Reputation to Revenue

Doing the right thing: Three quick thoughts

Not to be all doom and gloom or anything, but it's hard to talk to folks these days and not get caught up in the economic anxiety and client pullbacks that everyone is dealing with. In that context, three quick thoughts on doing the right thing:

• For clients: It's even more important now to go the extra mile to help out, even if this means advising them to cut back with you or look elsewhere for help. Seth Godin's blog today uses a shoe store story to illustrate the point: If you don't have the right size for a customer, help him find a store that does even if it is a competitor. Pushing him toward the wrong size will only backfire, and helping him out will generate the good will, stories, and referrals that we all need to succeed.
• For prospects: Run fast from any marketing tactic that suggests the barest hint of deception. Buyers in a bad mood jump even faster on attempts to fool them, and have more energy to spread the bad word -- which is then amplified by the online watchdogs. A recent MarketingProfs newsletter tells the tale of how Stokefire, a naming company, sniffed out deceptive blogging practices from a new competitor, blew the whistle, and watched the ensuing storm. As Tate Linden of Stokefire notes, "your brand is who you are when you think no one is looking." If you wouldn't be proud to have the tactic highlighted publicly to prospects and clients alike, don't do it!
• For employees: Communicate openly and aggressively about what's happening with the business, including possible layoffs or other cutbacks. Everyone is talking about it anyway, so being especially transparent lessens the rumor mill and inspires a bit more trust in company leadership. Communications coach Carmine Gallo recalls his own bad experience after 9/11 as a useful intro to some helpful tips in BusinessWeek. To which I would only add that how you deal with any required layoffs is equally critical. Your former colleagues will tell their stories far and wide as soon as they are laid off; stories of honesty, integrity, and fairness are obviously more helpful, or at least less destructive.

It's easy to let the daily struggle overwhelm our knowledge of what's really right. But much as we'll personally regret any "wrong thing" shortcuts in the days and months to come, we're all too likely to suffer the direct business consequences as well.

A balanced approach for 2009

The normal strategy in a downturn is to hunker down, focus on cost cutting and short-term revenue generation, and ride out the storm until the good times return. Marketers often talk a good game about recessions being great times to invest in marketing because costs are lower, your competitors are scaling back, and you can lay a much stronger foundation for the future. But the reality is that few companies are bold enough to actually do that (if you're working for one of those exceptions, congrats!). As one friend who runs interactive marketing for a large services firm told me, "If my budget next year is flat, I'll be jumping for joy."

Most often, the hunkering down approach for marketing translates into cutting back on "brand  building" and pouring whatever resources are available into lead generation and sales support. This tendency is exacerbated by the fact that relatively few heads of marketing can quantify the value of brand, as noted in a new study by ANA and Interbrand (see BtoB's writeup here). If you can't quantify it, it's a lot harder to justify spending.

The shift to short-term sales is understandable enough, but I see two big problems here, even leaving aside the larger question of investing more in a downturn.

First, for companies selling high value services and solutions, your buyers are finding you much more than you're finding them. If you're not keeping up a steady pace of thought leadership, influencer relations, and general issues-based conversation in the market, you're losing out on critical channels for building interest, inquiries, and referrals that can turn quickly into leads.

Second, your sales people increasingly depend on the company's awareness, reputation, and differentiation for the credibility they need even to get into a preliminary conversation with time-starved prospects. This is especially true when times are tough. Recessions typically accentuate market bifurcation: Business buyers flock either to the lowest price providers or the (perceived) most reliable quality brands. Unless you're willing to go the commodity pricing route, cutting back on brand building can leave you stuck in the uncomfortable middle.

So, looking ahead to 2009 (and even the rest of this quarter), certainly look to minimize unnecessary costs, improve lead generation and sales support activities, and focus that much more on those activities with the biggest return. But please don't equate this with putting brand building aside. A more balanced approach is critical even to shorter-term results, and it will of course put you in better shape when the good times do return. And if you're one of the fortunate few that really can increase investment to take advantage of the downturn, I'd love to hear your story!

Stop experimenting online? I don't think so.

Today's Wall Street Journal suggests (subscription required) that the financial crisis will likely slow down marketing experimentation with new online approaches:

In recent years, marketers have set aside a portion of their ad budgets to experiment with digital technologies such as Web video, mobile phones, gaming and virtual worlds. But with broader economic turmoil reaching Madison Avenue, these "experimental" budgets are among the first to hit the cutting-room floor.

It's not surprising. Marketing typically gets hit first in a downturn, and cutting new and relatively unproven techniques is a natural reaction. As Peter Kim from the agency Dachis tells the Journal, "When we get into the need to drive results, you can't spend money on experiments and hope to keep your job and get your sales goals."

It's not surprising, but I also think it's dead wrong. I'm not advocating tossing money around randomly on flavor of the month tools or techniques. But the implication of stopping experimentation is that the old methods work best. We know that's not true. We know that many traditional approaches don't work at all anymore, or are decreasingly effective. And we can  be pretty sure that some  of the old ways will be even less effective as the economy goes south. Think about live events, for example. Attendance levels, already under stress from event overload, will only get worse as travel budgets freeze up.

In fact, experimentation is the lifeblood of marketing. Websites and email were experimental in the mid-1990s (or later, in many companies), and considered of marginal value at best. Now they are the center of most companies' marketing programs. Blogging was laughed at just a few years ago; now it has entered the business marketing mainstream.

Consider HP's recent stunning success with its 31 Days of the Dragon campaign to promote a new high-end laptop oriented to users focused on entertainment and gaming (see MarketingProfs' great case study for details). Although the  Dragon laptop received good reviews when it first came out last year, sales were disappointing. Rather than just bump up traditional advertising and other promotional efforts, HP instead tried something very different. HP reached out to 31 bloggers with great influence in the target audience, and offered them a deal: We'll give you a full Dragon package, including all sorts of add-ons, software, games, and video -- valued at over $5,000 -- if you organize and promote a giveaway to your readers. The only strings attached were that the bloggers had to give away the package to a reader, and they had to promote all 31 of the contests, not just their own.

The results were tremendous. Left to their own devices, the bloggers all created interesting and different campaigns (which of course helped their own cause), and generated enormous audience participation:

• More than 50 million impressions across 123 countries, including translations into 40+ languages
• More than 25,000 entries, including more than 10,000 videos posted on YouTube and elsewhere
• Massive traffic increases on the participating blogs
• and, ta da...
• 84% increase in sales of the Dragon

All this for an investment of about $250,000, and zero new marketing materials, advertising, or media buys.

Experimentation won't always generate such great results. That's a given. But you'll never know unless you try.

In thinking about a sober approach to online marketing experimentation, especially for B2B services and solutions, here are a few questions to consider:

• Set time and budget. What about setting aside 5 or 10 percent for experimentation, regardless of what happens to the overall budget? That will ensure you can mostly rely on approaches in which you have most confidence, but still have the discipline to regularly try new approaches that may end up paying off substantially.
• Getting closer to customers. Does the new approach help you get closer to your existing customers and uncover useful insight, develop stronger relationships, and/or identify new opportunities?
• Demonstrating expertise. Are there new ways to demonstrate thought leadership and expertise on critical issues in your market?
  
• Providing value. Does the new approach directly help customer and other influencers with useful content or relationships? Does it provide a new way to test our your service or solution?
  
• Measurement. Can you measure results in useful ways? Can you learn something important, even if immediate sales results don't come through?
• Morale. Are there people on your team or in the organization really excited about the new approach? Especially in a downturn, morale matters! 

Of course, these are pretty important questions to ask about any marketing program or technique, not just the experimental ones. You may just find that it's easier to provide good answers with the new approaches than it is with some of the old.

Marketing after the meltdown

Seven years ago, I published an essay on "marketing priorities after September 11." The financial meltdown is obviously different than the terrorist attacks, but both have created a powerful combination of real economic downturn with deep social and psychological anxiety. Now, as then, the ways that companies respond will matter greatly to their chances for weathering the storm.

Looking ahead, it strikes me that the four guideposts I outlined back in September 2001 are just as relevant today.

Business Value. Clients and prospects facing an even tougher economy will only consider solutions that clearly deliver value. We need to review value propositions and emphasize measurable business value to specific clients in specific industries facing specific economic conditions....

Relationships. A more cautious psychological as well as economic climate will likely put an even greater premium on trusted relationships. We should shift more marketing resources toward existing clients and partners. Many will want to circle the wagons with existing providers, thereby creating good opportunities for deeper client engagements.... By the same token, failures to go the extra mile for existing clients will be even more noticeable than usual. Prospects, meanwhile, are less likely to cast a wide net for new providers. Short lists will get shorter and more difficult for newcomers to penetrate.

Communication. Marketers wisely made immediate and extensive communication, internally and externally, a top priority on September 11 and after. It was critical to touch base, offer condolences and assistance, and reassure friends, colleagues, and partners wherever possible. We should continue with a heightened level of communications to help assuage all the obvious concerns in the days and months ahead.... And we would be well served to keep as much of our real, human voices in this effort as possible. One of the most heartening aspects of any disaster is the way in which pretense is dropped. If we can now move forward with less marketing-speak and more human-speak we'll all be better served.

Community. Crises are moments of truth. With little time and much pressure, corporate reactions generally reflect the organization's core values. The wonderful response to September 11 from our industry was a reminder that the community impulse was not just a passing fancy of the late 90s boom. That impulse is likely to gain more importance in the months and years ahead as employees, clients, and other stakeholders seek trusted partners in an increasingly challenging economic and political environment. Building on current relief efforts with a stronger commitment to corporate ethics, social responsibility, and community engagement - and honestly communicating the implementation of that commitment—should therefore yield substantial dividends in terms of loyalty and professional credibility.

One of the first impulses many companies have in the face of economic crisis is simply to cut back on marketing as an "easy" way to reduce costs. In some cases this may be necessary, although I certainly believe it should be a last resort given the marketing's central role in reassuring customers and finding new sources of revenue.

More important, though, is what marketing actually does in times like these, at whatever level of funding. As I wrote back in 2001: "The old rules of marketing are certainly not irrelevant, and the guideposts noted above would be useful anytime. Now, however, the social and psychological impacts of the attacks in the U.S. suggest that a more personal, human-scale, and community-minded approach to marketing will become critical to success." If the meltdown pushes marketing further in this direction, we can at least consider that the storm cloud of the current crisis may have a silver lining.

How big ideas move the market: New research study

A few weeks back, I mentioned that I was joining with The Bloom Group to launch a major study on how to improve the impact of thought leadership marketing in the IT market. I'm please to announce that we have now officially begun to recruit sponsors for the study -- you can see the details and download the prospectus here.

The impetus for the study comes from our concern that marketing in the B2B technology sector too often gets in the way of buyers actually finding what they need to know about new services and solutions. Rather than helping buyers understand the potential value of their offerings, too many technology and IT services companies get caught up in over-hyping their products, talking past the audience, and failing to connect with buyers who are legitimately interested in new approaches to urgent business challenges.

Given the strong possibility of a major slowdown in tech in the coming months, it seems more important than ever that marketers put their energies into programs that connect with recession-wary buyers on the issues that matter most. Simply put, this means programs that make a credible case for technology solutions that helps companies cut costs and generate new revenue.

Our new study will look ahead in part by looking back. We will explore how some of the biggest management concepts of the last 20 years, such as reengineering and customer loyalty management, were developed and marketed in ways that massively fueled the market for new technology, IT services, and management consulting. In fact, corporate investments in technology to support reengineering initiatives played an important role in helping tech companies get out of the recession in the early 1990s.

As important, we will look at what's working and not working right now in marketing some of today's hot button business technology issues, such as unified communications, green IT, service-oriented architecture, and the extended enterprise. If technology companies are to escape the worst of the coming recession, they will need to do a better job showing customers that investments in these types of initiatives are urgently needed as ways to control spending and/or build near-term growth.

Overall, the study is designed to answer some urgent questions facing technology and consulting marketers as they look at a very difficult market in 2009:

• How are big ideas that drive technology markets created, and how do they gain prominence and credibility in ways that drive sales?
• How can technology and IT services companies collaborate more effectively with outside experts to develop, adapt, and promote new ideas that move the market?
• How can technology and IT services companies organize themselves more effectively for thought leadership research and promotion?
• How can marketers work more effectively across their own organizations to maximize sales related to new business ideas?

If you're interested in finding out more, check out the prospectus or let me know

Where's the big idea?

IBM went live yesterday with a beta version of Bluehouse, its new suite of collaboration tools that some have dubbed "Facebook for business." First announced last January, Bluehouse is a nice looking set of tools for online work groups, meetings, document sharing, instant messaging, private communities, and so on, and it's designed to take on Google, Microsoft, and Cisco, among others targeting the same online collaboration market for small and medium-sized businesses. The new Bluehouse site has demos and sign-up (free for now), and you can see initial reviews here, here, and here.

The basic idea is to bring the immediacy and flexibility of Web 2.0 and social networking tools to business, but with more robust security and support -- and no ads. IBM is also touting the fact that clients can either use Bluehouse online, taking advantage of IBM's massive investment in "cloud computing" services, or run the software in-house if they are nervous about letting IBM host critical business data.

It's a perfectly good notion. It's also another great example of a technology solution in search of a problem. I have no doubt that many companies are looking for more capabilities to collaborate online with their customers, partners, and employees. And I'm confident that Bluehouse will be a good fit for some, and perhaps better than the competitive offerings at least for certain business cultures and environments. But where's the big idea? Despite the endless books, articles, blogs, conferences, and overall hype about the move to collaboration, I still don't think an idea has jelled for the business community that inspires a sense of urgency in investing in software or services like Bluehouse. 

Good products plus good marketing and sales can generate revenue. But big ideas can move whole markets. I'm pretty sure IBM is trying to move the whole market in this case. Thus far at least, I don't see the thought leadership capable of doing that.

Real thought leadership is compelling because it takes a serious and clearly felt business problem, provides a new approach to solving that problem, and, crucially, offers proof that the new approach can provide measurable business value -- usually in the form of in-depth case studies from early adopters. What is the problem that Bluehouse is solving, and where is the proof that online collaboration is solving that problem? Absent this kind of thought leadership, it's difficult for a new "solution" like Bluehouse to galvanize the marketplace.

I'm picking on IBM because it's in the news today. In fact, IBM is often better than many competitors in making the business case for its products and services. And basic marketing and sales prowess will likely create something of a market for Bluehouse no matter what.

But I'm still waiting for the big idea.

Aligning thought leadership marketing, sales...and offerings

At the end of an SMEI breakfast briefing on thought leadership marketing last week, the group got into an extended discussion with one of the participants. He worked for an enterprise software company, and was wondering why the great thought leadership work they were doing wasn't translating into sales. Apparently they had published a great new white paper on a new and important business approach, had organized successful webinars with hundreds of attendees, and had all sorts of sales conversations going on, but the deals simply were not coming through.

The group asked lots of good questions and made a number of  suggestions about producing more and better content, nurturing leads more effectively, and so on -- but nothing really hit home with our frustrated software marketer. Until I wondered out loud if there might be an offering problem: Did the company actually have clear and compelling offers to support the new approach that the marketing and sales folks were promoting? Well, no. "I'm sure we do have an offering problem," he said.

Now I'm a huge fan of thought leadership marketing (done well, of course), and getting the sales folks aligned to a thought leadership approach can make for a powerful combination. But it's hard to make a lot of headway if there isn't a clear connection back to specific offers.

Demonstrating expertise to the market is a critical strategy for many companies today. And doing this without any overt selling an essential ingredient of thought leadership success. At the end of the day, however, we're all in business to make money, so the efforts do need to support sales. And if you don't know what you're selling, it's pretty hard to close the deal.

Back to basics

New ideas are central to marketing success, but sometimes getting back to basics can be effective, too. The Email Experience Council just posted a very basic guide to email marketing. The guide provides simple questions and answers on issues that many marketers are still struggling with, such as legal compliance, growing your lists, and choosing between different formats.

The guide won't be much help to experienced email marketers, but that's not the goal. Rather, the goal is to help newcomers. As Chad White noted in explaining the guide: "While there are some organizations doing amazingly advanced things with email, most companies are still nailing down the fundamentals." Moreover, White noted, the demand for email marketers is growing fast, and few university marketing programs do a good job on email marketing.

How might this apply to your own marketing? Although It's tempting to play to your most sophisticated customers and prospects, you probably have a large group sitting a lot lower on the learning curve. Providing basic "beginning" educational materials on the issues they are facing might well be a valuable service for a large constituency in your market. It certainly can't hurt, and it will help make sure you have a clear sense of what the basic questions are and how best to address them. And it would probably be helpful inside your company as well, where some employees may be too embarrassed to ask "stupid" questions that are actually central to their work.

UPDATE: Just after posting this, I saw that New York Times technology columnist and blogger David Pogue produced "Tech Tips for the Basic Computer User" today, noting that "what’s common knowledge isn’t the same as universal knowledge." Check it out; you'll probably learn something!
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