Marketing Spin or Market Value?
A couple of weeks ago I was sitting at a seminar next to an independent consultant. He was telling me about some new initiatives from Cisco around monitoring and controlling computer devices. The first example involved automatically turning all the phones & computers off in a call center when they are not in use in order to save energy. The idea being if it was a two shift operation, the devices could be automatically turned off for the idle third shift. The second scenario was putting RFID tags on newborn babies. If the baby left their room without authorization, the hospital elevators and doors would lock automatically, and the hospital would ensure the infant was not abducted.
After explaining these with much enthusiasm he said, “I do not know if there is any real value in these, but Cisco is a marketing machine, so we believe we can make some good money.”
Without debating the value of the initiatives, it made me wonder: How much success is inherent value versus pure spin marketing? Obviously on the strategic side of marketing the whole objective is to find new markets and deliver value, but fundamentally there has to be some core value. No question spin marketing can accelerate the success or even ensure it gets a strong enough foothold, but if there is not enough core value, the marketing efforts will be expensive and time consuming.
Treasure Hunt – Marketing & Sales Diagnostic Map
I recently participated in a couple of value mapping sessions with the VP of Sales and our teams. What struck me is that in the blog world is a lot of commentary of alignment between sales and marketing on lead generation (or demand generation as purist would say.) However, the art of synchronizing the value proposition, and how is gets tailored for a specific customer is a lot more challenging. What are true values that customers buy into, and how does a sales person in a complex B2B sale navigate and figure out which value points to highlight and focus on? Of course there are many books on complex sales, value based selling, etc. The gap I see is where does marketing end versus the point where sales pick up?
Conceptually I like the concept of a marketing diagnostic map as shown here. This is a very generic map that can apply to any B2B technology solution. It needs to be customized as outlined below.
The map captures the value fit of a product for a particular market segment. The general idea is the value zone represents the major potential areas that sales needs to align with a customers pains to drive a deal. That is starting with the end in mind, how do we get there, who does what? Let’s start in the middle and at the beginning of the process
Core Qualifiers: These are fundamental attributes that define the market segments. For examples industry, company size, geography, buyer’s title, and department, etc. Perhaps this may include ERP type, etc. This is marketing’s job to define these broader based demand generation takes this as input to the who are we trying to reach.
Pain Zone: The pain zone, as the name implies identifies the potential pains you can solve for the market segment you are targeting. Examples, would include fragmented IT systems, poor visibility to spend, customer service issues, etc.
Value Zone: This represents that concrete value points that any prospect in the target market segment could potentially get from your solution.
Note I have been careful to say potential since I would suggest it is marketing’s job to ensure sales knows what the pains and value options are, also perhaps some navigation on sub-segments where pain/value might be greater. For example if the overall market is manufacturing, one specific pain/value might be more acute in high tech companies that run Oracle. Now it is sales job to navigate the map, and identify the customer specific value and associated pain.
One final key concept is in the value sectors. For pretty much any B2B solution the value falls into the three sectors identified: Customer Value, Operational Costs, and IT Costs. One could argue IT and Operational Costs should be grouped together, but in my experience within customers usually one or the other (business or IT) has the clout and is driving the bus.
Customer value comes in the form of creating value that increases the top line. This is achieved through new customers, new markets, or better customer service. Operational value delivers profits to the bottom line through business focused savings. I am sure by now you get the IT costs sector.
My experience is products/solutions are typically focused more heavily in one sector.
Now once sales is done they should be able to outline the value for a specific customer as shown here.
Now the most challenging part is to make this operational. I will leave this to another post for a few reasons: (1) there are lots of angles to take; (2) I have not figured it out; (3) I would love some suggestions.
Do You Need a Psychiatrist?
Over the New Year’s holiday I was at a friend’s for dinner and we played a game called “psychiatrist”. It can be quite fun, if a little bit risqué. The game requires at least 7 or 8 people, with one playing the psychiatrist. The person being the shrink cannot have played the game before and here’s why. All the others have the same problem, and it is up to the psychiatrist to find out what that problem is by asking probing and personal questions. The condition that every player has is that they are answering the questions based on they believe person to their right would answer. The final twist is that when someone gets an answer wrong, the person to their right must declare “psychiatrist”, at which point they switch seats. You get the point.
The above game got me thinking about lead qualification and the sales process. Is your sales team wondering around asking diagnostics questions trying to find the pain and compelling event? In today’s world creating a strong differentiated value proposition is just the start. Even developing compelling and consistent messaging is typically best practice. However, these are not enough. What I believe complex sales require is a diagnostics map. A diagnostic map basically provides guidance on where to probe based on the prospects context. The context includes the customers business, vertical, organization, etc. as well as where you are in the sales process.
Do you have any good examples of a diagnostic map?
Messaging Fairy Tale
Recently I was walking through Heathrow airport and was struck by HSBC’s “Different Points of View” campaign. The main point of the campaign is that a simple word or image can mean very different things to people based on culture, context, etc. One example is shown above with a picture of a bridal couple on top of a wedding cake. There are three different versions with the messages: Fear, Fate, Fairy Tale.
It re-enforced how critical messaging and context is to high tech marketing. In this world it is almost always a complex sale, with multiple communications channels (e-mail, phone calls, meetings, formal PowerPoint presentations, etc.), each hitting different roles within the prospect. Although it is obvious the VP of transportation will have different perspective than the director of IT; getting the right message, delivered in the right way can be challenging. How the messages are “packaged” impacts their effectiveness as shown in Malcolm Gladwell’s book Blink.
The following is a starting point to deliver strong messaging:
1) Define the titles and roles you need to reach
2) Based on role what are the most relevant value points
3) What are the best channels to reach these people? In this case channels might be as simple as an e-mail blast or as sophisticated as a complex discovery process.
A core messaging map is a useful internal tool that can be used by marketing communications, sales, business development, product marketing to ensure content and tools for the campaign are aligned. In today’s social marketing world with information overload, the right messaging and context are fundamental.
Getting Around The Leaf
The movie “Bug’s Life” has a great opening scene whereby the ants are all lined up dropping food for the fall “offering” to the grasshoppers. Unfortunately, a leaf drops down and breaks up the line of ants. This causes a panic since the ants are conditioned to follow the soldier in front of them, but now the leaf had broken the line!!
In the last 12 months my team has done a fantastic job creating world class use of salesforce.com and accompanying metrics. Now anyone in sales and marketing can track leads by source, campaign, channel, cost per lead, cost per qualified lead, conversion rate, etc. So what’s this got to do with A Bug’s Life? With metrics comes process. You need processes to ensure leads are distributed properly, process to ensure they are qualified consistently, clear criteria to define when a lead becomes an opportunity, clear definitions on what contributes to the cost of a lead, etc.
Last week one of the people on my marketing team came to me and asked how to route a lead as it did not fit the process. I reviewed the lead information and it seemed clear what to do. What this reminded me is that nothing replaces smart people. Although processes are important and are needed to drive continuous improvement, they can also cause everyone to work at the lowest common denominator. In this case my colleague could not “get around the leaf” – they were hand-cuffed by the process.
Do your processes help or hinder? Can you team get around the leaf?
Everyone is in Marketing
The glory is in sales…especially when the deals are big. Everyone in the company likes to take credit for a big win. Marketing created the lead, engineering added features for the demo, finance drew up new pricing….of course when the deal goes south it is sales fault: he did not sell high enough, she did not understand the decision process, we did not create a compelling event. Having said all this, it is true that most companies and employees are willing and able to help drive sales – we are all in sales…without the quota.
So why don’t people say “We are all in marketing”? Well in fact everyone should think about how they can be in marketing. May areas of the company can be fantastic champions of the message and can be used to amplify success. A couple of examples,
- When a press release is issued – Does your services team use to re-enforce success with customers? Does your sales team use it to nurture prospects drive home a key value proposition?
- When a customer testimonial is created – Does professional services use it to expand their relationship in their accounts? Does business development use it to target stale prospects?
One of marketing’s jobs is to create great content. In today’s world of Linkedn and social media all employees can be supporters of getting the word out.
Sales and Marketing Alignment
Pretty Good
Creating Buzz – Cheap
It is always fun to see clever people in marketing, and new ideas. Google has always been innovative, first with their search technology, how they went public, the list goes on. They create a culture of innovation that permeates beyond technology but into their business, and specifically marketing. Their tradition of adjusting their logo on the search page is a good tactic that re-enforces their creativity. Today’s “moving dots” goes beyond the tradition and has create a ton of buzz and visibility in WSJ.
Getting this buzz is clever and relatively cheap.
Growth – Buying In
This past week we saw a couple of big news stories about technology companies making acquisitions. HP & Dell are battling over 3PAR, and earlier Intel announced a $7.7B acquisition of McAfee. Will these be successful and create additional value? A study by KPMG in 1999 showed that 83% of mergers either created no additional value or actually destroyed value. I am not sure the success rate has increased much since then.
In my career I have been involved in many acquisitions, albeit much smaller, typically in the $10M’s range. My experience is that while acquisitions can be a successful way to enter new markets and grow, executing them successfully can be fun but it is a lot of hard work.
Growth through acquisition can be done with a number of strategies. For example, buying:
- a brand new product to speed time to market with customers you already have.
- a customer base and revenue stream to consolidate market share
- complementary solutions and customer bases which enable cross selling, and bundling products
Depending on the objective, the criteria assessing targets is vastly different. Almost everyone would agree the most critical factor for success is people: culture, organization, and communication. Given executives know this – why are successful acquisitions so hard? I would suggest the main factor is unrealistic expectations. For example,
- The product we are buying only needs 10% more development to take to market
- We can grow their business faster with our sales and marketing
- Customers will migrate to this new platform
- We will be able to leverage common components reducing engineering costs
- Etc.
Sometimes the expectations are not even outlined and employees’ perceived goals are not what management has identified. Accomplishing aggressive growth is typically hard without an acquisition, which is why we call it work. You need the best people, healthy culture and the right organization, but adding unrealistic expectations simply sets you up for failure.
Oxygen – Messaging That Covers Everything
In doing some market research I came across a company description that was completely void of any marketing positioning or differentiation.
XXXXXXX Corporation delivers software and services to companies of all sizes, ranging from small businesses to Global 2000 enterprises, across a number of industries. XXXXXXX’s software solutions automate business critical tasks, ranging from marketing, service and support to planning and scheduling, material requirements planning (MRP), accounting, product configuration, and business intelligence.
What do this really say? We serve all companies, a lot of industries, and we automate critical tasks. We do a lot of good stuff and we can do it for everyone. Who doesn’t need that? Something for everyone, big market. Kinda like everyone needs oxygen. Only problem is oxygen is free.
