Outside of the gameshow arena, consumers are arguably just as obsessed with price, and this attitude has become a pain point for many a sales representative.  How does a sales rep keep the conversation away from price when that’s all that a customer is thinking about?

Teach them something else that’s right.

Let’s look at a case on truck driver engagement and retention to see how Marketing at Volvo was able to deal with this issue.

Initially, no matter what sales reps went in with…

“We have a better product!  We have more features!  We can address your needs!”

… the customer always brought the conversation back to price.

“Well… a truck is a truck, but hey maybe you can throw in some free chrome bumpers!”

Volvo convened a small group of mid- to upper-level directors in a workshop to brainstorm and develop a new message for the sales reps.  MLC members, read more about the key elements to this workshop here.

They recognized an opportunity to improve driver management for their customers…

“Customers are underestimating how much unsatisfied drivers are costing them.”

… and crafted a pitch that teaches customers the value of Volvo solutions.

“Instead of telling them how our 2,092 square inch windshield will reduce the likelihood of an accident, let’s talk to them about the costs associated with driver turnover.”

Notice that instead of leading with the value of product features and focusing on known customer needs, the new approach leads with issue(s) costing customers money and telling them something they don’t already know about themselves.

And voila, you’ve shown your customers that the price is not the only thing that’s right when it comes to your business!

MLC members, read the full case study here.

Commoditization. It’s a problem members across the marketing spectrum are complaining about: a variety of pressures, like shrinking consumer wallets and business budgets, and ease of quick price comparisons and research, are causing consumers and business customers alike to recast products as commodities.

What does that mean, in practice? It means that brand and minor product differentiators fall out a customers’ buying equation, undoing a good deal of the hard work marketers have done to attach non-product factors (for instance, branding or insight/services for B2Bs) into the decision.

How can marketers fight back and banish this fear? It’s tough; downward pressure on consumer and business budgets is the main driver, and there’s not much that individual firms can do about that. In the B2C space, we’ve found that an emphasis on shared values tends to hold up better in the face of commoditization than other non-product factors, and for B2Bs, we’ve found that tailoring messages to customer buying motivators can do the same.

Bad reputation. In a time when individual poor experiences can be rapidly propagated to every corner of the earth, a bad corporate or brand reputation are harder than ever to combat, and the perils are even steeper: channel proliferation and consumer control have made it nearly impossible to eradicate a negative opinion, once it has taken hold.

Marketers and their peers in corporate communications are, understandably, spending a lot more time and money on being able to identify or even preempt reputation threats as they emerge, and rapidly insert accurate information into the dialogue as early as possible.

Want to ease your fears of negative reputation taking hold? Take a look at our guide to monitoring social media, a vendor selection guide from UBS, our database of social media vendor profiles, and, if you’re interested, dive into our Digital Media forum to network your peers in social and digital across the globe.

Technological disruption. As if commoditization and bad reputation weren’t big enough worries, marketers in many industries – and perhaps some that don’t even know it yet – have the threat of technological disruption on their minds. Think about it: 12 years ago, according to a recent Bain study, the music industry reached its peak:

The culprit, of course, is easy availability and distribution of free music and much-cheaper digital tracks. This transformation happened in less than a decade; it’s happening now to other media businesses, like bookstores; and its entirely possible that shifts will come to traditional education, as well.

Broad technological trends are not in the control of firms or individual marketers, but you can shift the way your company responds to disruptive innovation, and maybe even come up with some of your own, as well. See our recent work on innovation for more.

Recession. The most important factor in a company’s success – one that’s almost entirely out of marketers’ control – is the state of the macroeconomy. When demand across the economy decreases, stays stagnant, or doesn’t grow much, companies will be left struggling to grow. The only growth available in times like these is difficult, zero-sum growth, which means that any possible growth is the result of marketshare being taken away from competitors.

Economic signs – at least in the Western world – are not good. With the obvious caveat that these things are extremely hard to predict, recent estimates have put the chance of a renewed US recession at 50%, and a recession may already be underway in the Eurozone, where currency and sovereign debt issues threaten fragile “real-economy” growth.

The important thing to remember in a recession is that growth is still possible. One way to do it is to get smarter about resource allocation and tactical optimization.

Internal misalignment. Marketing’s alignment – or lack thereof – with other functions is a key thorn in the side of senior marketers especially. This lack of alignment has a number of poor consequences, including Marketing losing credibility with senior executives, little recognition of Marketing’s goals at the firm level, and, even worse, a perception of Marketing as an area of “fat”, easily cut when budget contraction becomes necessary.

Marketers are great at reaching customers on behalf of our brands and companies – but we’re not so good at explaining the value of our contributions to the rest of the firm. MLC has developed a pretty big literature around this, grabbing examples from some of the best Marketing organizations in the world. For example, we’ve profiled one company’s dashboard that explicitly links Marketing’s activities to firm goals, and we’ve explained how H&R Block’s social media team communicated their value in metrics senior executives could understand:

By Ana Lapter

B2B marketing – particularly in the technology space – is not an easy job. Due to the complexity and risks associated with the adoption of new business solutions, customers take more time to analyze options, exercise due diligence using third-party sources, are risk averse and engage larger groups in buying decisions.   Much of the traditional marketing “playbook” does not effectively address these challenges.

Not surprisingly, tech-industry marketers are ahead of other industries in terms of leveraging new techniques, channels and strategies, such as social, mobile and digital media as well as technology and predictive analytics.

Tech marketing has become increasingly digital and more sophisticated in terms of engaging users, tracking customer data, predicting buying behavior and generating leads.  In fact, tech marketing has probably the highest concentration of bloggers, content creators and data analysts.  While this is not bad news, it isn’t necessarily good news either.  With everyone in the industry seemingly taking the same approach, marketers have created a race about who produces more content, has better search optimization engines or captures the biggest share of digital conversations.

What are the key things that tech and other B2B marketers should consider to avoid an unproductive competition?

Use content marketing selectively to avoid waste and influence key outcomes. A white paper suggests authoritative knowledge. While thought-provoking content can support brand awareness goals, not every white paper can accomplish this.  Rather than investing  in papers addressing overly exploited topics (tired of reading about cloud and virtualization?), Marketing should create content that emphasizes unexplored or underappreciated topics that link back to the suppliers’ unique strengths.

Also, from a purchasing perspective, a white paper in itself has limited value.  Our data, in fact, shows that white papers don’t have a significant influence on purchasing decisions.  This doesn’t mean that white papers are a lost cause -  they can be used in conjunction with other tactics to engage users in conversational channels, such as online communities, with the goal of building momentum in the mid-funnel process.

Build an integrative marketing approach. Too often, tech companies build siloed, narrowly defined initiatives that are disconnected from each other.  A tech-industry member told me recently that she was running a large social media department to build thought leadership goals with blog and online community engagements, but didn’t see the connection with other marketing initiatives.

One approach is to find a channel or media as a connective tissue and build strategies around it.  One member revealed that they were rethinking their messaging and branding processes, around their digital experience.   Another approach is to build a central online community, like Telus did, not as a standalone project for brand awareness goals, but as a critical component of a broader commercial process that included other channels, such as Sales and commercial website.  Finally, Autodesk’s case of blending customer care and Marketing’ efforts illustrates that being integrative means finding ways to connect cross-functional digital initiatives and data.

Be honest and address risk concerns. Technology purchases are not risk free.  Our research shows that buyers are concerned with both upfront (defective products and late delivery) and “back end” (implementation) risks.  Avoiding risk communication is not an option since negative third-party messages can become viral overnight.  In addition, buyers are willing to pay a 40% premium when their risk considerations are addressed upfront.

Advancements in technology continue to reshape the manner in which we approach problems. Technology promotes growth, enhances global connectivity, reduces costs and spurs innovation. Marketing has more work to do to convince buyers that companies are best positioned to deliver these benefits.

None of the big boys of Madison Avenue made to the top of “Advertising Age’s Top 100 US Agency Brands for 2010” list. Acxiom Corp., an Arkansas-based database marketing company has been topping this list for the last two years. Only eight leading advertising agencies could make it to top 20, with digital and PR agencies filling the rest of the positions.

Tim Williams wowed the audience with this fact as he opened the seminar organized by International  Advertising Association in New Delhi that I attended a couple of weeks ago. Tim is a thought leader in the advertising and marketing business, and also the author of the bestselling “Take a Stand for Your Brand.” Here, he was speaking about “How Agencies are Transforming for the Future.”

He explained how the advertising landscape has changed over the years. Many CMOs are shunning “agency of record” relationships. A number of them are bypassing agencies to work directly with media companies, production companies, and even directly with creative talent via crowdsourcing. Tim called this trend of bypassing as “disintermediation” of agencies.

So, what has caused this disintermediation, and the blurring of roles between agencies and media companies? What are marketers’ expectations from their agencies?

The answer lies in declining sense of value agencies offer to marketers. In the digital age when consumers “control” their interaction with media channels, agencies have not built their skills adequately in response. During a recent Cannes event, Diageo’s CMO Andy Fennell also pressed the need for agencies to integrate and build skill-sets organically over time, and pointed that bolt-on acquisitions don’t work.

During the seminar, Tim talked about some effective ways in which agencies can protect their turf. He advised them to:

• Be effective, rather than efficient. The traditional success metrics—reach, frequency, and cost per thousand—highlight an ad’s efficiency only, but do not ascertain its effectiveness. The new parameters of success are attentiveness, receptivity, and buzz potential. Agencies should therefore move beyond interruption to engagement. (MLC Members – check out these effective examples of customer engagement).
• Be more agile. Faced with cost and time pressures from clients, agencies should take cue from software companies for agile development. Rather than delivering something “perfect” later, they can deliver something “good enough” earlier, followed by iterative increments based on client feedbacks.
• Embrace “digital” as a competency, not a department. As Tim puts it, agencies need to adopt a policy of “ISL” – Interactive as a Second Language, where digital is developed as a competency throughout the entire agency, and not housed as a silo-ed department. Goodby, Silverstein & Partners presents an inspiring example of this approach.
• Move to adaptive marketing. In the digital world, results are created in real-time. So, agencies need to measure the effectiveness of their work and optimize it in real-time, that is, play the role of creators as well as curators. This requires a more fluid approach to marketing budgets.
• Get involved higher up in the client’s value chain. Howsoever “unremarkable” the product is, agencies’ only concern is to create a “remarkable” story to sell it. In how many cases do they ask their clients to revamp the product? Marketing is about all the 4 Ps and not just Promotion. Agencies should start with the product and not the advertising, and also explore opportunities to help clients during actual sale and post-sale phases.

So, are your agencies responding to the new environment in all the above ways? If not, you may want to re-think the way you have been engaging with them.

Last week, Rick Karlton over at the Sales Executive Council wrote a great post on the role iPads and other tablet computers are playing in re-shaping the pharma marketing landscape. Playing off a Wall Street Journal article from a few months back that posited a link between increasing tablet use and declining sales employment in the pharma space, Rick makes the point that fewer salespeople are almost certainly a function of a slowing R&D pipeline, not technology.

Since a key role of pharmaceutical salespeople is product education, it’s expected that the relative importance of Sales might decrease as pipelines slow. But the relative importance of Marketing only increases as fewer products enter the market, and marketers will need a way to reach healthcare professionals with a potentially-smaller sales staff.

Given the restraints that pharma marketers are likely to face, there is absolutely a role for an intimately-personal technology like tablets to step into the void. But marketers should be careful not lose sight of how doctors trust various channels.

Medical professionals, when choosing a medication for their patients, are making very important decisions – occasionally, even life-and-death ones – and they’re inevitably going to respond better to information sources they can trust. Stepping into MLC’s recent B2C work, we found that branded information channels tend to be less trusted by consumers – a big reason why brands like JC Penney are relying on third-party advisors as opposed to information from the brand.

Now: doctors are a more sophisticated lot than the broader pool of consumers, but although they know that Adam the Salesperson works for AstraZeneca and Shirley the Salesperson works for Sanofi, at some margin they’re likely to view the sales folks they have regular contact with as trusted advisors. By replacing regular human sales contact with technological solutions, pharma brands run the risk of replacing a higher-trust channel with a lower-trust alternative.

So, what’s the solution? Pharma brands interested in trying out iPad and other tablet apps should be considering a two-tiered strategy. First, one “level” of applications should act as a complement to the human sales and product education process. Cool animations of things like pathophsyiological and pharmacological processes and device functions illustrate can illustrate key messages. The second level of apps should fit directly into medical workflows: everything from patient evaluation, diagnosis and education to records-keeping and insurance. Ideally they’d facilitate doctor-to-doctor networking and interactions – imagine calling in a specialist via Facetime, for instance.

For decades, pharma salespeople have played a key role in physician education and in driving new medication adaption, and you can’t expect that to change overnight. But pharma companies can remain relevant by fitting their marketing efforts into modern medical workflows, and becoming not only a trusted advisor, but a key facilitator in getting the job done.

Indeed, given the inherent industry advantage, many manufacturers may feel entitled to think themselves relatively secure. But when customers are asked questions that entail comparison between manufacturers of the same industry, they become indecisive, delay contacting suppliers and are swayed by details that suppliers overlook. From a competitive angle, here’s how things shape up:

Your customers don’t think it’s hard to switch suppliers, in other words, they fail to see much of the difference between your offering and that of others’. They will call you only when they’re about 60% through the whole process, assuming that you make it into their consideration set to start with.

Your customers are price sensitive, as a result, 48% of manufacturers’ customers used RFP in their purchase process (the figure for service is 39%). And the top reason to issue RFPs? To compare prices.

Your customers are not in an exclusive relationship with you. They consider just as many suppliers as service buyers in the final stage of purchase.  Even though the winning manufacturers have on average known their customers for about 7.5 years, 25% of the time they lose to a younger, newer competitor.

Now while the win patterns are good news for challengers and bad news for incumbents, most companies wear these two hats at the same time. Fortunately, our data shows that there are levers you can pull to keep existing customers while attracting more. The key is to change the way you present information. Many companies settle for “boring”, just being interesting will put you one step ahead. Service providers and your progressive peers have had much practice at positioning complex offerings interestingly and you should try the same:

Engage customers by tailoring information. Sometimes you do the tailoring, other times you simply build the environment enabling a personalized experience. Hill-Rom, a medical devices manufacturer addresses customers’ differing needs through their Experiential Teaching Trade Show Booth, where customers experience the inconveniences faced by critically ill patients and the Progressive Mobility Solution Hill-Rom offers. This exercise support momentum-building by highlighting Hill-Rom’s unique strength while making an abstract concept concrete. Customers’ takeaways differ, but leave similarly impressed.

Make better use of cases and be thought provoking by linking to the customer’s end goal. Customers are much more receptive to feedback from their peers, especially those who resemble themselves.  Qwest constructed an authentic testimonial video library using the “90/10” rule – 90% of content is positive and 10% is negative. The short videos are neither scripted nor edited and are organized by industry, product, buyer role, business need and geography. With additional integration into their CRM system, Qwest is able to dramatically reduce sales reps’ effort while providing prospects with better, more targeted information.

One of the coolest parts of this year’s research into consumer process was getting to speak with a number of vendors and companies that do just that, using a process called agent-based modeling. Agent-based models are mathematically-created worlds populated by mathematically-created people, who are then exposed to a certain stimulus. In marketing, that stimulus is usually a message or marcom effort; other disciplines use diseases or changes in the economy.

The end result is a plausible estimate of the effects of a marketing campaign on a customer base – something that can be used to test proposed marketing plans to see which delivers the highest returns. For B2Cs, the “agents” can be consumers, for B2Bs, agent-based models can estimate the effect of marketing campaigns on corporate buying centers and within broad discipline areas.

MLC members, to learn how agent-based modeling works in marketing planning, please visit the members-only insight page we’ve put together on the subject, and register for our September 15 webinar, featuring MLC researchers and ThinkVine, a vendor in the modeling space.

The latest tech trend that is generating a lot of buzz among marketers is “marketing automation.”  For the uninitiated, in the B2B world, marketing automation is the umbrella name given to the software and other technology tools that allow marketers to systematize and mechanize tasks like lead generation, lead nurturing, and lead qualification.  It can be as simple as automatically sending out a segment-focused monthly newsletter to a list of prospects and current customers and as sophisticated as an algorithmic model that segments, targets, and scores potential leads based on a combination of tracked web behaviors and information collected through web-forms.

It isn’t a new topic, per se, but it is getting a lot more attention from B2Bs these days as they realize they have a lot more of the funnel to cover than ever before.  Because of this groundswell, marketing automation is the topic I’ll be spending most of my working hours thinking about, researching, and opining on for the next few months.  Early research on the topic has already raised a few red flags in my mind.  Namely, that some folks are looking to marketing automation as a miracle solution to all that ails them.  As is usually the case with a technology tool, the most important ingredients for success are the people and processes that plug into the technology, not the technology itself.  Despite its moniker, marketing automation requires a huge amount of human intelligence that I fear many may be unprepared for.

Though marketing automation is an emerging topic, we do already have some materials to help you out while we flesh out our coverage.

First, a throwback to 2001, when CRM systems were just gaining popularity, MLC did a deep dive into best practices for implementing such a system.  It’s 60 pages and not exactly a beach read, but many of its lessons are transferable to the challenges faced by those thinking about implementing marketing automation systems today.  Among the 10 key lessons were:

• Be Explicit About Program Objectives
• Focus on Existing Customer “Points of Pain”
• Ensure Cross-Functional Ownership
• Aggressively Encourage New System Adoption
• Elevate People and Process Changes to Highest Priority
• Set and Track Quantitative Measures Without Fail

Second, a June 2010 webinar during which we had the great privilege of picking the brains of two marketing automation experts.  The most common challenges they see companies struggling with (that can be either amplified or ameliorated with marketing automation):

• Sales complaining that the leads they receive from Marketing are not qualified
• Marketing complaining that Sales fails to follow up on qualified leads in a timely and effective manner
• Sales and Marketing disagreeing over the effectiveness of marketing activities in contributing to overall sales

We’ll be tackling these issues and more in the coming months.  Stay tuned for diagnostic tools, benchmarks, and best practices.

MLC members – is marketing automation on your mind?  What has been the hardest part of getting a new system implemented?  Where could you most use our help?  Email me with your thoughts or to set up a call.

“Doing a Domino’s” entered the vernacular following Domino’s self-critical 2010 campaign, which acknowledged that its pizza “taste[d] like cardboard” and promised to improve the taste.

Domino’s mea culpa coincided with a 14% revenue boost, a 10+ percentage point increase in taste perceptions, a 613% growth in Facebook fans, and a 83% share price increase.

Could admitting your failings do the same thing for you?  MLC’s 2011 research on purchase drivers suggests so.

Our survey of 7000+ consumers found that decision simplicity – i.e., ease of trusting, understanding, and weighing information – is the biggest driver of follow through on intended purchase, repurchase, and recommendation (bigger even than brand affinity and engagement).  Brands with more credible information have far ‘stickier’ consumers than others (i.e., less attrition).

A great way to boost consumer trust is to acknowledge your weaknesses; especially those that consumers are already fully aware of (dodging the topic is suspect).  This wins you the credibility needed to talk about your strengths.  Of course, highlighting your flaws is a pretty risky strategy though – and needs to be approached the right way.

Dennis Maloney, Domino’s Pizza’s VP Multimedia Marketing, gave a great talk at the ANA’s Digital and Social Conference about how Domino’s iconoclastic campaign came about.   Here are a few of my biggest takeaways:

Only focus on widely-acknowledged flaws that can be addressed. And only when your strengths are already well-known.

Domino’s Insights group discovered that consumers perceived Domino’s to be:

• Best at service/ fast delivery (versus its five main U.S. rivals), but
• Worst at taste

It wasn’t ranked middle on taste – it was bottom – and across the board (not just according to a few customer segments). Luckily, taste is something that can be easily changed.

Instead of creating more ads about Domino’s great service, which consumers already knew about, Domino’s took a counter-intuitive approach.  They led with the negative, but promised to right their wrongs. They showed that they’d listened, they admitted to being wrong, and they committed to investing in improvements.

Get consumers to confirm that you have changed. Once Domino’s had changed their recipe, it wasn’t enough for them to assert that their pizza was better.  “New and improved” has been an empty claim for decades. To be credible, Domino’s needed consumers do the talking for them.  First, they added unfiltered consumer tweets about the new recipe to their homepage.  Second, they promised not to doctor photos of the new pizzas – because they looked good enough naturally. Instead, they asked consumers to send in their own photos.

Demonstrate a continued commitment to listening and reacting to negative feedback. Once a brand positions itself as honest and transparent, consumers hold it to a higher standard.  As such, Domino’s had to acknowledge negative feedback received in the call for consumer tweets and photos following the change.  Instead of filling ads with all the flattering photos consumers had sent (see image left), they focused on one of the negative images a consumer had sent it (see image right).  Once again, they acknowledged a mistake (careless delivery) and committed to trying to do better.

Humanize your apology. Domino’s had its CEO to apologize and commit to making changes on TV commercials.  By personalizing the mistake, it seems more human, and consumers are more likely to be forgiving.

MLC members, to learn more about boosting trust in your messages, please attend our 2011 meeting series.

A few years back, MLC took a look at the biggest drivers of motivation among hourly frontline employees in the retail space, and what we found was interesting: contrary to the assumptions of a lot of managers, employee satisfaction and motivation wasn’t mostly driven by compensation. In fact, it was soft factors – things like perceived importance and connection to organizational strategy and having the right tools to do the job – that were the biggest drivers of performance.

We’ve selected a few of the most interesting findings below. For the whole list of motivation drivers, please visit the full report, Engaging Frontline Staff.

They see a connection between work and organizational strategy. According to our findings, this is one of the biggest levers employers have to drive motivation in frontline staff. Explicitly making the connection between an employee’s work and broader organizational strategy – for instance, in internal communications or reviews – is one of the easiest ways to immediately boost satisfaction and drive in your employees.

Why? It should be obvious. No one wants to be a cog in a machine they know nothing about, and everyone wants to be part of something bigger than themselves. Making the connection between the day-to-day work of employees and where the organization is going over a longer term is one way to make employees feel valued.

Job understanding and proper resources. Another extremely effective driver of hourly employee performance is simply giving employees the tools to succeed. Giving employees the tools to understand how to complete projects is one of the best ways to increase satisfaction, with making necessary information available, providing sufficient tools and resources, sufficient time to complete tasks and adequate staffing coming a close second.

Most employees want to do a good job, and are demotivated by situations where it’s difficult or impossible to succeed.

Rewards commensurate with effort. Employees want and expect rewards for their work – but those rewards don’t have to be monetary. The biggest driver is personal development – are the projects employees work on perceived as beneficial to themselves or their long-term career? Does the job fit with their personality or expectations? Do they have the opportunity to work on things they do best, or the opportunity for promotion and recognition?

If your frontline staff feels overworked and underappreciated, don’t expect too much headway on your marketing initiatives at that level.

Effective managers. Manager quality is one of the most impactful elements of a motivated workforce. Those who are effective at project management, on average, boosted their team’s discretionary effort by 30%, while those who managed individuals and the team effectively raised discretionary effort by around 28%. Simply being personable and approachable helps, too: personal characteristics can raise discretionary effort by a further 28%.

Training your managers might be one of the easiest ways to ensure your frontline staff is motivated to execute on marketing initiatives.

A strong corporate culture. Corporate culture matters nearly as much to hourly employees as it does to salaried staff. Attributes like strong internal communication, a reputation of integrity, and a culture of innovation can drive discretionary effort by 30% or more. Employees also want a promise of the future – a culture of risk-taking and opportunity, and a strong future orientation in communications.

MLC members, for the full report, please click here.

As part of our B2B research this year, we surveyed over 2,000 B2B customers across a wide range of industries.  A major part of this study was the channels these customers use and are influenced by when researching business purchases.  Not surprisingly, the sales conversation and the supplier website were the two most influential sources.

More interesting to us was how the various channels grouped together when we plotted them in a 2 x 2 matrix with influence on the vertical axis and variability of influence on the horizontal (see below).  For those who aren’t familiar, variability or variance is a measure of how far a set of numbers are spread out from each other.  So two sources might both rank a “6” in terms of influence, but Source A may get that score because everyone rated it a 4, 5, or 6 in equal measure (low variance), whereas Source B may get that score because some people rated it a 2 and some people rated it an 8 (high variance).  This suggests that some suppliers use Source B really well and others really poorly.

You see three clumps of channels in the matrix:

Emerging: Circled in green, these are newer sources that haven’t yet hit the mainstream.  They currently have low influence and low variability because very few B2Bs are using them at all.  While this is good news for some B2Bs who are worried that they haven’t yet figure out social media, it also suggests the chance for first mover advantage.  Do something truly innovative with social media or blogs and you can own the space as the definitive source.

Tried-But-Not-True:  Circled in tan are three very traditional marketing channels with low-to-medium influence and variability.  These channels have been around for a long time and are used by virtually every supplier – yet it seems no one is employing them with much success.  Customers generally don’t rate them very highly, perhaps suggesting it is time to shift some resources away from these channels (or at least relegate them to pure awareness-building tools).

Opportunity: Highlighted in the blue oval, this group is a mix some newer channels with some more traditional ones.  Characterized by medium-to-high influence and high variability, these sources are ones that many suppliers are using well, but many are not leveraging to their full potential.  Note the interactive/conversational nature of many of these channels.  Additional resources here could net big returns.

At this point, this data is more food for thought than justification for a total marketing mix overhaul, but hopefully it can provide some guidance to B2Bs trying to figure out which channels they should prioritize.  One caveat, so far, we haven’t found much in the data about the impact of channels on any critical post-purchase outcomes (i.e. those who do research in a particular channel or set of channels are no more or less satisfied or likely to recommend than anyone else).  Ultimately, it is more what you say than where you say it.  But in a few years the dynamic might be different.

MLC members, want to learn more about the research that led us to these results and, more importantly, the innovative practices the Council has uncovered to help you solve the most pressing B2B Marketing challenges?  Register for our Annual Executive Retreat, “Responding to Heightened B2B Customer Uncertainty.”

So what are B2Bs to do?  As Ana mentioned, one of the toughest parts of managing B2B word of mouth is ensuring the good-to-bad ratio falls in the supplier’s favor given how much more memorable complaints are than compliments.  In the B2C world, bad word-of-mouth is not only more memorable, it is also simply more prevalent.  A recent study by COLLOQUY found that 75% of adults share negative opinions about products and services with friends and family but only 42% do the same when they have a great experience.  One quarter (26%) of respondents flat out admit they are more likely to share a bad story than a good one.  COLLOQUY deems them “Madvocates.”

One strategy to up the “good” side of the ratio might be to identify those most apt to share positive stories through research and segmentation and target them with incentives to encourage more sharing of positive experiences.  Unfortunately, according to COLLOQUY, this approach has one big flaw – there is a big overlap between those who share positive stories and those who share negative ones.  Even among those who the organization defines as “WOM Champions” (consumers who are especially “loyal to, engaged with, and willing to share recommendations” about a brand), 31% admit they are more apt to share bad experiences than good.  The implication here: don’t tick off consumers who love you.  Disappointing your most loyal and engaged customers is worse than disappointing a regular Joe or Jane because they don’t take it lying down.

The truth is, some people are just more apt to share than others and be it good news or bad, they spread it.  The problem gets even more complicated when we take the sharing from dinner table and “water cooler” conversations to online mediums.  The vast majority of Internet users are “lurkers,” that is, people who just consume information and do not participate in its creation.  In 2006, usability guru Jakob Nielsen introduced the “90-9-1” rule: 90% of Internet users lurk, 9% contribute infrequently, and just 1% contribute frequently.  Put another way, 90% of web postings come from just 1% of users.  Undoubtedly those numbers have shifted a bit in the last 5 years as social networking and review sites have increased in popularity.  But even if there was a 5x increase in active participation, the numbers would still be dismally low.

To my knowledge there are not any good stats of this ilk about B2B customers and their propensity to share information.  But it makes sense that the same themes hold true: that bad experiences may be shared more commonly than good and that certain people are just more prone to giving feedback, writing reviews, participating in forums, and serving as references than others.  Nonetheless, it is critical for B2Bs to work harder to encourage creation of and enable access to word-of-mouth information.  B2B customers are also consumers and there is no brick wall separating their two “selves.”  The way they gather information and make decisions in their personal lives influences the way they do it in their business lives.

B2B marketers – I’d love to set up a conversation to discuss what you are doing to encourage positive word-of-mouth about your products, services, and solutions.  Email me if you have 30 minutes in the coming weeks.  Also, remember to register for our Executive Meeting where we’ll discuss the challenge in greater depth and preview some possible solutions.  We also have a few international dates – shoot me an email for more info.

(The following is a guest post from David Sroka, President and CEO of Point of Reference, a customer referral program provider.)

The marketing department in B2B firms is typically responsible for producing “evidence” of satisfied customers in the form of case studies, quotes, press releases and videos. This customer content has plenty of uses and users, but arguably, the heaviest consumer is the sales force. Like other marketing “investments,” there’s an imperative to make decisions that garner the biggest bang for the buck. So how should the marketing department decide how to spend its finite budget when it comes to sales-accelerating assets like customer content? Start by considering the current range of available content relative to where it’s needed in the sales cycle. For instance, press releases and one-page success stories are perfectly appropriate early on in the sales cycle, but less meaningful and effective in the middle to later stages.  Full ROI case studies, often 5-10 pages in length, are overkill for the early stages when buyers are merely tire kicking.

To provide a framework for this approach we created a tool to help you link various content types to various sales stages:

Regardless of the sales methodology used by your organization (Miller Heiman, SPIN, etc.), the concept is the same. This graphic represents the full spectrum of the sales cycle (early stage in the lower left, late stage in upper right) and assigns both granularity and candor of various types of content. Based on the average form/format of the various content types such as case studies, press releases and video testimonials, we’ve placed them where they are most likely be used because it’s where prospective customers are most likely to find them relevant.

The goal of the following exercise is to help level-up the largest percentage of the sales team that isn’t in the top performer group by making them more effective at providing buyers what they need, when they need it. What would the impact be to the company if a mere 15-20% of the mediocre performers moved up a notch? Big!

With that concept in mind, here are five steps for fine tuning your content production strategy:

1. Survey the sales team- find out where they’re using existing content types in their sales cycles today, and where there are gaps in what they need
2. Inventory the current customer content library
3. Identify historical gaps in both types of content and sales stage coverage
4. Factor in future needs (e.g., new product launches, new target industries, etc.) for the next 6-12 months
5. Set production goals to fill the gaps and meet demand

Another important consideration in your strategy should be managing the currency of your content. Regardless of how good of a job you’ve done mapping to the sales cycle, if the content is outdated (e.g., references retired products, historical economic conditions mentioned, etc.) it simply won’t get used. So set a firm review and archive policy as part of your end goal.

Things change. Be prepared to re-survey the sales team about every 6 months to determine how you’re executing on the gap filling exercise. As you take care of the foundational gaps you can become more specific when asking about needs (e.g., specific industry or product segments). Over time you’ll find that your investment in content development will be more relevant and better utilized and that translates into a boost to the top line.

MLC members, for a great example of a successful customer reference program, check out how Qwest created an online database of video and audio customer testimonials – shaving 4 days and 20 FTEs off the sales cycle in the process.

What can moscato teach us about marketing planning and skillsets of socially-savvy marketers?   More than you might imagine.

This sweet wine sourced from the Muscat grape was a rounding error on annual wine sales in the US.

Until Drake came along.

“Of the Sir Francis variety?” you ask.

No.

Drake is a hip-hop artist.  He rapped “clap clap bravo, lobster and shrimp and a glass of moscato” (you’d find this poetry in the single entitled “Do It Now”, of course).   And not long thereafter, a spark became a moscato wildfire, as you can see from the Google Analytics chart here.

Sales of moscato spiked 76% in the last year—not bad when overall wine sales were flat.

Looking back a year ago, that’s a pretty big opportunity for a wine marketer sitting on a sleepy moscato brand.  But it would take keen listening and a marketing organization with some surge capacity to take advantage of the wildfire.

In  “Why You Need a New Media Ringmaster” (appearing in the latest issue of Harvard Business Review), I wrote about the three traits most distinguishing a new breed of social media marketer from more traditional marketers.  One of those traits is “high decision clock speed”.  New Media Ringmasters don’t just make quick decisions themselves—they set their organizations up to operate on a much faster cycle time.

That starts with establishing an enterprise listening system that is comprehensive.  Further, it means spreading listening tentacles into the proper workflows around the organization (not just in marketing), to ensure speedy response on smaller scale issues.  As important, for larger opportunities, it requires marketing leaders to think differently about resourcing marketing initiatives. There’s an increasing need for marketers to maintain more “surge” capacity—both within marketing and among key agency partners—so their brands can capitalize on flash opportunities, like the Drake moscato mention, before competitors do.

We’d love to hear from you—what are you or your marketing team doing to increase your decision clock speed?  How are you building surge capacity into your 2011 marketing plan?  By the way, these are among the issues that MLC will take up in its 2011 research.  Send me a note if you’d like to talk with us about this (pspenner@executiveboard.com).

For another great example of a flash opportunity, see Bob Nunn’s blog on “Movember”—yes, it’s the perennial surge in popularity of mustaches around November, and how major mustache grooming brands seem to be a day late and two bits short in taking advantage of it.  Or, if you haven’t read it, get yourself a complimentary copy of “Why You Need a New Media Ringmaster” .

Also, be sure to check out our upgraded marketing planning solution. MarkPlan™ 2010 is a software suite that leads you through a series of well defined steps and proven templates for building strategic marketing plans that fit your organization.  Think of it as a TurboTax wizard that will help you generate your marketing plan.  Learn More.

Seinfeld

It’s true. Seinfeld was noted by critics for its unique focus on mundane human interactions, a large number of which included buying and selling stuff. From George’s Russian hat to the muffin tops to the famous J. Peterman catalogue, Seinfeld featured consumerism as a key element in the plotlines of many episodes, the result of which is a show that’s rich in lessons for marketers.

Here’s a look at a few key marketing strategies explored in Seinfeld:

1) Attack your customers’ pain points.

Everyone knows that muffin “stumps” – the bland, dried-out part of the muffin that’s baked inside the muffin cups – are the worst part about this flavorful breakfast treat. Coping strategies vary – impulsive muffin eaters, like me, tend to eat the top then suffer through the stump; while others take the good with the bad and take more even bites. But in any case, muffin stumps are a problem to be dealt with. That’s why Elaine’s idea was so genius:

So, everyone knows about the muffin stump pain point, but not many understand the pain points of, say, the fashion industry. MLC members, see how FedEx created consumer-centric marketing collateral aimed directly at their customers’ logistics challenges.

2) Do a little subversive branding.

Earlier this year, our partners at Iconoculture talked about the power of “subversive branding” – giving consumers the idea that purchasing a product signals a little anger and rejection of mainstream values. In a time (especially in America) with no shortage of frustration, it just might be a winning strategy.

Take a look at what happens in Seinfeld when Jerry and Kramer’s apartment building mandates low-flow showerheads:

Okay, so part of this black market frenzy has to do with addressing the pain point of pitiful showers. But there’s a little anti-establishment sentiment in there, too. MLC members, for more on subversive branding, check out the webinar presented by Iconoculture this summer.

3) Erect barriers to entry.

It’s Econ 101 – if you want to increase your margin, one of the best things you can do is set up barriers to entry into your market. Here, Kramer and his lawyer, Jackie Chiles, discuss the barriers to entry in movie theater concessions; namely, that no one may bring in outside food.

Barriers to entry don’t have to be heavy-handed prohibitions on competing products, though. Some of the best companies just do it by consistently delivering outstanding products and services, making smart enterprises think twice before challenging them on their turf.

4) Decrease consumer effort.

Have you ever considered that among your customers’ pain points (like those we discussed above) can be their interactions with you? Research conducted by our sister program, the Customer Contact Council, indicates that successful enterprises keep their customers happy not by “delighting” them, but by consistently reducing the effort required to buy products and get customer service.

Hopefully your customers don’t end up like Elaine – jaded by effort required on their part:

5) Emphasize exclusivity.

Exclusivity’s long been a key part of the branding toolkit, especially for B2C brands. Enforced scarcity, particularly in the case of non-essential, luxury goods, often leads to heightened brand perception and higher margins.

It’s not exactly the same as the famous “Soup Nazi”, but the chef’s insistence on strict soup-ordering protocol is an artificial restriction on supply, leading consumers to crave the delicious soup even more:

MLC members, for more on positioning luxury goods like incredible crab bisque, check out our research brief.

American Idol has dominated the airwaves for a number of years now.  While Simon Cowell’s outrageous lambasting of singing hopefuls is a draw for some, sales reps and marketers should pay attention for another (somewhat surprising) reason: Idol’s crowdsourcing of talent through multi-round competition is a powerful way to improve the delivery of your sales pitch. Sound far-fetched?  Stay tuned…

B2B marketers pay close attention to how customers consume the content they produce, often engineering a learning journey so customers gradually internalize how the supplier’s unique benefits solve major customer pain points.  This journey includes the sales conversation between reps and customers, which we’ve found should follow a specific sequence that builds emotional commitment to the supplier’s vision and solution.  The following three principles should serve as the backbone to any sales pitch that Marketing creates:

1. Provoke: Reframe the customer’s initial assumptions or expose areas of underappreciated risk.
2. Expose: Break down the underlying problems behind this previously unknown or underappreciated issue and show how they impact the customer’s business objectives.
3. Resolve: Build back the customer’s confidence with an eye to how your products and services solve the exposed issue.

Of course, Marketing doesn’t operate in a vacuum, and the effectiveness of the pitch rests squarely on the shoulders of the reps who actually have to deliver it … but not all reps are created equal.  The ability to deliver the same pitch while setting the appropriate tone will likely vary from rep to rep, and Marketing needs to look for ways to hardwire certain delivery cadences into the pitch.

Enter American Idol. The team at Neopost (global supplier of mailing systems, postage scales, logistics services) came up with a clever way to socialize to the broader sales force what elements of a well-executed pitch actually look like.  Marketing provides reps with a standardized set of raw materials to go off and create their best version of a pitch that reframes and challenges customer assumptions.  Neopost then hosts its very own “Neo-Idol”: a multi-round competition in which reps submit a short video of their very best pitch for online display.

Each rep views more than 30 peer pitches, voting on which one should progress to the following rounds (in a slight departure from American Idol format, there is no live debate/mockery based on a rep’s performance … sorry all you Simon fans out there).  By exposing reps to a variety of pitches throughout the competition, Marketing “engineers” message agility since reps have now seen a number of compelling ways to present Neopost insights.  And while Neo-Idol may not result in a record contract, it does produce a rep-vetted pitch that allows for customization within the guardrails of what reps themselves have expressed as the makings of a successful sales interaction.

MLC members: access a number of tools and templates to help you build a more effective sales pitch; or, learn more about Neo-Idol and other ways to deliver insight at one of our upcoming executive networking sessions.

Now they’ve gone and outdone themselves, with a social media campaign that might be better than the TV spots. Last week, our Old Spice hero began making personalized videos for bloggers, Web celebrities, and a few average web users. Notable examples include a get-well message to Digg founder Kevin Rose, political punditry in response to George Stephanopolous, and a hilarious response to the Yahoo! Answers question “How many teeth do sharks have?”.

The videos have been a smash hit, with PCWorld calling them “the most brilliant viral ad campaign of its time”.  Total views on Old Spice’s YouTube channel are over 100 million, while Google Trends reports a huge spike in searches for Old Spice:

Click Image to Enlarge

At MLC, we never counsel members to shoot for virality in their online campaigns. What we’ve learned from discussions with countless B2C marketers is that you can check all the “viral” boxes and still have a campaign that flops. There are simply too many variables in what achieves currency on the web for any marketer to accurately predict that a campaign will go viral.

But, the subset of campaigns that do go viral do have a few of these things in common:

1) Cash. Someone may have told you that online campaigns are supposed to be cheap. Cheaper than TV, maybe, but Old Spice is spending some fairly serious money on this initiative. “The Man Your Man Could Smell Like” was a sponsored trend on Twitter and the company is paying to get its branding on its YouTube channel – not to mention paying Mustafa and the video crew for long days of shooting.

2) Ego. By aiming most of the videos squarely at online influencers like Kevin Rose, Ashton Kutcher, and Ellen DeGeneres, as well as blogs like Gizmodo, Old Spice ensured that they’d have ample access to the huge network of followers commanded by those celebrities and outlets. But they didn’t stop at focusing on big names – they shot videos for all kinds of social networking users. They also engaged the ego of communities – canvassing Reddit and the notorious 4-Chan (absolutely not safe for work) for potential questions well before shooting.

3) Anticipation. Old Spice built anticipation into the campaign in a few ways – first, the quick turnaround of the videos meant was a carrot for repeat visitors; second, there was no pattern to the responses, so a reply to Ashton Kutcher might be followed by one to WebLover222; and third, the videos themselves were so wacky that users couldn’t wait to see what would come next.

4) Paradigm Shift. The campaign challenges the way people think about several things, in the process changing the way people think about the Old Spice brand. Everything from the absurd monologues to the production-line nature of the shoot to the idea of responding to random web users leads people to think differently about Old Spice.

Like I said above – you can hit all these marks and still have a flop on your hands; the vagaries of the digital market are still too much for marketers to reliably understand. But its good to know that there are some common threads – and at least a little predictability – in what makes a campaign viral.

By Whitney Satin

MLC has long extolled the virtues of “commercial teaching”—i.e., providing insight to customers in a way that makes them better appreciate your distinct value.  Despite our obvious marketing bent, our past research has perhaps inadvertently implied that the delivery of these insights comes down to a “moment of truth” between sales reps and the customer.  We’ve tended to focus on ways that Marketing can support Sales in this interaction, everything from working together to craft a teaching sales pitch to tools that reinforce key teaching points after the rep has performed the heaving lifting.

The rep interaction undoubtedly plays a crucial role in many purchase decisions; in fact our sister program, the Sales Executive Council, has put plenty of time into understanding the specific rep skills and manager characteristics that make this teaching effort most effective.

But we can’t assume that this face-to-face scenario is the only place to deliver commercial teaching.  The proliferation and democratization of information puts business insights at our customers’ fingertips and, more critically, moves control over the time and place of delivering those insights from the supplier to the customer. 

Suddenly, assuming that the rep is the sole channel for insight exchange seems naïve at best.  Yes, blowing the customer’s mind in that conversation leaves a huge impression and scores lots of loyalty brownie points, but we need to consider the range of scenarios during which commercial teaching can be delivered.  Web sites, merchandisers, the tradeshow circuit … all fair game as far as commercial teaching outlets go.

As marketers, we can’t control the paths through which customers consume the content that’s out there.  But we sure can control the message they consume.  Everything should be geared toward delivering insight.  If customers under-appreciate the costs associated with truck-driver attrition and we can help contain that cost, as was the case for Volvo trucks, then this should be the message championed across the range of touchpoints in the customer buying process.  At a minimum this reinforces the message that our reps deliver, but more critically this ensures that customers “get” our insight without having to commit to a sales call.

Marketers can obviously coordinate teaching messages across the touchpoints it owns, but we’re seeing a few companies starting their teaching efforts in touchpoints that aren’t even owned by the organization.  Touchpoints like blogs, peer-to-peer online communities, and other social platforms.  The idea here is to seek out those naturally occurring customer watering holes and start planting the seeds of your insight.  Sprinkling insight before customers even enter the buying funnel essentially draws highly qualified prospects in … and potentially accelerates the sales cycle.

MLC members: join your marketing peers at one of our executive sessions to learn about Marketing’s role in an insight-led organization. We’ll share best-in-class approaches to) designing portfolios of insight-led content, 2) tapping into and “redirecting” market and customer conversations, and 3) collaborating with Sales to generate customer momentum through the buying process.

As a very first step, companies should limit downside risks by implementing a social media policy (MLC members, click here for tips and examples).  In addition to defensive guardrails, companies should also offer simple guidelines or training to help engaged employees make the best use of social media.

Beyond this, now is a good time to redouble efforts to measure and boost employee engagement. Indeed, 46% of executives agree that surveying employee satisfaction and acting on the results is the best way to protect online reputation.

Today, a number of companies use the Net Promoter Score® (NPS) internally to measure employees’ likelihood to recommend products/services to their friends or family on a scale of 1 to 10 (more info here). Although originally designed to measure customers’ willingness to recommend a product/service, many companies have recognized the NPS as a quick way to gauge employee engagement and simplify internal satisfaction surveys (though companies should note that employee NPS scores may be lower than customer scores).

Given the rise of social media, we see a host of new uses for Employee NPS. By combining the question “How likely are you to recommend our products or services to your friends or family?” with a few demographic questions, (e.g., location, function, work arrangement, tenure, age, gender,), companies can use the data to:

1)     Identify teams/regions with high NPS scores and drive social media uptake in those areas of the company

2)     Identify teams/regions with low NPS scores for extra guidance on social media policies (e.g., obligatory training and sign-off on the policy)

3)     Isolate environmental drivers of engagement and use that knowledge to boost engagement, thus increasing positive employee involvement in social media

MLC members, see how leading companies manage employee advocacy and learn about the five major components of a successful Net Promoter Score strategy.

I’m reminded of a recent conversation with business owners at a software company, who developed a new way of thinking about certain data problems.  Though customers generally agreed that this was a better way to handle the data problems, the solution spanned many departments, and the software company couldn’t convince customers that the hypothetical returns were worth the extra coordination efforts. Failure to generate a positive emotional response likely explains our non-finding with regards to the effectiveness of the ROI pitch.

It’s not that customers aren’t influenced by ROI calculations; it’s just that few people make complex business decisions based entirely on somebody else’s ROI calculations. Senior buyers are pretty savvy people – they know their own ability to derive a set of returns that will look sufficiently attractive. They also likely recognize that they are constantly pitched things that they are already inclined to like. In other words, buyers become perfectly cynical about value at the point at which the entire conversation becomes dominated by claims about value. It’s a subtle notion, but the hypothetical existence of value simply doesn’t challenge the customer.

This finding has profound implications for how marketers need to think about building the messaging and reinforces many of our findings around commercial teaching:

1)      Challenge concrete customers assumptions. Everybody already assumes that we offer some hypothetical value; thus most people aren’t going to be very excited by the idea that you have value to deliver. You’d never be talking to them if they thought otherwise.

2)      Lead to the value and unique strengths offered. The sales force still needs perspective on how the value is derived, but the calculations should be substantially built on how the customer has come to conceive of the problem.  Ideally, Marketing shows Sales how to help the customer build this for themselves.

3)      Use calculations to show why customers should care. Numbers can help you prove that the problems identified are worthy of the customer’s time. The absolute dollar amount, in other words, has to be worth the opportunity cost of solving that particular problem.

4)      Show the sales force how to think about the sale. Show reps your ROI calculations to signal that the thing has been thought out and that it’s worthy of consideration, but make sure they end with the ROI pitch and that they don’t just start with it.

MLC Members, access our tools and templates to help hardwire the connections between your differentiators and customer emotions and pain points.