Social Media Darwinism » Marketing

Gut Feeling or Analytics – which is better?

Paul Dunay — Wed, 08 Feb 2012 18:00:34 +0000

So I was talking with a CMO buddy of mine the other day over dinner and this topic came up. Of course you know as a CMO of a leading Social Media analytics firm – I think you can guess which side of this argument I was on. But seriously, my buddy honestly wanted to know – so what can you do with all this good social media analytics that you talk about? He really didn’t know.

So here is what I told him that marketers should be doing with analytics but haven’t truly adopted. I think part of the problem is that some of these tactics haven’t become a standard operating procedure but I can tell you folks that is exactly where we are heading. Marketing is the last big spend on the income statement and its our turn to show how we can be more effective with the same dollars.

One way is to use the analytics to create your ideal customer persona by interviewing your best, most profitable customers who have had the highest velocity in your pipeline. Use this persona to drive any ad plan, sponsorship plan or event plan.

Another way is to use the analytics to inform your media plans and to predict the outcome of a specific campaign.

Another way is to use the analytics to zero in on new messaging or even use those words to inform the SEO and SEM that you should be doing or buying.

Another way is to use it for product innovation, some companies are not crowdsourcing ideas for their products rather they are using the analytics to find a “white space” in the market where there is an unmet need – then launching a product or service to fill that need.

These ways are guaranteed to make you dollars more effective since you will know with certainty how effective those dollars will be in hitting a predefined target. How can you hit a target you can’t see – with good old gut feeling – I doubt it!

Small Budget – Big Impact So let me ask you a question – if...
Ideal Customer Persona – made with Social Data Some advertising agencies charge you hundreds of thousands of...
How important is real-time data? It’s all relative The speed with which social media spreads ideas and...

Related posts brought to you by Yet Another Related Posts Plugin.

Making Marketing Agility Cool

Paul Dunay — Wed, 23 Nov 2011 18:00:37 +0000

Chief Marketing Officers take pride in being the trendsetters around the corporate corral – the arbiters of hip, the sharpest dressers, the consummate gadgeteers. But when it comes to using data to support decision making, the CMO is likely not to be the smoothest operator.

Each year the Marketing team works hard to distill consumer insights into planning documents that will guide its programs in the months ahead. Meanwhile, there are already other departments within corporations that are continually refining their budgets and plans using the latest business intelligence data from enterprise resource systems.

Good creative will always be important in marketing. But when customers can abandon you for a competitor in a mouse click, it’s simply not enough. You have to be ready to act in a heartbeat. And to make the right moves, you need the ability to acquire consumer data, interpret it and apply it to your marketing programs – all in near real-time.

Winning companies are defined today not by their product and service offerings but by the manner in which they respond to the needs of their consumer. Social media data analysis opens windows into consumer conversations, producing real- or near-real-time data that can guide key decisions in marketing and across the value chain including product development, production, sales and customer support.

Better data can lead to better decisions and, ultimately, better outcomes. Now that’s cool.

Is Sentiment Making Brands Stupid? I loved the article by Nick Carr a few...
Marketing needs to be more Adaptive! Ok so this isn’t the newest concept you ever...
Social Media Marketing and Darwin: Evolution or Irrelevance “If you don’t like change, you’re going to like...

Related posts brought to you by Yet Another Related Posts Plugin.

Romi Mahajan leaves Microsoft to Join Metavana as CMO

Paul Dunay — Thu, 17 Nov 2011 14:00:31 +0000

Long time friend and well respected CMO buddy of mine Romi Mahajan is leaving Microsoft to join Metavana. Romi has been profiled on my blog several times so its only fitting that reached out to find out why. What follows is a transcript of what I learned.

Q: Thanks for taking the time to chat with me Romi, I’ve been a fan of your blogging on ResearchAccess for quite some time and it’s great to finally have a chance to reconnect. I understand that you’ve recently made a significant change in your work situation what can you tell me about that?

A: After an aggregate of 9 years at Microsoft, being the CMO of a $100M dollar digital agency, and a writer, I wanted to get back to my roots in terms of “building” something that had huge customer promise and could make a dent in reality as we know it. My new role as CMO of Metavana, a soon to be launched social-sentiment engine, has all the elements of my dream job – People, Impact, Autonomy and direct correlation to both the Consumer and Enterprise spaces. The chance to build a crack Marketing team and to make potential energy highly kinetic is an exciting (and daunting) proposition!

Q: So social sentiment analysis is a big debate and quite the rage now, with new companies and new approaches cropping up frequently. What makes what you’re doing different than all of the others?

A: I don’t like to speak ill of other companies so let me concentrate on the good parts of Metavana instead of the ‘bad parts’ of others. What drew me to Metavana like a moth to a flame? A few things:

I believe the problems in this space are not just smart Engineering problems. I think they are physics and math problems that require the right level of scientific rigor coupled with elegant engineering and CS. We approached this space through the lens of Chaos Theory and non-linear mathematics. That itself puts us in a category of one.
I believe in accuracy, especially since large companies, governments, and individuals are creating action plans around the result sets we provide. Metavana’s engine provides amazing accuracy with regard to the polarity of comments on the Social Web and as such will be an integral part of any organization’s business model.
I am a strong believer that social sentiment and voice of the customer cannot be sequestered in some nether region of an organization. Further, that VOTC can’t be a one-off, expensive, episodic and hard to implement ‘project’. It has to be present in the very warp and woof of the organization’s fabric. We believe we have business model innovation that will help us get to ‘ubiquity’ in an easy and customer friendly fashion.
Finally, I’m drawn to Metavana because we aren’t trying to solve every problem. We have a gorgeous ecosystem of partners who will apply their expertise to get us into the last mile of the customer journey. We are an engine!

Q: Wow, that does sound pretty damn interesting! Of course I know of NLP, LSI, DA, etc.. but I’m not sure I’ve ever heard of anyone applying Chaos Theory to social sentiment analysis! Without giving away anything IP, can you tell me a bit more about how the Metavana engine works? Also, since there is a huge debate among academics and suppliers, about which technique is best, can you describe how you arrived at this model as the best approach to bring social sentiment into the boardroom?

A: First of all, all of those other methods are sensible at some level and not at others. Not looking to pick a methodology fight but we believe Chaos and Symmetry theories are the next phase of evolution to get accurate, fine-grained “meaning” from unstructured and emotional content. Metavana aims to make all systems socially-aware so that all employees in the Enterprise make VOTC part of their jobs!

Q: The name would suggest that you are making a “big data” play by combining multiple sources of meta data from the social web to create a VOC “nirvana”, which of course is kind of the holy grail for everyone in this space. How are you tackling that integration and the competition from companies like IBM, Salesforce, and the big market research players that are also aggressively moving down that same path?

A: There are two answers here. One is I prefer to be playing in a big market and owning a small piece of the pie than playing in a null-set market. Also, we are a small company and in many ways the large companies’ forays into this space are ‘proving the need.’ So I welcome them.

When you think of an engine or a platform, integration then is about partnership with great companies that build software connectors or process connectors to the engine. So in that sense, we are federating our model to include the ecosystem.

Q: It sounds like you are aiming for like the Enterprise Feedback Management space (or EFM if we have to make an acronym) by offering a bolt-on solution to other data sources (survey, CRM, etc..); is that accurate? Again, it’s a crowded market, so how will the Metavana solution differentiate from players like Clarabridge, Verint, Questback, Netbase, etc…? Is the algorithm behind the sentiment scoring powerful enough to rise above the field of established players? Also, can the Metavana model be applied to other types of unstructured data besides social media, such as blogs, forums, survey verbatims, etc…?

A: We believe we are broader than EFM. We believe we have accuracy as a differentiator and, further, that we can create categories for action better than others. So, yes, we’ll compete and customers will decide who is best! Yes, Metavana can be applied to all unstructured content/data.

Q: Getting to the behavioral drivers of consumer choice is obviously a major demand from brands, and one of the promises of text analytics is to deliver the “affect” of the emotion behind the text. It seems to me that your approach could be really interesting to look at macro trends and possibly even predict future need states but how does it deliver on individual emotional measurement?

A: Our consumer play (individual) is to be announced after our B to B play but your thinking is right. Affect/Emotional reading is the name of the game. I believe that we’ll be able to help with prediction of macro-trends but also for determining polarity and prediction for mundane and ordinary trends as well.

Q: Which firehoses or APIs will Metavana be accessing during the initial launch?

A: Still to be determined and announced shortly.

Q: Very cool stuff Romi; thanks for sharing all of this and I will be sure to watch Metavana with great interest! So last question: your career is a storied one and I consider you one of the great marketing thinkers around today. How do you think the online marketing ecosystem will look within the next five years and ultimately what role will companies like Metavana play in that vision of the future? Also, you’re obviously a guy who likes a challenge, so after all the fun challenges of launching a start-up, what will you do to keep building on your personal brand momentum?

A: Answer to your last question: Paul, thanks for the personal question. I’m really all about people, relationships, love, justice, and ambition. The three pillars of my career are People, Impact, and Autonomy. I think the online marketing space will continue to evolve but will never be the panacea people make it out to be. Marketing, to paraphrase the Bard, is a many-splendored thing and will continue to be a diverse, multi-faceted gem. What I do believe is that some trends are not “undone” or “rolled back” and the Social trend is now simply part of what we eat and breathe in Marketing. So companies like Metavana will be the new platform players that enhance the ecosystem and add to the individual and organizational voyage we all undertake.

I have great hopes for our profession and for my company. I hope you and your readers continue to hold our feet to the fire.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Make Your CFO a Social Media Fan

Paul Dunay — Wed, 09 Nov 2011 18:00:01 +0000

Social media definitely pays off, but you’ve got to focus on the approach not the tools.

Social Media has hit the mainstream these days but the big concern on every product marketer’s mind has been how to justify the ROI? Never is that more true than at budget time. The purse string holders might harbor unspoken thoughts like: “We spend big bucks on those developers, customer support and sales engineering people. Why are you wasting the company’s money by giving them geek toys when they should be doing real work for us?

If you’re concerned about social media cost justification, you’re not along. A recent Chief Marketing Officer (CMO) survey found that only 20% of CMO’s felt social media produced measurable ROI and 62% hoped it may someday. If the CMO’s lacked ROI confidence, then just imagine what a CFO or CEO survey might have told us!

Social media definitely pays off, but you’ve got to focus on the approach not the tools. The classic product marketing approach to social media is treating it like just another broadcast media channel by posting press releases, sharing events, posting videos and expecting to see instant results like you get with other online media like banners, text links and search. All of that is a good start, but the results you need to justify your efforts will come by taking a holistic company approach.

Here are some real-life examples and I am sure you can find others when you start thinking this way.

Improved Customer Support

Social customer support can reduce customer churn and increase retention rates faster than any other program I have ever seen. Listening for and spotting a customer issue, responding to them and solving their problem in minutes using social media provides an “exceptional customer experience” which also unlocks the beauty of social media and the web in sharing stories of great customer service travel far and wide.

Collaborate with your customers

I don’t care whether you own a community or your rent one from a provider like LinkedIn Groups – but a community is a great place to create a social experience with your customer. B2B marketers often host bi-annual advisory boards or annual user group meetings and these are just screaming for a way to keep them connected via a tool like on online community. When you do that the results reported in a recent Jive report of over 2000 customers are outstanding. Lower costs, more revenue – a perfect combination!

Users
- Generated 32% more ideas
- Sent 27% less email
- Found answers to questions 32% faster
Employees
- Spent 42% more time communicating with customers, which led to better retention rate
Results:
- Support calls dropped by 28% (Lower costs!)
- Sales to new customers jumped by 27% (More revenue!)

Activating brand advocates

When you give great customer support or have a great product – why not activate the social channels to accelerate their word of mouth. See below for what happens when you do.

Find diehard fans on Twitter, Facebook and LinkedIn
- Enlist them for your brand
- Get them to make recommendations
- Build your brand with the power of their voice
Results: 5-9X ROI (based on revenue lift) by activating best brand advocates

Increase Engagement with Professionals

Used LinkedIn recommendation ads to invite endorsements and engage target users
- Earned 2000 product recommendations
Results: 500,000 viral updates on company products

Finding intent to purchase

You may be wondering with all this great social media conversations going on – is there anyway to mine social media to market smarter? The answer is yes there are tons of ways to mine the data to improve your content creation, SEO and SEM keyword selection, media planning (from online to tv media) and for lead generation.

Analyzing social media to find leads using a variety of search terms
- Both competitive and non-competitive search terms reveal buyers such as “replace product X” or “upgrade competitor Y” – any list of competitive terms paired with the words replace or upgrade can give you a list of potential prospects

Results: $250,000 sale found using social media and completed in 14 days

By now, you should be getting the idea of ways to expand your thinking on justifying social media. When you find others, let me know!

5 ways to use social media for solution marketing It’s easy to get caught up in the buzz,...
Don’t tell Jelli there is no ROI in Social Media! I had the pleasure of meeting the team from...
Social Media Marketing and Darwin: Evolution or Irrelevance “If you don’t like change, you’re going to like...

Related posts brought to you by Yet Another Related Posts Plugin.

What Moneyball Teaches Digital Marketers About Winning

Paul Dunay — Tue, 27 Sep 2011 16:41:29 +0000

“Adapt or Die” – Billy Beane

Moneyball, a book by Michael Lewis and now a movie starring Brad Pitt, is an amazing story of how Billy Beane, the then Oakland Athletics General Manager, chose to abandon baseball’s collective wisdom and applied what many considered to be “outsider” thinking to develop a winning team. Hindered by a small market budget, Beane embraced alternative statistics, or what marketers might call “KPIs”, to find undervalued players.

The parallels between the almost ten year old book and the experience of marketing in today’s digital world didn’t escape me. Now more than ever marketers are asked to achieve increased performance (usually this quarter), prove ROI, and demonstrate how a throng of marketing activities generate sales. Linear thinking applied to what is often emotional human behavior seems to unnecessarily complicate things to me, but I digress. As brands adapt to keep pace with the changes brought on by today’s demand economy, the budgets and line items need to demonstrate the same agility in order to stay in sync with consumer trends in our growing social and mobile world.

When everyone’s way isn’t working for you, find your own path

Social media technologies, along with rich internet enabled mobile devices, have catalyzed a decade long trend of evolving digital behaviors by consumers. But when you look at the methods brands use to understand consumer behavior, develop marketing strategies, plan fully integrated campaigns, evaluate activation tactics, and measure performance, they are sometimes processes that are 50 years old. The technology and techniques marketers frequently use are outdated, broken, or unscalable. When making marketing decisions, how many of them gather information from the mountains of data that surround us about the consumer and our performance?

When you are choosing the same activity and seeing diminishing returns, it is time to embrace change. As brands shift from advertising to engagement marketing, the models to measure performance will change. Rather than looking for new standards to develop around engagement, or methodologies to build digital word of mouth, brands must develop models that work for them and their customers. You need to tailor this evolving media world to work for you and employ social and targeting technologies to deliver marketing messages that inspire action and loyalty.

“We’re card counters. We’re going to turn the odds against the casino.” – Billy Beane

The effectiveness of mass marketing methods is fading in proportion to the shrinking signal strength of media in these “social” times of the internet age. The story of Billy Beane and his Oakland Athletics inspires me to follow my heart instead of my head as I track my target consumer across digital platforms to deliver timely and relevant marketing messages. I encourage you to find your brand’s optimal marketing mix from the voice of the consumer in explicit and implicit digital data that is all around us.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Marketing needs to be more Adaptive!

Paul Dunay — Wed, 22 Jun 2011 18:00:42 +0000

Ok so this isn’t the newest concept you ever heard of – but hear me out – its time we really changed a few things in the marketing organization.

So its easy to see that today’s marketing teams are not that well equipped to handle “real time marketing” as David Meerman Scott defined it. We need better systems to take in data and analytics in order to make smarter better business decisions.

I would argue that you have to have several sensing mechanisms in place – one that is a data set that is always looking backward (like a rear view mirror) so see what has been said and is always listening and watching the conversations, in addition to that you need a forward looking data set (like a windshield) to help drive decision making on what new products or services to launch, what will be the effectiveness of this campaign, what new hyper customer segments can we go after, and then of course you need a dashboard that pulls all this together in one place so you can see across multiple forms of media.

With today’s fragmented media landscape no single individual can pull together all these media channels to orchestrate and master them. And as a result you get silos of sub-optimized media.

In a real time marketing world speed will be key. So how can you even think of making a yearlong media plan? But that’s what some media planners are doing when it comes to TV and Print. As marketers we need to be optimized for speed and rapidly effective decision-making. Having said that I know we have a long way to go but anything is better than making gut level decisions or worse taking advice from your CEO on a media plan!

Small Budget – Big Impact So let me ask you a question – if...

Related posts brought to you by Yet Another Related Posts Plugin.

Ideal Customer Persona – made with Social Data

Paul Dunay — Wed, 08 Jun 2011 18:00:41 +0000

Some advertising agencies charge you hundreds of thousands of dollars to create what they call the “ideal customer persona”. I discussed how you can do this for FREE with Facebook in a prior post called Generating a Buyer Persona with Facebook Advertising but unfortunately you do get what you pay for.

What if there was a way to build the ideal customer persona by using social data? Well there is – and I am here to say I have done it and the results were actually quite surprising.

After a recent win here at Networked Insights that took under 2 months to close I began to think we struck a chord with this buyer as we have done previously with some of our best and long standing customers. So some close examination of the pipeline yielded a bunch of high velocity sales that could be modeled to create the ideal customer persona.

I personally conducted the interviews with those customers to understand things like: what do they read – physical print pubs, what do they read online – list of sites, where do they go online for news – list of sites, how do they get their news – Twitter, RSS readers etc, where do they go online to learn – trusted sources, what events do they regard – trusted events, what events have they attended – in the last 12 months, what events won’t they attend again.

From the output I got great data on the places I should post display ads and sponsor events. Plus I can plug all that digital data into an engine like we have here at Networked Insights to find out what topics are trending with those audiences, what words do they use when talking about companies in our space, what new places are they going online.

Who said there isn’t an ROI in social media – I just found another way to save me tons of money and make my marketing dollars more effective using social data!

Small Budget – Big Impact So let me ask you a question – if...

Related posts brought to you by Yet Another Related Posts Plugin.

Microsoft’s Future in Digital Marketing

Paul Dunay — Mon, 04 Apr 2011 01:15:33 +0000

Over the weekend I got to meet with Romi Mahajan the World Wide Director of the Digital Marketing Platform Group at Microsoft. His role is to create the vision for Digital Marketing as it relates to Microsoft SharePoint 2010 for Internet Sites, and Microsoft FAST Search Server technology to create great digital experiences for its customers and leverage its extensive partner network. I was really surprised and excited to learn that Microsoft is taking the Digital Marketing place very seriously since they are one of the largest players in the space!

Below is a transcript of some Q&A that I captured with Romi …

1) What is your vision for Microsoft and Digital Marketing?

I believe digital marketing is at the center of a set of tectonic changes happening in the marketplace, across enterprise and consumer-based scenarios (which are converging quickly). Companies have a core set of common questions (How do I create loyalty in my current and potential customer base, how do I create new forms of commerce, how do I expect my brand in meaningful ways, how do I connect to my value chain (partners etc) in a seamless, efficient, and exciting way…) and in each case, digital marketing can provide either the foundation for the solution or elements of the foundation. Meanwhile, at the same time media, advertising, technology, and brand are all moving towards a singularity and, as such, digital marketing becomes the easy moniker with which to refer to all these changes. Microsoft as a company not only understands the changes afoot, but is the only company that has direct involvement in all the different aspects of digital media like paid, earned, and owned media, back end and front end technologies (from the OS to the presentation layer), and a solution for all sorts of computing devices. I see Microsoft at the forefront of digital marketing in the next 5 years.

2) How much of the Digital Marketing spectrum does the Microsoft’s Digital Marketing cover?

The Microsoft Digital Marketing suite covers many but not all of the aspects of the digital marketing. That is why the partner ecosystem (Agencies, ISVs, Integrators, Consultants) are core to rounding out the offering. In areas, we excel, in others we have “ an answer” and in some areas we rely 100% on partners. That I believe is the winning model and the only one that scales.

3) How is Microsoft helping brands to connect with customers using the Microsoft Digital Marketing suite?

Microsoft has powered thousands of dynamic websites including sites like Dell.com, Ferrari.com, Energizer.com, Chesapeake Energy.com and more. Through interactive elements on websites to the provision of winning digital experiences via mobile, Microsoft is working very hard to help brand connect to customers. I don’t want however to overstate the case. There are many great firms out there who we partner with and who help us understand the customer in new and exciting ways. There are also other great companies who compete directly with us. The key is not “who wins” but how the customers’ customer is being taken care of and served in the process.

(4) What stand out examples can you give us of Brands using the Microsoft Digital Marketing suite?

So one of the best examples we have is Ferrari.com where they used SharePoint as the presentation layer and content management system. Few people know that SharePoint is one of the largest content management software’s out there, not just inside the enterprise but also outside the enterprise.

Ferrari wanted to make its Web site as state-of-the-art and captivating as the cars it manufactures! They migrated from a Java-based infrastructure to Microsoft Office SharePoint to streamline development, simplify content management, and improve the user experience. And with the new site, Ferrari has created a stronger audience connection while increasing traffic by 237 percent, with a 150 percent increase in unique visitors.

5) Where are Microsoft and Digital Marketing heading next?

The future is an exciting one for both Microsoft and for the Digital Marketing industry in general. While aspects of digital marketing have “jumped the shark,” the change is here to stay. Look for more adaptive, dynamic websites, set of services that when combined intelligently create new digital marketing platforms, a lot more ‘closed-loop’ marketing in the digital marketing space, the rise of what I call “The Gaming Metaphor” as the central “method of interaction” that dominates digital experiences, and a host of others that I’m not smart enough to predict!

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

The Marketing Technologist: Time has Come!

Paul Dunay — Wed, 02 Feb 2011 18:00:28 +0000

In a recent Brandweek article I saw a quote from Lynne Seid, a senior partner at Heidrick and Struggles – one of the top recruiting firms in the world – in which she said: “We’re seeing the emergence of the chief digital officer reporting into a global CMO.” This explains many of the calls I have been getting from recruiters also looking for someone just to do “all that digital stuff” for the CMO. Said differently, I think they are looking for Marketing Technologists!

This got me thinking about an idea I’ve had for the past year about the need for a new role in the marketing organization: Marketing Technologist.

In researching the concept further, I came across the Chief Marketing Technologist blog by Scott Brinker. Brinker recently published an article in Advertising Age titled, The Case for a Chief Marketing Technologist (September 29, 2010), in which he states:

“Marketing has become deeply entwined with technology. This didn’t happen overnight; it’s been sneaking up on us for a while. But because technology had been so tangential to marketing management for most of our history, the organizational structure of marketing has been slow to adjust to this new technology-centric reality. But we’ve clearly reached a tipping point. To fully reap the benefits of this Golden Age, marketing must officially take ownership of its technology platforms and strategies. And the first step of such ownership is to appoint someone to lead it. Enter the chief marketing technologist.”

I know for my own team we are building things we never did before like: iPhone aps, iPad aps, Android aps, as well as implementing various SaaS applications like Salesforce.com and WebTrends, and marketing automation applications like Aprimo but what is odd is that we have never had to talk with the CIO. In fact I get a little worried that the CEO of one of these companies will one day meet our CIO and thank him for our business and he won’t even know who they are!

I also like to think about the traditional path that the CMO has taken into the C Suite is changing. Typically the modern day CMO takes Marketing 101 in college, gets a Masters in Marketing, works for a major brand like P&G as an entry level marketer, becomes a brand manager then rises up to eventually become the CMO. Well today’s marketers are growing up digital – they create aps, they make Facebook pages, they test mobile ads and design augmented reality games – all before lunch!

So while the idea of a Marketing Technologist probably didn’t make sense for many organizations five years ago, it’s hard to imagine that major B2B companies won’t be operating without one in the very near future, as evidenced by the recruiting demand.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

An Interview with Sean Geehan, CEO and Founder Geehan Group

Paul Dunay — Wed, 07 Jul 2010 16:28:32 +0000

I met Sean at a recent ITSMA Marketing Leadership forum. Many of his ideas really hit home for me so I wanted to share these with you. He has a forthcoming book that I am also really looking forward to reading called the B2B Executive Playbook where he will be talking about how to create sustainable and predictable growth.

Q. So tell me about the typical concentration of B2B customers versus B2C customers?

A: In the B2B world, the actual number of customers is microscopic when compared to B2C. B2B executives are truly addressing a much smaller pool of customers. A B2C company like Starbucks, whose revenues are approximately $10 billion, has a huge number of customers, 70,000,000. Compare that to a $7 Billion B2B company like Celestica for example, which has only 100 customers.

Even more daunting is that most B2B companies’ top 10-20% or their customers account for 90% of their revenue. For Celestica, just 10 customers account for 90% of their revenue (over $6 billion). Conversely at Starbucks, $6 Billion of their sales comes from approximately 11,000,000 customers.

No matter how many venti, nonfat, cinnamon-sprinkled, decaf lattes Starbucks’ top one thousand customers bought, it wouldn’t dent Starbucks’ performance if all those customers decided to switch to McLattes from McDonald’s. If only two of the top 10 left Celestica, they’re revenue could be down 15-20% (about $1 billion).

The harsh reality with most B2Bs, regardless of the company’s size is the fate of a B2B company lies in the hands of just a few customers. How marketers address this is the difference, which leads to either dominant, mediocre or disastrous results.

Q. Where can B2B Marketers begin to improve their results?

A: Here are two quick ways to boost marketing efforts:

1. Target current customers. Any organization’s best, least expensive and quickest profitability payback opportunity is within their current customer base. This is what the greatest companies do, including large, mid and small alike. Oracle, Wells Fargo (commercial group), HCL, and Intesource to name a few. They also recognize the more customers buy from you, the less likely they are to leave you…so yes, hugging and TLC is highly recommended.

2. Target Decision makers at prospective target accounts. Having them champion and drive the buying process increases close rates, accelerates the speed of contract signing and increases the margins and deal size.

Q. Do you typically see B2B marketing spend allocations that are not aligned with business goals?

A: Too often we get hung up on the latest “hot thing” in marketing: the jingle, the tag line, telemarketing, direct mail, CRM, brand management, websites, SEO, Social media, etc. And while they are important (given the right situation), effective, etc., they are tools, systems and programs…the means to an end, not the end. Right now the “hot thing” is social media, and as powerful as social media is, it still needs to be balanced and integrated into the overall marketing plan.

Start with making sure the ROI of each program supports the business goals. Then balance the marketing mix to align to these goals and maximize the impact your marketing dollars have on the business goals. This ensures marketing budgets and activities are aligned with your business goals. The more they are aligned the greater predictability in the results and keeping and growing your budgets.

Q. Why do B2B marketers spend more on acquisition than retention?

A: It’s simple. Everyone gets excited when a new customer is signed. There’s a celebration. The bell is rung. Lots of recognition and rewards are handed out.

How much celebration is there when a long-standing customer renews for the 6th straight year? Forget that they haven’t bid out the work in 3 years (no competition=greater margin) and they are already in your system (low cost of support, faster payment = greater cash flow). There’s clearly an imbalance here.

Now the reality: It costs 3-5x more to acquire vs. retain a customer. If your current customer buys more stuff from you, it’s harder for them to leave you (increased switching costs). If current customers are much less likely to bid out your work (increasing profitability), shouldn’t you evaluate how/where you’re spending your marketing dollars?

Marketers need to challenge how they think. If new revenue is easier, less costly and more profitable with current customers, shouldn’t we start there?…The great ones do.

Q. What’s one place where you would recommend B2B Marketers focus for the rest of this year?

A: Engaging decision makers from your top accounts – in a group setting, have them share problems they had and how they solved them (many of which your company most likely helped to solve). This can be as simple as a private event on the front end of an industry event.

It accomplishes many objectives that drive deal flow:
•   It enhances relationships, trust and loyalty for your company.
•   It gives you an opportunity to better understand their needs (current and long-term).
•   It helps marketing build more effective value propositions, messages and lead generation programs.
•   Finally, it enables them to better understand who you are and the scope of your capability (short term revenue).

For example, customer A may be buying a certain set of services from you, but when customer B shares how you helped address something else, another opportunity has just been uncovered. And yes, you’ve just generated a qualified lead for your sales organization. This is always the low hanging fruit.

Just three weeks ago a $220 Million division of a company brought 10 top European customers together to meet with their peers. Through the discussions over $18 million dollars of additional opportunities were uncovered that the host supplier was unaware existed. Verbal commitments have been given for over $12 million. The host expects this single event to increase total 2010 sales by 5-12%.

Please note while I am not a customer of his firm the Geehan Group I am in discussions with them about having them consult for us here at Avaya.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.