The Science of Marketing

In January, we wrote a post, "Getting The Brand Together: Consistency", which discussed brand promises - that what you say better be what you do.   Well, to do this you need to sit down and think hard about what it is you do and how to reflect that in your brand.  Consumer product companies have institutionalized this process.  High tech B2B companies to a less extent and high tech B2B start-ups not so much.

In the beginning, the usual process with a high tech start-up is: start a company, get a creative designer to design a logo, pick some colors and fonts.  Sometime later, messaging is developed.  So, the look and feel (visual brand) and the language (verbal brand) of the company are disjoint and possibly out of sync.  With so many companies vying for your audience’s attention these days, consistency is critical - so it is critical that the visual and verbal brand act as one.

There are three main concepts to think about when architecting an integrated brand.

1. The Word - Think about what your company does.  What word does it bring to mind?  Now, how can you get your brand to look like this word?
2. The Core Values - Think about how your company does what it does.  What values does it bring to the market.  Now, how can you add flavor to your brand that reflects these core values?
3. The Market - Think about your competitors, partners and customers.  What do their brands look and sound like?  Now, how can your brand stand out while fitting in?

By approaching your brand development in this structured way, you are more likely to have a tighter bond between what you say and what you look like.

One of my favorite marketing books is The 22 Immutable Laws of Marketing: Violate Them at Your Own Risk (Al Ries, Jack Trout).  Each chapter is a few pages, gets right to the point and gives a real-life example.  It’s easy to pick up and put down without forgetting what you’ve read before. My favorite law is #13: The Law of Sacrifice.

You have to give up something in order to get something.

Ries and Trout point out that there are three things you can sacrifice: product line, target market and constant change.  They give several examples of companies (Fedex, Smucker’s, Staples and others) that sacrificed one of these three things to increase revenue, improve margin and gain market share.

I think there is something to be learned here for high tech start-ups.

High tech companies are almost always started by engineers; and engineers can do anything - and often do.  Most of the technology that high techs introduce to the world could be applied to a number of problems.  And, it probably can.  So, what usually happens is the it-can-do anything technology is thrown at the wall like spaghetti to see what sticks.  The spaghetti approach, while perfectly understandable, can cause problems:  lack of focus, unfinished products and features, employee chaos and market confusion.  While the first three are internal challenges that can be sorted internally, once the market is confused it is hard to unconfuse it. So, while it’s OK to have long term vision and a five year road map; make some sacrifices in your outbound communications and make sure your messaging is simple, consistent and focused on one (or a small set of) problems and markets.   If you tell the world that you do it all, you probably won’t be believed. What have you sacrificed lately?

There are two granite compasses in my backyard.  One is aligned with true north; the other is aligned with magnetic north: 15° west of true north.  This summer someone asked me "why? who cares?"  Well, someone using a map to hike from here to there would care about the magnetic north compass and someone drawing a map would care about the true north compass.  Same thing, positioned two different ways for two different audiences.  This concept holds true for B2B marketing: the same companies, products and services must be positioned differently for different audiences.  This is especially true in the high tech B2B world where there are multiple audiences with diverse issues in the middle of the buying cycle.

Positioning and differentiation (more on this next week) are the two foundations on which messaging is built.  But, many high tech B2B companies often rush to develop messaging without mapping out positioning and, as a result, may ignore key audiences.  To avoid this, start positioning by identifying the key audiences involved in the buying decision.  In the high tech B2B, these audiences can be broken down into four broad categories:

• Technology evaluation - what does this do better than what we have?
• Operations management - how will it fit into my current environment?
• Business decision - will this help me make or save money?
• Risk assessment - will this company be around in a year?

Positioning should be thought of in terms of these audiences.  Remember many of these audiences have the same concerns, although their level of interest may vary for each issue.

The best way to pull the positioning together and document it is to map out a  positioning matrix as below.

This matrix gives a quick and easy read of three positioning statements, their supporting benefits and enabling product or service features correlated with the level of interest for each audience (H = High Interest, M = Medium Interest, L = Low Interest).  Beyond developing messaging, the matrix can be used by a company’s entire ecosystem for a basis of relevant and consistent outbound communications, whether it’s a piece of collateral or a personal conversation.

Could a little thought and a positioning matrix help your communications efforts?

I miss driving stick.  Revving the engine at a stoplight, dropping into gear and hearing the tires chirp, downshifting into a sharp curve.  Exciting stuff, especially with the right car.  But beyond the thrill of it all, there’s also something rewarding about working through the progression of gears that reminds me of well oiled marketing communications machine.

Much like a 5-speed transmission, marketing communications activities need to work in sequential stages to be effective, especially with more strategic sales.  Take, for example, a developer of enterprise-wide security solutions, where there are many stages in the buying cycle and several stakeholders involved in the purchase decision.  Customers for this type of solution aren’t going to a website, downloading a free trial and installing it.  They’re writing RFPs, kicking tires, calling in technical experts and getting their finance department involved.  Marketing communications for these high touch sales doesn’t begin in 5th gear - you can’t post a web site and expect a thousand people to click "Buy it Now".

It all comes down to understanding the buying cycle in a given market, looking at the stakeholders and learning about their chief concerns.  Think about first gear - where prospective customers begin the process of evaluating new products - and implement programs that position your solution as a viable option.  In second gear, when technology evaluators begin putting competitive products to the test, be sure your communications activities differentiate you.  Rolling into third gear, a business level audience may get involved, so you must be able to demonstrate how your product can improve the bottom line.  Fourth gear may target an operational team tasked with figuring out how your solution will impact existing systems and processes; so build some tools that demonstrate simplicity and integration.  And in fifth, when last minute considerations can derail a sale, be sure you have the information and materials you need to manage objections.

While audiences, tactics, and messages will vary, the approach holds up to any complex sale.  Phase your communications efforts to mesh with what’s going on in the buying cycle.  Those who try to close a strategic sale in first gear will find themselves spinning their wheels. 

Drew McLellan recently wrote about expecting too much from your marketing, concluding that "marketing takes time, repetition, and patience."  So true, and to that, I’d add a progression that jibes with the buying cycle.  What would you add?

Setting price in the high tech marketplace, where solutions are new and value is not clear, is always a challenge. And I’m often asked, "how should we price this thing?" Well, I have to admit that I am far from being a leading expert in this area. But, I have had the opportunity to work with some very good product and financial managers who are experts. So, I asked them. Below are some snippets of what (I think) I heard, most of which were advice on how to get to pricing.

To be clear, I’m not talking about consumer products here. These people work in high volumes, sell to a multitude of consumers, and probably live and die thinking about pricing. I’m talking about high tech B2B, where the sales cycles are long, the customers are usually few and the price tags are always large.

Market Position

• If you are not the best, you have to be the lowest priced.
• You can get a 5% premium if you are the best with not more than three or four competitors.
• If you are trying to break into a new market, you probably have to undercut the competition or "give away the handle to sell the blade".

Competitive Offerings

• Know what your competitors are pricing for similar features and functionality. (Note: often times I hear "we have no direct competition", so think of competition as who loses if you win.)

Deal Analysis

• Always review each lost deal to see if you lost on price.
• Always review each won deal to see if you won too easily.

Value Selling

• In high tech oligopsonies (for all you MBAs), it is critical to build relationships at all levels (see Buying Cycle: In Their Shoes) in order to sell value to individual stakeholders.
• And above all, sell on value rather than cost plus. This means that you have to work hard at articulating and testing your value proposition (and constantly repeat the process).

So, there is no clear answers when pricing game-changing technologies, products and services, but rather different methods and processes of navigating the waters.

Do you agree or disagree with any of this advice? Can you share something that worked for you?

The marketing consulting firm I work for sends out an e-newsletter, Foundations, every month or so to a list of prospects, customers, partners - the usual. A couple of months ago we started a lead feature called "The 1-Second Survey". The idea is to gather market information quickly and painlessly - we ask one question and give four or five possible answers, one of which the reader clicks on (see below). That’s it - done in (less than) one second. No more taking ten or twenty minutes of someone’s valuable time.

We’ve gotten great response, but we also got something that we didn’t expect. Several people have asked us: how do we do it? what tools do we use? Well, it’s really pretty simple and I’ll let everyone in on the "secret".

Start With an E-Mail Marketing Service

We use MailChimp for all our e-mail campaigns. (We’ve tried a few different services and like MC’s ease-of-use and campaign reporting.) Like most e-mail marketing services, MC allows you to embed links and track click-throughs.

Create Landing Pages

Each of the links above goes to a different landing page on our web site. These pages say "thanks for participating" and have links to other pages for more information.

Count the Clicks

MC reports on a wide range of statistics for each campaign (in this case a newsletter). One of these statistics is the number of click-throughs for each link embedded in the e-newsletter. Just tally up the clicks for each link and you have your survey results.

So, that’s the secret of the 1-second survey. It’s just that easy.

Have fun.

I really like Chris Brogan’s latest blog post, "Twelve Ways to Sell Social Media to Your Boss". If you are considering launching a B2B blog or you are getting push back from management about starting a blog, it is well worth the read. Chris’s #1 way to sell is

Social media tools like blogging, social networks, and social bookmarking are more effective in reaching the millions online than a traditional website.

While our web site and blog don’t reach millions, i thought I would look at the Google Analytics data to see just how many people visit each. I went back to December 2007, when we started The Science of Marketing Blog to make the comparison. From December 2007 to the beginning of August 2008, here are the (rounded) visit stats.

ImageArchitects.Net (Web Site) 900

TheScienceOfMarketing.Com (Blog) 3600

Not only are the visits 4:1 in favor of our blog, it should come as no surprise that our blog is the number one referral site to our web site (and number three source behind direct visits and Google searches).

Given that a blog is inexpensive to implement (Chris’s #3 way), why wouldn’t any B2B organization expand the reach of their brand and messages with a blog?

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.

As I was surfing the YouTube the other day, I decided to tune in to the Politician Channel and was surprised at what I saw.

Barack Obama: 1,150 videos and 55M views

John McCain: 219 videos and 4M views

That’s a 5-to-1 difference in number of videos posted and close to a 14-to-1 difference in views.

I’m not trying to wax political (something I would never do in a blog) and I know the whole John-McCain-is-old-doesn’t-use-the-computer-and-hates-bloggers thing, but, with all due respect, what the fig?

There are something like 60M broadband subscribers in the US. Now, knowing that, if you

1.) Needed to get the word out to a large audience

2.) Had a communications tool that hit that audience and was (practically) free

Wouldn’t you take advantage?

Something for us B2B marketers to think hard about. If social networking tools could change the outcome - why not?

I like movies. Actually, I love movies. So it should come as no surprise that I am one of Netflix’s eight and a quarter million subscribers. Two weeks ago, Netflix sent me (and every other subscriber) a hastily written e-mail that announced they were eliminating a feature called "Profiles", which allows multiple members of a household to maintain a separate queue of movies, separate ratings and a separate community of friends - all under a single subscription. For my wife and I, this feature solved the constant struggle between Dirty Harry and When Harry Met Sally - allowing each of us to pick our own movies according to our own tastes. For parents, it also helped keep Dirty Harry away from Harry Potter, I’m sure.

So when Netflix pulled the plug on Profiles, the backlash began, and the blogosphere started spinning fast. Hundreds of bloggers began writing in protest, thousands of readers left comments expressing their dissatisfaction, and soon Netflix’s own blog was barraged by notes from unhappy customers. Oh, and then there’s the Internet petition. The morning after Netflix’s announcement, I added my name at position #482. That night, there were about 1,500. And in a few days, that number doubled.

The happy ending: earlier this week I was pleased to receive another hastily written e-mail from Netflix that began "You spoke, and we listened. We are keeping Profiles." This is an example of how social media is working, not only as a platform that can elevate the voice of the common man, but as a strategic business tool. In this case, blogging helped movie lovers unite and fight back against a corporate giant. But it also helped Netflix by providing invaluable market research about one of their features.

I hope Netflix and other companies take note. Blogs are more than forums for over-caffeinated counter-culture geeks to express their feelings. They are a new way to listen to customers and gain insights into what they want (and what they will buy). For Netflix, the listening should have started before they axed the Profiles feature, but in the end, they did the right thing.

My question is: can blogging be as effective in the business to business world as it is in the consumer market? We think so…what do you think? We’re listening.