The Science of Marketing

Last week, I wrote about some basics of marketing strategy, and how segmentation, positioning and differentiation can improve the sales effort.  The comment that followed that post, from Ardath Albee of Marketing Interactions, got me thinking that I should be writing a bit more on the implementation of marketing strategy, especially in the tools and tactics we use most.  Since there are so many combinations of strategies and tactics, the Strategy in Action theme will probably take awhile to cover, so watch for the series to continue in future posts.  For now I’ll begin with segmentation on the web - how understanding and playing to our key audiences can make for more effective web marketing. 

In the B2B world, segmentation is a two-step process.  The first step is understanding the types of companies to which you are selling.  Are they large corporations or small businesses, what industries are they in, where are they located?  Once you come up with a profile (or more likely, several profiles) of the types of companies you are targeting, it is also important to segment the people inside of these companies who represent your audience.  This is often done by job title alone, but it is important to remember that we’re talking about people here, so it’s not a bad idea to note their age group, gender, education level and other personal details to the best of your ability.  We cover market segmentation in several other posts, so feel free to check them out here.  It’s also important to note that the other facets of marketing strategy - particularly positioning and differentiation - must also come into play on the web, but for now we’ll look at segmentation in a vacuum.

Self Identification

To me, the most important way that segmentation influences web marketing lies in how you structure your web site.  Companies such as Dell address different segments through self identification on their home page - asking users to specify whether they are looking for products for their home, office or data center.  Once a visitor selects a category, Dell’s web site presents only the products and promotions that appeal to their particular segment.  Pretty straightforward.  But this type of self identification breaks down as more and more visitors skip the home page and navigate directly to their content using a search engine.  For example, Google searches for "Dell laptop" and "Dell desktop" led me to product pages that offer home computers and back to school specials.  Not exactly what an enterprise IT manager is looking for.

Landing Page Optimization

To ensure that visitors can easily find the content that is right for their segment - even when entering through a search engine - try combining self identification with landing page optimization - creating "mini home pages" called landing pages for different segments, and owning the most popular search terms to funnel users to the content they seek.  Cisco has become a master of this technique, as a recent search for "Cisco router" shows.  By clicking the top result for that search, I was brought to a Cisco landing page that included the company’s top line message for their router line, a section on router basics, and simple, well organized product links for their branch, WAN, and service provider routers.  There is a bit of segmentation in each of these categories, and the rest is handled through tailored messages on the individual product pages.  Cisco’s approach allows the company to talk to each segment individually, while quickly getting users to the right content.

Content Creation

Beyond structure, segmentation comes into play on the web through the content itself.  By understanding who you’re writing for, you can improve the relevance of your content and tailor calls to action for different audiences.  Once a web site is structured to bring each segment to its own unique place, you can organize and present content that engages each audience on their own terms.  This is where it helps to understand not only the types of companies, but the types of people to whom you’re talking.

As I type and type, I realize I could probably go on all day about segmentation on the web.  But there’s work to do, and golf balls to lose, so for now, I’ll toss it back to you to tell me what I left out.

OK, this may not be the kind of post that you print off and bring on vacation, but summer isn’t just about the light reading we stuff into our beach bags.  It’s also a good time to take a deep breath and ponder some heavy stuff.  With that in mind, what follows is some summer reading on how a good marketing strategy can directly improve a high tech company’s sales effort. 

While many professionals view marketing strategy as the groundwork for outbound communications activities such as public relations, advertising and web programs, it also has a tremendous impact on increasing sales productivity. High tech companies often allocate the majority of their budgets to product and technology development, leaving sales and the other departments to fight for what’s left. With a limited budget and a relatively small headcount, the sales force must be extremely efficient in identifying, cultivating and converting leads – focusing on the markets and customers with the highest probabilities of success, presenting their products in a way that solves real business problems and promoting their strengths and managing their weaknesses in the face of competition.

Segmentation

Given the luxury of an infinite sales force and a limitless sales budget, most entrepreneurs would love to sell their products to every customer in every market. Faced with the reality of limited sales resources, however, the wise entrepreneur knows that the key to achieving the company’s sales goal is focus. Conducting a thorough market segmentation exercise helps focus the sales effort on the markets, customers and applications that present the highest probability of success in the shortest amount of time. While pursuing fewer prospects may seem counter-intuitive to achieving an aggressive sales goal, going after the right prospects will decrease time spent in futile meetings and allow more time for closing quality deals.

Positioning

Closing quality deals means having quality conversations. In the high tech world, sales meetings often revolve around deep technology discussions with technology evaluators rather than business conversations with the real decision makers. While it is important to tell a compelling technology story to the people that will eventually be implementing your product, achieving an aggressive sales goal requires an understanding of where the business problems reside, who is responsible for solving them and how your solution can improve your customer’s business. Doing so means analyzing the buying cycle that your prospects go through as they uncover a problem, research solutions, evaluate products and plan for implementation; then identifying the stakeholders that play a role in each phase and understanding their specific business concerns. By positioning your product in the context of the customer’s business concerns, you can increase your odds of being selected by ensuring that your messages and value proposition resonate not only with technical audiences, but with the business decision makers that are actually empowered to buy your products.

Differentiation

Even with a well positioned solution, your prospects will undoubtedly seek out both direct competitors and alternative solutions to your product. Achieving your aggressive sales goal demands the ability to consistently win business at the expense of the competition, and doing so means being able to differentiate your product. Differentiation provides a foundation to promote the strengths and manage the weaknesses of your product against the competition, outfitting your sales force with the information they need to proactively frame discussions with prospects in the most advantageous ways, and overcome objections that might otherwise cost your company a sale.

This summer, when you think about how to improve your sales effort, think about this: how can a solid marketing strategy help your sales team?  I’d suggest that segmentation improves focus, positioning produces a compelling value proposition, and differentiation helps overcome competitive forces. Let me know if you disagree or if I’ve left anything out.

In April, I wrote a blog post on pricing microviews. The post discussed some University of Florida research that discovered consumers think of value in the least significant digit of price. The conclusion was that the more precisely an item is priced, the more likely a seller will realize what he or she is asking.

As a follow-up to this blog post, I’ll share some information on pricing anchors that I recently Stumbled Upon.

A blog post by Ankesh Kothari discusses the use of pricing anchors to persuade consumers to make a desired purchase decision. There are three anchor examples in the post (and it is worth the read), but I’ll only focus on one here.

According to Kothari’s blog, The Economist magazine offered three subscription choices: $59 web only, $125 print only, and $125 print and web. David Airey, a behavioral economist, was puzzled and decided to discover why The Economist offered two options at the same price. Airey found that if the print only option was removed the majority of a test group chose the lower priced, web only option. With the print only option in play, most of the same group went for the higher priced, print and web option.

Airey concluded that the print only option was offered to sell the higher priced, print and web option.

With a little forethought and purpose, consumers’ choices can be managed with the right pricing anchors. Thanks, Ankesh, for a great post.

How have you used pricing anchors to manage buying decisions?

Every now and then, it’s fun to take a walk down memory lane.  So today, I logged into Google Analytics and punched up the content page to find out what our ten most popular posts are.  I was surprised at how diverse the list is, ranging from the very tactical to the very strategic, and covering just about every topic we’ve ever written about.  I’m glad to see that our readers enjoy variety, so we’ll continue to mix things up.  If there’s anything you’d like us to write about, please comment below or send us an e-mail - we’d love to hear from you.

With that, Our Ten Most Popular Posts: 

1. Internal Communications: Own It
2. The Blogosphere: You Don’t Have to Blog to Belong
3. Mission Statement: Make it Possible
4. Slogans: Say What You Do
5. Market Segmentation: How to Prioritize Targets
6. High Tech Blogging: Why?
7. Lead Generation: The Bell Curve
8. Communications Part II: To the Right People
9. Age of Conversation 2: The Deadline
10. The SEO Triple Play: Message, Mechanics, Maintenance

Once a company has segmented its target markets and positioned itself in context of the business issues and market requirements its customers care about, it is important to conduct a differentiation exercise to examine how its offerings stack up to those of its chief competitors. Understanding a company’s differentiation means knowing the areas in which it excels, as well as those where it may be vulnerable against a particular competitor. Armed with this information, the company can be prepared to attack its competitors’ weaknesses, while defending against their strengths.

Read the rest of this entry »

In a recent post, Ardath Albee describes how to score leads based on activity (e.g., download a white paper, web activity). This is an important part of database marketing and gives your sales and marketing team actionable intelligence on what products and services are of most interest to potential customers. In the world of high tech, where you often have a new technology, a large target list, and little activity intel, how to you prioritize your target list to make efficient use of a finite sales resource? Enter the Opportunity Index - a methodology to effectively segment a market with measurable attributes that best match prospects’ needs with a company’s solution.

Read the rest of this entry »

As a follow up to "Communications Part I", this blog entry extends "consistently saying the right things" to "consistently saying the right things to the right people". The ideas articulated in the messaging framework stem from a company’s segmentation (the specific markets a company is targeting), positioning (how the company meets the needs of the market), and differentiation (the features a company wants to promote and those it needs to defend against in light of the competition). However this is only half the story. A messaging framework is just that- a framework, and to be useful, it must be tailored to specific audiences, each with its own agenda and point of view.

Read the rest of this entry »

Aaron Ross of Build a Sales Machine blog fame, wrote an insightful post, "The Fatal Mistake Boards & VP Sales Will Make in 2008 Planning", a couple of days ago. In this post he contends that hiring more sales people will not help you hit your revenue bogey, mainly because sales guys are not good prospectors and don’t necessarily help grow the pipeline. I agree - good sales people are farmers, not hunters. It is up to marketing to find the fertile lands for sales to farm. This hunting should be accomplished with data and a scientific approach to market segmentation.

Read the rest of this entry »