Customer segmentation in most companies is starting to look like a hairy knuckle dragger, mired in a Stone Age era defined mostly by demographics. The successor on the evolutionary scale, segmentation by vertical, is so commonplace that it is going to win as many battles for business as a Bronze Age spear.
We know that B2B marketing needs to become more personal. The demand has always been there, but it is getting an especially strong push today from the civil war raging in most businesses between traditional corporate computing and the consumer-based applications that employees are bringing into work. Put simply: Your home computer does more than your work computer now.
Good consumer applications live and die by their level of personalization. Indeed, Facebook is already atomizing into many mini-Facebooks focused on narrowly defined special interest groups. Customers—especially younger ones—expect to be able to engage with their suppliers and partners on the same personal level on which they engage with friends and contacts through their consumer applications.
B2B Is Different
But as B2B marketers move to personalization—or personas, or role-based marketing, or whatever else you want to call it—they are encountering a big problem. B2B ain’t like consumer marketing. It is schizoid. The B2B “buyer” is really many people, from the CEO to the business user, from the CIO to the programmer. With so many different constituencies in the purchasing process (never mind the installation and long-term usage processes) and with many overlapping interests across these many groups (good project managers are interested in business value, just like the CFO), marketers can drive themselves crazy and drain their meager budgets pretty quickly.
Yet there is no turning back. The core audience for technology services marketers—IT people—are the fastest adopters of Web 2.0 technologies and they have a growing expectation for personalized content that is not going away anytime soon. The issue then becomes refining the personalization strategy so that it has the most impact on a limited budget. That translates into six drivers:
Prioritize. Of all the different job roles and people involved in the purchase, installation, and long-term usage processes, some matter more than others. Interview salespeople to find out who they are and start there.
Automate. Clearly, marketers need to let the Website and social media do the heavy lifting on personalization through such techniques as portals, dynamic content, and online communities.
Educate. Even if the content doesn’t turn out to be as personal as you wished or as customers expected, making sure that it educates all readers on an important business or technology issue—not just your products and services—will dispel much, if not all, of the disappointment.
Reuse. You should have two different types of content: core content and personalized content. The fundamental messages of the white papers and Web seminars can be used in many different settings. The personal content can be a tweak of the core—say, rewriting the top and bottom third of a white paper—or a layer on top of the core, such as bringing in an outside speaker to a Webinar to add a personalized layer on top of your company’s presentation.
Aggregate. A gazillion bloggers can’t be wrong. Using others’ content as a jumping-off point for a more personalized dialogue is cheap and easy.
Commit. You can’t love them and then leave them after they’ve purchased. The shift to personalization requires an attendant shift in marketing emphasis away from the almighty lead and toward the existing customer.
How are you handling personalization with your customers? Email me atckoch@itsma.com.
As economic fortunes tighten, the need for marketers to learn more about customers—a growing trend even in good times—will become even more important. ITSMA research shows that CIOs and business leaders are looking to reduce the number of companies with which they are doing business and establish better and deeper relationships with a select few.
The yardstick for determining who stays and who goes? Providers who truly understand customers’ business and IT requirements, have done their homework, and have proven themselves trustworthy.
Indeed, in this climate, the cold call is going the way of the shivering dinosaur. A recent ITSMA survey found that when selling to new accounts, 80% of salespeople’s time is devoted to “warm calls” (prospects who have already received marketing touches such as white papers or Webcasts) versus 20% spent on cold calls.
Penetrating New Accounts Is Getting Harder
Warming up those prospects is the responsibility of marketing, but the job isn’t getting easier—especially when marketers try to penetrate new accounts. In ITSMA’s survey, 50% said it is more difficult to penetrate new accounts today, with only 12% saying it is getting easier. But the slowing economy also means opportunity: 58% said it means they could take business away from competitors.
How then to warm up new accounts in these tough times? Jeff Sands, director of membership engagement for ITSMA and leader of ITSMA’s Account-Based Marketing consulting practice, offers some advice:
Do your research. Understand the market in which the target account exists, the dynamics of that market, and how it impacts the company’s ability to succeed.
Build channel partnerships. ITSMA research found that 63% of respondents have formal channel programs to generate new accounts through channel partners.
Integrate campaigns and systems with partners. It’s difficult to build deep knowledge about new customers if you can’t see what channel partners are doing with them. Of the respondents who are generating marketing leads for channel partners, 47% are tracking those leads through an internal customer relationship management (CRM) system.
Find out what competitors are doing. Differentiation doesn’t happen in a vacuum. Services marketers all tend to use the same language as part of their messages—the techno speak of the high-tech industry. It behooves us to step back and see what others are saying, to make sure that we are really differentiating.
Be Patient
Once you get the lay of the land and develop contact points with customers, it’s important to avoid trying to make the sale too early in the process. New customers are generally not ready to buy for quite some time—ITSMA research shows that customers need an average of 25–30 touches before they will buy complex technology solutions.
Yet with most sales representatives having between 75–100 accounts to cover, it’s impossible for them to gain the kind of knowledge they need about a customer’s business and market position. They simply don’t have time—and many don’t have the skills.
Educate, Don’t Sell
Marketing needs to step in and provide that information. But that information should not be focused on making a sale. It should be focused on educating the customer. “Educational material is the best way to penetrate a new account,” says Kathy Macchi, senior associate at ITSMA. “Customers are saying, ‘Tell me, don’t sell me.’”
But marketing should not be educating customers about the company. The emphasis should be on customers’ business and technology issues. And the content that marketing sends them should come from third-party sources at first—analyst white papers about a business or technology issue, for example.
Like breadcrumbs in a forest, the marketing touches should proceed logically, educating customers at every step of the way until they are ready to learn about the company’s specific offerings. “To penetrate the account there has to be an ongoing presentation and dialogue with the prospect, and you need to be educating them along the way,” says Macchi. “The goal is not to sell them but to get them to think of your company first when they are ready to buy. That’s all you can do as a marketer—increase mindshare.”
Why You Should Feature Competitors on Your Website
If giving your competitors a place on your Website sounds like heresy, you’re right. It is. But customers have become so empowered by the Internet that B2B marketers need to start thinking like heretics, says Gord Hotchkiss, President and CEO of Enquiro, a B2B search engine marketing company.
ITSMA:By now, everyone is aware of using keyword search to drive traffic to Websites. Is there more that marketers should be doing with search to take it to the next level?
Gord Hotchkiss: Most companies that are doing search really haven’t approached it from the perspective of the person doing the search. They approach it from the other end. They say, “Well, we know what keywords convert to leads.”
They haven’t flipped that 180 degrees and said, “Okay, who are my prospects? How would they be using search?” The analogy I use is a shopping mall. The first thing I am going to do when I walk into a shopping mall is to look to see if the mall is carrying what I am looking for. Humans being humans, we don’t want to see just one result. We want to see a few results that reinforce that this shopping mall offers me not just a selection of possible solutions but also the solutions I am expecting to find there. For example, if I am searching for CRM software, I expect to see Salesforce, Oracle, and Siebel. That reinforces the sense that I am in the right place.
ITSMA:What happens when people click through to the providers’ sites?
Hotchkiss: When they click through to your site, you have to give them the sense that you are the best store in the mall, because we rarely click through to a site and remain there. There is a lot of what we call pogo sticking on the search engine. We click through, we take a quick look, and then we pop back to the search results page and check something else.
ITSMA:How should you set up your landing page to dissuade people from bouncing back to the search engine?
Hotchkiss: Well, you have to understand where in the buying cycle people might be using search. Earlier in the buying cycle, people are exploring their alternatives. You need to match the buyer’s intent by giving them alternatives. So if you go to Dell’s enterprise server page, for example, you’ll see a range of different types of servers and you’ll be able to check prices, which is another key component. You need to know what the pricing range is going to be.
ITSMA:Do you recommend that providers feature their competitors’ products on their pages as well as their own?
Hotchkiss: Absolutely. Marketers get very territorial about their sites. But when you think about it from the customers’ perspective, that’s what they are looking for. Understand that buyers are going to compare alternatives. They would probably be fired if they didn’t. So understanding that that’s going to happen anyway, doesn’t it make much more sense for that research to happen as much as possible in your space, where you can control the messaging, control the brand awareness, and get into the position of being the wired vendor?
ITSMA:Sounds dangerous.
Hotchkiss: Yes. If you go down this road, you have to be authentic about it because people can pick up something that’s not authentic a mile away. This can’t be one of those typical comparison charts where you say, “Oh, look we have checkmarks in all our boxes and our competitors don’t have any in theirs.”
But if you are honest and you say, “Look, this is where our stuff shines and here’s maybe where we don’t stack up so well,” you will gain a lot of credibility and hang onto search visitors better.
But that’s an incredible leap of courage from most marketers. It’s completely against everything they have learned in traditional marketing, and that’s the problem. Traditional marketing rules don’t apply in a new consumer-empowered marketplace. The rules have changed. It’s just that many marketers are slow to realize that the power now rests with the buyer, not them.
ITSMA members will receive more specific search marketing advice from Gord Hotchkiss in an upcoming Viewpoint and on Chris Koch’s blog (http://chriskoch.wordpress.com).
On
the Job
Scaling Customer Advisory Boards Without Breaking the Bank
Cisco has used customer advisory boards to test and refine its future product and services strategies since its founding in 1984. But until recently the boards were a victim of Cisco’s success. The company’s rapid growth and a culture of highly independent business units meant that any business unit could initiate meetings with customers without reviewing the membership or charter of existing Cisco forums.
When Independence Goes Too Far
The result was a lack of coordination and a duplication of effort. Events were irregularly scheduled, infrequently documented, and inconsistently managed. “Many of the business units hired outside agencies to handle the events and strategy for them, which meant that there was very little consistency,” says Nicole Siegal, manager of operations and events for Cisco. Follow-up with customers was irregular. Since business units did not coordinate with one another, Cisco customers sometimes received mixed messages—even contradictory product information.
Some customers had representatives on multiple boards, preventing Cisco from reaching its maximum market penetration. Not surprisingly, there were no metrics in place to assess the per-company penetration and no standardized means for measuring success or reporting results.
When customers arrived at various board events, inconsistencies were often apparent. Event signage, transportation, meeting materials, standard audio and visual equipment, and on-site registration might or might not have been provided. Registration techniques and communications with customers about event agendas and logistics were managed via impromptu spreadsheets, bulk emails, phone messages, and costly event-specific Websites. The customer experience was inconsistent across multiple board events and didn’t leave customers with good impressions.
Balancing Creativity with Efficiency
A natural reaction to this fragmentation would be to centralize the management of the boards. Yet any attempts to centralize could be perceived as attempts by corporate to stultify a series of independent communications channels. If the existing structure were to be changed, it needed to be done carefully.
In 2003, the Cisco corporate marketing team launched an initiative to consolidate all existing boards under a centrally managed Cisco Advisory Board (CAB) umbrella. The first step was to define which functions should be managed centrally and which should be managed by individual business units.
Coming to a consensus with 18 business units, each with its own board program manager, was critical to the success of the initiative. According to Siegal, the key selling point that emerged was that centralized administration would free the program managers to do what provided the greatest value to Cisco: develop and manage the content/subject matter for their boards. “We said, anything that’s completely unique to the managers’ specific business units, they should keep,” says Siegal.
Anything beyond that became a candidate for centralizing and outsourcing. For example, the corporate marketing team began negotiating contracts for logistics management on behalf of all the boards. A single vendor now manages hotel, food and beverage, Website registration, on-site registration, and transportation requirements. Nonlogistical management decisions are facilitated by members of Siegal’s team.
Another example of increased efficiency and consistency was the consolidation of the different board Websites onto a single platform. Each board still retains control over its Web page content, which has individual logins for event participants so that they see only that particular board’s page. After each event, presentations, plans, summaries, and a user discussion forum are made available to attendees via the CAB Web portal.
The New Strategy
The CABs’ new federated governance structure gives the business units the freedom to pursue their own agendas with customers while taking advantage of the economies of scale that come with centralized event administration and metrics reporting.
The centralized management means that new boards can be created or eliminated based on market requirements rather than the whims of a particular business unit. Some boards address specific market segments (global customers, security, and channel partners, for example), whereas others are tied to specific practices within Cisco (services, partners, service providers, and others).
The CABs all work under the same overarching principles. Customer steering committees help define the agendas. Each committee has a review process for presentations, to ensure quality and relevancy.
When meetings begin, participants know what to expect: access to their peers, follow-ups from previous meetings, exposure to unreleased products and programs, reviews of Cisco strategy, and the promise of an evaluation of and response to their ideas. Meanwhile, Cisco expects vocal, direct input and consistent participation.
Brief presentations are given by Cisco executives, product managers, and other key decision makers who want to gauge market interest for new programs and products, discuss new initiatives within Cisco, or provide updates on focus areas considered at previous meetings. The goal is for Cisco to listen 80% of the time and to present 20% of the time. For example, after presenting ideas and gathering feedback, presenters come back at the end of the event to validate the concerns of their audience.
The ROI
Surveys are a crucial part of the program. CAB managers agree on a standard set of questions submitted to all boards to gauge the progress of the program as a whole. In addition, board managers have the freedom to create customized questions for their particular audiences to see whether specific board goals are being met.
The results from the standardized questions show that customers like the new structure; satisfaction has improved each year since 2005. Meanwhile, the efficiencies of centralizing and outsourcing event administration have allowed Cisco to almost double the number of formal customer-facing meetings in the past three years while reducing per-event costs. Cost savings in the first year of CAB consolidation were in excess of $1 million, according to Cisco.
Account-Based Marketing (ABM) is primarily used to make good relationships even better—the second honeymoon of an already solid marriage. By treating ABM accounts as essentially markets of one—developing a deep understanding of customers’ business issues and forging close relationships with their people—companies can win more incremental revenue and become preferred providers.
However, fewer companies have tried to use ABM to win the hearts of customers that belong to others. Is it a relevant strategy for winning new business? Indeed, this was the prime focus of ITSMA’s recent ABM workshop in London.
Make the Right Choice from the Start
The biggest benefit of ABM in this context is understanding what you are getting into—perhaps the most critical element of any relationship. The benefits to be gained from an ABM-style approach to researching potential customers and their wants and needs should not be underestimated. The account selection process at the core of ITSMA’s ABM methodology reveals the attributes that determine whether customers will have true long-term value.
All too often companies choose new accounts based on the potential revenue the sales manager believes they can generate and how desperate the organisation is to break into that “must have” account. Little thought is given to other elements such as the cultural fit of your organisations the potential competitive strength of your organisation within the prospect, and any previous experience either side may have of the other. Using the ABM approach, you take away some of the subjectivity by using tools to objectively score and rank potential targets, leading to prioritisation.
Reveal the True Customer Requirements
The research stage of ABM is particularly valuable in penetrating new accounts. Only by carrying out this in-depth research of the organisation, its competitors, and the market in which it is operating can you begin to understand the true requirements of the prospect and begin to formulate appropriate plays or propositions to help you open the door. The formalised approach to the research stage presented in the ABM methodology allows you to improve your potential position with prospects via thorough profiling and a deep understanding of what drives their businesses.
Avoid Wasted Effort
ABM requires that your internal stakeholders all agree that the selected accounts have real value. This does not mean merely all salespeople, but stakeholders within various functions and at various levels within your organisation. By obtaining this buy-in at the early stages, you can be assured that everyone acknowledges the potential of the prospect and therefore is more likely to assign the necessary resource and provide the necessary support, making success at the steps that follow considerably more achievable.
Clearly there are areas of the ABM methodology that are not feasible when you’re trying to enter a new account, such as customer engagement at the research stage and verification with the customer through the scenario planning stage. But there remain major benefits for following this methodology, not the least being account selection, gaining internal buy-in, and the knowledge generated through the research stage.
Are you using ABM to penetrate new accounts? Let us know by emailing Chris Koch at ckoch@itsma.com.
Research Desk
Ask ITSMA: How Many Demand-Generation Campaigns?
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.
Is there a rule of thumb about how many demand-generation campaigns you should run concurrently and over the course of a year?
The short answer is to launch one new major campaign per quarter. For larger companies, that means the global horizontal and vertical marketing groups develop the overall content and the geographies/local offices customize and apply them to the local market.
It also helps to clarify with the various marketing groups what you mean by a campaign. Many individuals equate a campaign with a single activity, such as writing a white paper, for example. But an activity is not a campaign. A campaign is a coordinated strategy across multiple channels with a clear business goal.
Now, just because you are only launching four new campaigns per year doesn’t mean that you should necessarily abandon campaigns that have worked in the past. Campaigns can have legs for years or they can fizzle immediately. Four is a target to keep the marketing mix fresh. Each fiscal year, work with marketing and senior management to identify four focus areas/topics on which to build major campaigns.
However, flexibility is critical. Big, unexpected things happen in the market (Hurricane Katrina, strikes, wars, dock lockouts, economic issues, regulations, etc.). You need to be able to mount campaigns swiftly to ride those waves. That’s what the market and media are buzzing about, so you’d better be responsive and hold on for the ride. In this case, consider putting a less time-sensitive campaign on the back burner so you can focus on the issue at hand.
Do you have a services marketing question? Visit Ask ITSMA to access
our experience, insight, and research results.
Recently Published ITSMA Thought Leadership
The Software Gap: How Emerging Generations and Markets Will Impact Marketers—An Interview with Bruce Richardson
Bruce Richardson, Chief Research Officer at AMR Research, has been studying the software industry for over 20 years. His latest passion is talking about how deeply the software market will be transformed by the emergence of technology-native generations and new global markets. In this Viewpoint, Bruce shares his thoughts on what exactly will be different and gives some examples of how some companies are already embracing these changes.
In this Online Briefing, marketing veteran Jeff Sands shares the latest ITSMA research and his many years of accumulated wisdom on the key issues involved in finding and keeping new customers, including understanding the processes your customers and prospects use to select their services and solutions providers and picking the sales enablement tools that are most effective at supporting the new account acquisition process.
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. Learn more at http://www.itsma.com/News/mea/default.htm.
Sometimes, the grass really is greener on the other side. As B2B marketers we can get so caught up in the particular issues of our vertical that we forget that there can be other ways to reach customers. The unique customer requirements in other verticals create sparks that can lead to true marketing differentiation when applied in B2B.
For example, the gnat-like attention spans of teenagers have led marketers in consumer apparel and footwear to create marketing programs that are essentially subscription services that keep the kids coming back—and make them brand loyal. This online briefing will look at this and other verticals beyond technology to discover tools and techniques to help us all improve.
Making Marketing "Atomically Global": How the "Flat World" Is Changing the Way Marketing Is Organized and Managed
The Role of the Brand in Shaping Customer Experience
Inner Circle Meeting: By Invitation Only for Executive Sponsors June 24, 2008, London, U.K.
Pump It Up: Generating Increased Demand for Services and Solutions
Briefing June 24, 2008, Boston, MA Free for ITSMA members
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