The Science of Marketing

Ask any author and I’m sure he’ll tell you - it’s not easy giving birth to a book.  Now multiply that by 237 and you’ve got The Age of Conversation 2: Why Don’t They Get It.  Throughout the monumental task of finding all these authors, getting their releases signed, chasing down their chapters, editing their work and weaving it all together; Gavin Heaton and Drew McLellan have made it look easy.  And now, about nine months after kicking off this project, I’m told that Gavin and Drew are going into ‘ahem’ labor and putting the finishing touches on the book.  We even have a due date - October 25!

Goofy puns aside, this effort really is about the children, with proceeds from the book benefitting Variety: The Children’s Charity- an international organization dedicated to improving the lives of children around the world.  The first edition of The Age Of Conversation raised well over $11,000 for this worthwhile cause.  This year, we’ll look to do even better.

I know this process is a ton of work for Gavin and Drew, but it’s a labor of love and they’re doing a great job.  Hats off to them for all their hard work.  I’m really rooking forward to the special delivery (from Amazon) next month.  In the meantime - would someone please go get some ice chips - stat?

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I love looking at Google Analytics.  I do it every day for both this blog and our corporate web site looking for patterns, insights and clues to help increase eyeballs and hopefully business. One of the areas that I focus on is referring sites - how visitors got to our web site.  For each referring site (including direct links), Google Analytics lists visits, pages/visit, average time on site and bounce rate (percentage of visitors that exit on the same page they enter). Here’s some statistics and observations for our corporate web site from the beginning of the year until now.

Visits

• 39% - direct link (someone typed our URL into the browser)
• 35% - search engines
• 26% - other referring sites
• Of the other referring sites, 9% were from this blog and 5% were from LinkedIn.

Pages Per Visit

• 6 - direct link
• 4 - this blog and LinkedIn
• 3 - search engines

Average Time on Site

• 7:45 - direct link
• 3:01 - this blog
• 2:33 - LinkedIn
• 1:47 - search engines

Bounce Rate

• 23% - LinkedIn
• 38% - direct link
• 44% - this blog
• 53% - search engines

The conclusion is that social networking sites:

• Generate additional visitors
• Produce quality visits (more time on the site, more pages per visit, lower bounce rate) as compared to search engines

So, why not beef up your social networking efforts?

Here’s a follow-up to a post I wrote in late August.  You remember - the one about marketing communications activities that happen in sequential stages to be most effective.  Since then, I’ve been talking to peers and keeping an eye on the blogosphere to get a feel for how others feel about a phased approach to marketing communications.  The result: it seems that the days of trying to do too much with a single tool or program are quickly coming to an end. 

Most marketers are no longer swinging for the fences with marketing communications - they are thinking through their marketing goals and mapping out phased communications strategies that get them there over time.  They are walking before they run, dating before they marry, and establishing a dialogue  before they sell.  Here are a few examples of progressive thinking in the area of marketing phases:

Marketing Experiments Blog: Writing Headlines that Don’t Sell — But Get Much Higher Conversions

Startup Hustle: Acquiring, Engaging, Retaining and Monetizing Your Customers

Marketing Interactions: B2B Websites Need to Focus on the Long Term

Drew’s Marketing Minute: Are You Expecting too Much From your Marketing?

I’m a big believer in marketing programs that don’t sell or try to do too much, but instead happen in phases and focus on long-term success.  I’m glad to see that others agree.  What do you think?

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?

Almost every comedian starts off by asking something like, "I’m from Chicago. How many here are from Chicago?"

The comedian is making a connection with members of the audience before launching into his act. By making this connection, the audience will be more receptive to what follows (and more likely to laugh).

This technique also works in the world of B2B communications. I first heard of this idea in a seminar by Kare Anderson. She said to start a conversation with "something about you, something about me, something about us". Like the comedian, you can instantly form a bond with a common interest and increase the chances that the person on the other end of the conversation will engage. I have used what Kare told me quite successfully over the years with media, analysts, customer and partners.

Do some homework, make some guesses or just probe areas to connect with people, such as…

• Geography
• Sports
• Hobbies
• Educational background
• (Stay away from politics and religion)

And start conversations with common interests.

It is a fact of life that people are more receptive to those who they have something in common with. So, don’t worry about getting right down to business, connect on some other, non-business, level and your conversations will be much more meaningful.

Now, how ’bout those Tampa Bay Rays?

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.

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.