The Real Cost of Marketing Automation (Pizza Anyone?)

We had a good number of conversations this week on online marketing and the merits of marketing automation. Within the teams here in Europe and the US, but also with our marketing agency, our through-channel marketing agency, and – last but not least – our marketing automation agency. The latter started with a quote from Forrester Research: “[We] found that most companies cited as great case studies by vendors are still at Level 1 Level 2 of Forrester‘s Marketing Automation Maturity Model.” Some quote.

Expensive email blasters
In a November 2010 blog post, Forrester’s Jeff Ernst – the principal analyst responsible for this particular piece of research – states that “too many companies have invested in marketing automation platforms, only to use them as expensive email blasters.” In the April 2011 report B2B marketers must better prepare for marketing automation, he cautions that “Small businesses with simple requirements can receive a lot of value within days by implementing basic features and may not ever need to do more. But for larger companies that serve sophisticated buyer needs, it takes time to build a revenue engine that produces a steady supply of qualified sales opportunities, and getting an email campaign out the door in three days does not ensure that you are on a path to achieving that bigger vision.”

Amen
Without having access to the actual Marketing Automation Maturity Model – with Sinterklaas and Christmas just around the corner, spending $499 on aging research papers may not be the most opportunistic of choices – one can guess that it’ll start with manually sending emails into low quality, poorly segmented databases, with zero business impact, and end up with nurturing, scoring, integrated communications based on deep knowledge of your buyer’s journey, with all the targeted segmenting, nurturing, scoring and integration between marketing automation and sales CRM that you can wish for – where the marketing system unilaterally sets the business strategy, aligns sales and marketing once and for all, and wins marketing prizes. Amen.

3 Traps
Ernst identifies 3 traps, around process, content, and skills, which keep companies from getting beyond this “batch ‘n’ blast” level of maturity. They’ll never reap the true benefits of marketing automation, but get stuck in the middle between a great vision, sophisticated platform and expert vendor support on the one side, and bloated budgets, frustrated marketers and low quality databases on the other. And the quality of leads generated and qualified by marketing is – and will be – questioned by sales.

KSFs
Ernst indeed warns CMOs (ordinary marketers should pay attention, too) that the following success factors are critical, if they expect ROI from their investment in marketing automation (source: Christine Thompson, Success Factors for Marketing Automation):

• A defined lead management process (agreed to by sales and marketing);
• A content strategy that supports buyers’ needs (not the marketer’s convenience), throughout the buyer’s journey — for each buyer role;
• Access to good contact data (up-to-date contact info for the buyer roles most likely to respond favourably);
• Access to the skills and budget needed to keep the marketing automation platform running smoothly.

Medieval cobblestones
My take: Without these factors in place, buying an advanced marketing automation platform and expect the ill-prepared marketing manager to benefit from it, is like buying a brand new Ferrari F1 race car, give it to a pizza delivery guy in Rome (with fuel and a full, retained pit crew of course), and tell him he’ll deliver pizza’s across town a 1,000 times faster (and much hotter too). All technical reports, all sports analysts, and all Ferrari fans would agree that that’s a terrific investment, because pizza’s are usually cold on delivery, there simply isn’t a better F1 race car around, and the mechanics will make sure it runs to its full capacity. Of course some of the preconditions to use the car proficiently – like a F1 Super License, access to the Autodrome Nationale Monza race track, some level of racing expertise, and a very wealthy sponsor – wouldn’t have made it into the purchase decision conversation. And hence our poor pizza delivery guy races the streets of Rome at 500+ mph, crashes his racehorse into the Fontane di Trevi, all hot pizza’s drown, and the good people of Rome starve, yet again. Stuck in the middle between a great vision and lots of medieval cobblestones.

Must be a hard game
Forrester’s Marketing Automation Maturity Model was first introduced in 2008. 3 years later, even great case study type companies still haven’t been able to make it past levels 1 and 2. You figure it out.

Pizza, anyone?

The P for People

What would you charge to introduce a total stranger to a dear friend?

I’m pondering this question since I stumbled upon the term “transactional social media”, which I understand as “social media with the primary aim of converting non-customers into customers”. “Transactional social media” may sound like a contradiction in terms, like selling hard…. to friends – but that’s exactly where we’re heading. At least that’s what services like Zuberance and NetAffinity seem to suggest, which enable automated social network activation, spot influential preference, drive peer-to-peer (social) recommendation and (business) introduction.

The basic idea here is that a friend’s advice is followed 90 per cent more often than a stranger’s (i.e. seller’s commercial) call-to-action. Which makes sense.

Do you remember the times when Nike and Sony (man, they used to be so cool!) would supply influential teens with free product, just to get to the other members of their peer group? I think they called those tactics “member-get-member”. Those where bedtime stories compared to what we’re about to witness in social space. The opportunity is just too big, fat and juicy; the social data mining technology too readily available and powerful.

It’s about time we marketers (re-)define the 5th marketing P: People (Preference, Psychology). Because more than ever, to get to people, you need to go through people.

In social space, ordinary people can quite easily be turned into resourceful sales reps. It’s just a matter of applying the right triggers, penalties and rewards.

B2B Content Strategy in 5D

A sales guy knows that no two prospects are the same. Hence, no two sales conversations are identical. You know what? You can even have a great sales conversation with some guy on Friday, to be told “bugger off” by that same guy on Monday morning. Some prospects – like other humans - display inconsistent behavior from time to time. Perhaps more so on Monday morning, but that doesn’t change the fact that it’s hard to predict audience behavior.

That’s why content marketing - the art of putting the right content in front of the right audience at the right time through the right vehicles or platforms - can be quite a challenge. What’s right for some prospect, may be very wrong for another. And in business buying situations, you deal with decision makers, influencers, purchasing departments, consultants – it’s not always, or always never, clear who is buying to begin with. So what’s the right audience? Anyway, I wrote about this before.

The good folks over at JESS3 created a Content Marketing infographic on two dimensions. (1) They map content vehicles and assets on the buyer’s journey (Awareness, Consideration, Close), and (2) they recommend the channels through which the content is to be distributed to the target audience (Twitter, website, etc). The result is a pretty great infographic – if social media have revolutionized one more thing on top of just The Way Humans Communicate, it is the genre of the Infographic. If  a picture says more than a thousand words, an infographic conveys more than a thousand metrics… And so much for lousy analogies. Apologies. 

Anyway, though being a great infographic, it’s not granular enough, and as such quite useless in b2b sales situations. To come up with an effective content strategy, b2b marketers need at least 3 more dimensions than the 2 already mentioned above:

1. Customer vs. non customer
2. Decision Maker vs. Influencer
3. Direct sales vs. Indirect sales

Customers and non-customers may receive some of the same assets, but face-to-face time with account management, customer support, and other customers have to be taken into account. Information requirements for decision makers and influencers cannot be compared. And if you do not own the relationship with a target account, the communications setup is entirely different – makes it hard to control the content flow to begin with.

Does that mean that content marketing should be ruled out in b2b environments? No – but marketers will have to spend more time on data management, segmentation and prioritisation. Because it will take an army of marketers, creatives, writers, and producers to cover 5 dimensions, through 3 buyer’s journey phases, times 30 assets. That’s just too many options.

So pick your battles wisely. And allways enjoy your infographics!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Basics of Targeting SMEs

Marketing wisdom: The cost of recruiting a new customer is about 10 times as high as the cost of pursuading an existing customer to buy more. And: The bigger the company, the more money it generally takes to turn them into a customer. Therefore, invest most of your marketing and sales budgets into acquiring small companies with a high potential to grow.

Selling to small companies means: Simple solutions, short sales cycles, easy selling for the channel, low-touch volume business, hockey stick sales – future revenues guaranteed 110%! It’s a no-brainer.

Except for companies that got used to selling to very large corporations. In order for them to be able to sell to small companies, considerable cultural change and financial investment are called for. Product development, sales force, customer support, marketing team, channel infrastructure – the whole thing needs to be refocused. It’s difficult to make things simple and easy. It’s like building a new company, costly in many ways. Not straightforward at all.

And vice versa. Right?

Social Media ROI. Rubbish. It’s free!

It’s hard to be in social media these days and avoid tweets, blog posts and webinars on the Return on Investment of “Social Media”. Apparently, marketers have to be taught how to sell the importance of “Social Media” to their CEOs. And research after research shows that marketers are allocating more and more of their dollars to “Social Media”. They would love to be accountable for that investment.

And that’s a good thing, but let’s be very clear here. Social Media do not take incremental budget. They’re essentially free. That is exactly why so many people, business and civilian, have embrased Social Media wholeheartedly. It doesn’t cost any money.

It’s free to create Twitter and Facebook accounts, launch blogs, build a LinkedIn profile, and attract followers. There is no marketing money involved in browsing the web for relevant communities to contribute to. I won’t raise a Purchase Order to ask a question during a free online seminar, would I?

You just need knowledgeable staff, with some time on their hands, great content for them to share and discuss, and a seasoned community manager with a content strategy in his back pocket.

“Hold on! Stop! Wait a second there! You said it was free, and now you tell me to go hire a seasoned – seasoned! – community manager, for the love of Christ?! And that guy will probably consult with an expensive agency, wouldn’t he? And he will be telling knowledgeable staff on how to behave online, at the risk of distracting them from their real day job?!? You don’t fool me: There is a cost to Social Media after all, and a sizeable one, if you ask me!”

Indeed, that does represent a considerable cost. But can’t you free up that money by sizing down your paid media staff, and investment? You know very well that social media will bring deeper brand connections, more engaged customers, and higher return on sales. Wouldn’t it be a great thing to have the whole company involved in external communications ?

O, and by the way: When was the last time you really, honestly calculated the ROI of your corporate website? Your customer event? Your email newsletter? Your Google AdWords campaign? Admit it: There is a whole host of things that are being taken for granted in marketing and communications, where nobody ever asks for ROI. We do it, because we do it, and don’t think twice about the money we spend.

As to Social Media: You need money to create great content, not to get it out to your target audiences.

It’s true, in marketing and communications, ROI is about the only metric we can bring forth to prove our raison d’etre. If you can’t produce it, you’re being earmarked as just another cost center, a parasite sucking the life out of sales operations and profitability – and you will probably face budget cut after budget cut for the rest of your career in marketing (if you’ll even have any). In Marketing, and even more so in Social Marketing, we need to show the ROI of every step we take.

But you know what: I bet your CEO isn’t even subscribed to your email newsletter, and she hasn’t set foot inside your corporate website for ages, either. So don’t worry about selling Social Media to your executive staff. And please don’t tell the researchers that you’re allocating 250% more budget to Social Media in this calendar year. You’re not. You’re investing in great content. The rest of it is free.

And there really isn’t a better Marketing ROI around, is there?

Apple doesn’t do social

Remember my post Brands like friends?

I concluded: “That’s why of all the things you can say about brands, this one is imperative: they have to be consistent. If not, it’s psychotic, schizofrenic, or – at best – somewhat confused. Most people don’t want to be friends with friends like that.”

But what about brands that don’t really want to be friends, like Apple? Apple is the most admired brand around, the brand most people want to become friends with.

Apple is very consistent in it’s behaviour towards the market. They create brilliant consumer electronics, build and dominate new categories, and make lots of money doing so. iPad 1 generated $9.7 Billion incremental revenue for Apple in about 10 months time. iPad 2, introduced 2 weeks ago, will probably do better. Meanwhile, iPad 1 goes down in price, leaving the competition battling the user experience of an aged product, forced to go down in price without even having launched their products yet – they don’t stand a chance.

Apple made me think about communities this week. Simply because they do not invest in building or supporting a community. They don’t do social. They don’t have Facebook, LinkedIn or Twitter accounts – it’s not a lack of focus, it’s a statement. So I was wrong in another recent post, when I said that Apple wouldn’t buy Twitter, because they’d probably want to create their own social platform. Rubbish. They don’t do social.

Nevertheless, research after research shows that Apple is the strongest brand, the most admired company, with the largest fanbase in the history of high tech. And that fanbase is of course a community – the corporation Apple is just not investing in it.

This is very much aligned with their Do It Yourself customer support (outside of the US, where it is quite hard to find an Apple store, the website is about the only means of support). With Steve Jobs’ famous one liner: “You can’t expect the customer to know what he wants.” They don’t listen to the market, they create and direct the market. They are fundamentally not interested in their buyers, their fans. And although I am a fan of Apple’s products, and an admirer of their marketing strategy, I am sure this attitude will eventually bring Apple Inc. down. Because every successful product (strategy) will be copied, and you just can’t be brilliant all the time.

When I walked by the Apple flagship store in Palo Alto, California three hours before it started selling iPad 2 on 11 March, there was an endless line of fans waiting, filmed by television crews from all over the world, who in their turn were filmed by film crews from all over the world. Apple had provided them all with umbrella’s, customers and media the same, to keep them safe from sunburn.

Who’s who in The Buyer’s Journey 2.0

It just occurred to me that I had 5 conversations over the last week centered around the topic of the buyer’s journey – the journey that essentially turns a prospect into a customer. Obviously, this journey will always be an important topic in any business, but things are changing out there, and 5 conversations tells me it’s due time for a blog post. So let’s try to make sense of it all.

My 5 conversations:

• 1 with a PR strategist
• 1 with a Demand generation manager
• 1 with an IT Industry researcher
• 1 with a Community manager
• 1 with a Field Marketing Manager

The buyer’s journey takes the prospect through 4 phases: Discovery, Consideration, Decision, Advocate, Discovery and so on. The sales funnel is a buying cycle.

To guide the prospect along the way, all content the vendor lines up for him, ideally maps perfectly to the buyer’s cycle. It should be available whereever the prospect is looking for information. And whenever a prospect consumes content, there should be clear next step available – to open the door to the next phase of the journey. It’s a game – it should be fun.

To do it right, you need integrated communication strategies in owned, paid and earned media, quality content, and a strong focus on database management – to understand buyer’s behaviour.

It is not fun & games yet. Social media have thrown many things up in the air. On the buyer’s side, and therefore also on the vendor’s side. Traditional roles are shifting all around.

The IT researcher shows information consumption patterns, and tells me which information carriers I should provide in each of the phases of the buyer’s journey.

The PR strategist said PR 2.0 means that PR firms now have two main target audiences, instead of one: press and people in social space. Traditional media will no longer be able to reach and activate audiences, he said. Actually, many news items are provided by people these days. You should use that to your advantage.

The demand generation manager just wants to generate demand, is a strong believer in event marketing, and is “not really into the whole social media thing yet”.

The community manager is not close enough to the field to understand which conversations should be seeded in Russia. And he doesn’t understand a word of Russian to begin with.

The Field Marketing Manager wants the PR firm and the community manager to help him become more of a community manager himself, but lacks the know-how and the resources to set it all up, and make it tick. He does understand the research data though. To create compelling content, one needs funds – the pr strategist advised. Hmmm.

Roles are shifting, behaviours are changing – try to keep up. I like this sheet (Copyright: SiriusDecisions, via Babcock & Jenkins).

2011: Estimating the Likelihood of Conversion

All marketing blogs that matter agree that 2011 will be about prospect and customer targeting. The Million Dollar Question: How to serve the right content to the right audience at the right time through the right communication channels? Many call the discipline focused on answering this question Content Marketing.

Why? Costs go down, conversion rates go up, and on average, customer life cycles will be extended, which will have a positive impact on overall revenue. A million dollar question, indeed!

In their 2006 Harvard Business Review Article “Knowing what to sell, when, and to whom”, Kumar et al state that “despite the abundance of data that many companies collect, most do a poor job predicting the behaviour of their customers.” They go on to present a rather crazy mathematical function to estimate the likelihood (Li) that a given customer or household (i) will purchase a given product at a given time.

Applying this formula to customer data “ups the odds of successfully predicting a specific purchase by a specific customer at a specific time to about 80 per cent, a number that will have a major impact on any company’s marketing ROI.” You can buy the full article for a mere $6.95 here.

However sophisticated this thinking, it applies strictly to customers. What about prospects? How can we estimate the likelihood of a prospect converting into a customer? By delivering on the promise of Content Marketing.

In 2011, paid, owned and earned media models will be refined to enable companies to move from 1-to-many to 1-to-few communication strategies. Push and pull tactics will have to be re-articulated in the new social marketing paradigm. Marketing Automation systems are designed to gather digital body language and help marketers identify response patterns in order to predict future audience behavior. Lead nurturing and scoring mechanisms will help us understand which prospects are ready to engage. Integration with Sales CRM systems and Customer Data Warehouses will close the loop between marketing and sales and eventually bring a higher return on marketing and sales investments.

Eventually, the content marketing strategist will be able to calculate and predict the likelihood of  a given prospect converting in to a customer. Let’s use 2011 to work on the statistical function to come with it!

Relationship branding (3): Event Marketing (Offline)

NetApp, Cisco en VMware promoten hun onderlinge samenwerking onder het thema ‘Imagine Virtually Anything’ (IVA). Market Awareness en Channel Enablement vormen de twee primaire doelstellingen voor marketingcommunicatie. Evenementen worden ingezet om prospects in direct contact te brengen met direct en channel sales. Een overzicht van drie typen evenementen: Industry Events, Channel Events en Online Events.

Industry Events: VMworld, Storage Networking World
Grote jaarlijkse branche-evenementen zoals VMworld Europe, VMware’s flagship event, en SNW Europe vormen de gelegenheid bij uitstek om relaties aan te knopen, te versterken en uit te venten.

Als een van vier Platinum Sponsors van VMworld Europe 2010 (12-14 oktober, Bella Center Kopenhagen, 5000+ betalende bezoekers) maakte NetApp deel uit van elke boodschap die de organisatie deed uitgaan in aanloop naar het evenement – een uitgelezen kans om het Imagine Virtually Anything-thema onder de aandacht van onze doelgroepen te brengen.

The NetApp beursstand op VMworld Europe 2010 (Kopenhagen, 12-14 Okt 2010)

Tijdens het evenement trokken NetApp IVA-voordrachten door Cloud Czar Val Bercovici, en Virtual Storage Guy Vaughn Stewart met VMware en Cisco volle zalen. Hisam Ahmad van T-Systems gaf een presentatie vanuit klantperspectief. Een van de demokiosken op onze beursstand was volledig gewijd aan IVA, en zowel Cisco als VMware stelden mensen beschikbaar die op onze stand aanwezig waren om prospects te woord te staan. Honderden badgescans worden in de komende dagen verwerkt, gekwalificeerd en met telemarketing opgevolgd.

Channel Events
In de eerste bijdrage van deze serie noemde ik het belang van het indirecte verkoopkanaal. Het is de taak van NetApp, Cisco en VMware om het Imagine Virtually Anything-thema over het voetlicht te brengen. IVA-gecertificeerde channel partners kunnen vervolgens van de bekendheid profiteren door lokaal evenementen te organiseren. Om hen daarbij te ondersteunen, werd een event marketing kit samengesteld op basis van content, sprekers en promotiemateriaal van NetApp, Cisco en VMware. De geplande channelevenementen zijn terug te vinden op de lokale IVA landing pages, met verwijzing naar de registratiepagina’s. Alle traffic die naar deze landing pages wordt geleid door search, PPC, sociale media en email marketing komt dus direct ten goede aan de gezamenlijke parners.

Wordt vervolgd: Online Events – NetApp TechTalk, Quadia en BrightTalk

Target Syndication (1): Where Content Marketing Meets Nurture Strategy

Een collega vroeg me deze bijdrage in het Engels te schrijven.

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Shifting audience behavior
Audience behavior is changing fast. There’s a lot happening in the marketing and communications space to illustrate the shift. It’s not in everybody talking Social Media (instead of doing it). It’s not in Apple announcing the iPad. It’s not even in Facebook beating Google as number 1 US website. It’s much more profound – these are all just agents of a fundamental shift in information consumption, that has changed the face of marketing and communications.

In day-to-day business we already see Pay-Per-Click performance deteriorating at tremendous pace, traditional advertising and media agencies dropping out of business, new marketing services emerging every day, start-ups being able to beat established brands in pr ink shares. Smart marketers beat rich marketers across the board.

Prospective customers do not respond to traditional triggers anymore. They found new ways to gather buyer information, delaying or even suspending their dropping into the qualifying mechanisms marketers have put in place over the last 10 years: CRM, telemarketing, lead management. If we are unable to capture the prospective customers’ attention with the right message, at the right time, at the right place, we will fail. The prospect is changing the game, taking charge of the relationship.

3 converging trends enabling target syndication
Over the next weeks, I will dig in to the 3 converging trends that together allow vendors to regain control of their go-to-market, and deploy sales/marketing strategies that will bring more focus and revenues than ever before.

1. Data quality & Buyer persona definition
Advanced CRM and database systems bring rich detail to any suspect, prospect and (ex-)customer database. With the right allocation of resources, strategies for enrichment, cleansing and augmentation, corporate databases will become more powerful than anything any media agency or buyer could ever provide. Deliverable: a 360 degree view of the prospective buyer – whether that is a net new contact, a customer looking for refresh or upgrade or a former customer deciding to return.

2. Content Marketing
Marketing PR is changing from a pure mass-marketing push to a much more intelligent, laser-targeted, audience-based communication instrument, that will take on a new task: deliver the various segments of our audiences within – or outside of – our database with exactly the right content, at exactly the right time. Knowing the audience means understanding where they are in the buying cycle, and providing them with exactly the right sequence of content pieces, allowing them to gather information, discover value propositions, evaluate alternatives, consider competitive offerings, and finally decide on investing. New e-marketing technology and methodology, like marketing automation, prospect nurturing and lead scoring, will help the marketer to deliver these tailor-made content pieces when they are most effective.

3. Marketing Automation
As audiences evade traditional lead qualification schemes – i.e. attend marketing events, subscribe to e-newsletters, download fact sheets from corporate websites, call internal sales desks – new technology enables us to track audience behavior and build our databases on a unprecedented scale. Marketing Systems – like Eloqua, Silverpop, Marketo -  are taking over behavioral tracking, information delivery and follow-up, lead nurturing and scoring, opportunity hand-off to sales. Marketers will focus on data analysis and segmentation, campaign strategy, content creation, and lead reporting.

Target syndication
Knowing where tomorrow’s buyer is, is easy. She’s already in our database. Knowing where next year’s buyer is, is what marketers will be focusing on more and more. How do we home them in on our value propositions? Our databases will be bigger, broader and deeper. Our campaigns will not be 1-on-1 yet, but they’ll be targeting clearly defined buyer personas, and provide them with exactly the right content. We will syndicate this content through all available channels in order to deliver our targeted messages: landing pads, social media, search, blogosphere, 3rd party comms, online and offline events, publishers, strategic alliances – we will find our prospects, and we will tell our sales in great detail who they’ll be calling on, kind of like in the old days.