & Notes