Reputation to Revenue

Four steps to strengthening B2B customer connections

 

IBM's hot-off-the-press 2010 CEO Study confirms again what solutions marketers already know: getting closer to customers is a strategic priority. An overwhelming 88% of large enterprise CEOs told IBM that getting closer to customers is a top business strategy for the next five years, placing it at the top of the list. An even higher number of the best performing CEOs, 95%, stressed the point.  

Is this really news? Isn't this just Marketing 101?

Well, sort of. The idea is basic, but making it happen, especially in large organizations, is not so easy.

The CEO imperative makes sense. Big company CEOs are struggling mightily, as the IBM report notes, with "the complexity of operating in an increasingly volatile and uncertain world."

In this context, and especially from a B2B perspective, close customer connections are essential to:

• Gain deep insight into customer wants and needs
• Gather input and advice on potential new offerings
• Uncover new opportunities and co-create solutions
• Obtain references, testimonials, and proof of value delivered

Creating and sustaining those trusted connections is extremely difficult, though, when our customers are overwhelmed with their own professional demands and tune out most of our marketing.

Social media brings promise of new and potentially more effective ways to build and maintain vibrant customer connections, both individual and communal -- but understanding how to turn that promise into reality is far from clear.

Meanwhile, face-to-face connections remain essential for key customers, especially at the executive level where so many of us need to be working. But our sales people have less time for relationship building and often little credibility in the executive suite. Beyond sales, it is difficult to know which face-to-face programs are worth funding.

A final challenge, especially for large organizations, is simply managing, coordinating, and building synergies across the wide range of programs and activities designed to strengthen customer connections.

Knowing this is a CEO priority, however, should make it at least a bit easier for marketing leaders to push forward with efforts to do what we all know is so important.

Here are four steps to consider:

1. Do an assessment. It's hard to even keep track of all the ways we're already connecting with customers. Research, sales, services, and delivery are obvious, but we also have thought leadership programs, social media and networks, executive relationship programs, reference management, key account management, customer councils, collaborative solutions development, and probably many more. Take stock of all these initiatives. Look at funding and staffing. Review effectiveness in terms of customer insight and relationship growth. Benchmark the competition. We need a baseline to identify gaps and next steps and to help build a vision of where we need to go.
2. Put someone in charge and build a cross-organizational team. We're already doing this with social media (hopefully!), but customer connections is an even bigger deal. We need someone with the big picture in mind and organizational partners and resources available to improve coordination, integration, and information sharing. We're not building relationships for their own sake, and we're not doing it just for sales either. If no one has accountability to ensure efficiency and effectiveness across the range of relationship-oriented programs, it won't happen.
3. Build executive commitment. The CEO wants to get closer to customers but is the rest of the leadership group on board? Are they setting the right examples and the right tone for their teams? Operationalizing the commitment to customer connections requires real investment and, as important, TIME. We need to push and prod and support senior executives to make the time to work on key relationships, participate in customer councils, and send the message that these initiatives are indeed a top priority.
4. Provide incentives. Companies that take customer satisfaction seriously put serious incentives in place to support the right behavior. Improving customer satisfaction is not the same thing as strengthening customer connections and relationships, but the principle certainly applies (as it usually does with any strategic initiative). Set specific goals, measure results, and then reward the folks in marketing, sales, service, and delivery teams for hitting their relationship growth targets.

What would you add to the list? What's working for you?

Photo credit: Marc_Smith

Lessons from IBM's CIO community program

Everyone selling high value solutions wants to engage C-level executives. 

They're the ultimate decision makers. They can provide deep insight into both their own companies and emerging issues in your markets. They can give you the most powerful references and testimonials. 

Of course they're also the hardest to reach. 

Most B2B solution providers have some sort of executive relationship program, often with some combination of advisory councils, executive briefing centers, executive dinners and seminars, and similar initiatives. And most of these companies struggle mightily to make these programs work and gain substantial value from them.

Karla Bousquet, Director of Executive Client Marketing at IBM, provided some useful insight from IBM's experience during a webinar today organized by Farland Group (full disclosure: I used to work with Farland Group principals when we were all at Truman Company).

Most important, according to Bousquet, is beginning with a clear understanding of what senior executives (CIOs, in this case) truly value:

• Engaging with their peers and extending their professional networks
• Influencing the direction of organizations or initiatives that are important to them
• Gaining justification for their business direction and intuition
• Sharing best practices and lessons learned from peers and experts they trust

They're busy, they don't really care about your products, but they are anxious to learn and grow, most especially with their peers.  

In this context, IBM has taken a strong community approach to serve CIO (and IBM) needs, with four core objectives:

• Establish a shared agenda for engaging with peers and influencing IBM's strategy
• Deliver on IBM's belief that customers play a key role in driving new ideas and innovation
• Provide CIOs with access to experts and expertise across IBM and its partner ecosystem
• Work with CIOs to share success stories that demonstrate business value with CIO contribution

Each of these objectives responds directly to one or more of the things that executives value most. It's difficult to succeed with any community initiative if you don't focus first on providing relevant value to would-be participants. It's doubly difficult with the busiest and most sought-after executives.

To make it work, IBM has developed a tiered program, with three distinct initiatives:

1. Board of Advisors (20-25 CIOs). This is the most strategic of the three, and involves IBM's top executives as peers with CIOs from their most important clients. The primary focus is on providing advice to IBM on the company's strategic direction, something that the participating CIOs have great interest in given their enormous stake in IBM's success.
2. CIO Leadership Exchange (200+ CIOs). Initially an annual event, IBM is working to build more of an ongoing community with this larger group of CIOs from top global companies. The focus here is on sharing of best practices and success stories within a highly accomplished peer group of technology leaders.
3. Center for CIO Leadership (2,000+ CIOs). Focused on advancing the profession, this mission-driven organization, for which IBM provides lead sponsorship, emphasizes the development of leadership skills for current and future CIOs 

The tiered approach helps in organizing IBM resources and responding to different types of CIOs with different levels of relationship to IBM. Underlying each of these programs, though, is a consistent focus on delivering the value that executive participants demand:

• If CIOs want to engage with peers and extend their networks, make sure to prioritize peer exchange and access to experts in every aspect of community and program design
• If CIOs want to influence the direction of your organization, make sure to empower them and allow them to do this, even if it means listening to dissenting views
• If CIOs want to justify their business direction and intuition, create serious opportunities for collaboration and dialogue, along with providing relevant research and perspective
• If CIOs want to share best practices and success stories, ensure a private and safe environment to enable them to do this with relevant and credible peers

It's not rocket science, but it's not easy either. It means letting go of the desire to pitch and sell, and committing to the hard work of listening, facilitation, and collaboration. It means having the patience to emphasize the longer term benefits at some potential expense to short-term gain. Most of all, it means truly putting customer interests first, something we all talk about but all too often fail to deliver.   

Carrotmobs make my night

Triple Pundit almost always brings a smile to my face, and for that reason is one of my favorite blogs by far. The group blog highlights the three "p's" of sustainable business -- people, planet, and profits -- and highlights a steady stream of optimism-inducing stories about both creative startups and long-established corporations doing well by doing good.

Tonight's read inspired an extra-big smile: the story of Virgance, "a venture-funded startup that calls itself a platform supporting Activism 2.0" What this means, in essence, is that Virgance is integrating social media tools and a save the world mentality into some really creative business opportunities. Jujst a year old, the company has already launched two interesting social power ventures:

• 1 Block Off the Grid (1BOG) brings neighbors together to purchase and install solar panels collectively, negotiating hefty discounts and keeping a share of the savings
• SunRun, another solar purchasing program, installs solar panels but retains ownership and lets homeowners pay a reduced rate for power

Several Facebook-centered initiatives are in the works as well, including one to help companies distribute social responsibility funds by encouraging Facebook members to choose the recipients.

My clear favorite, though, is Carrotmob, which actually predated and inspired the formation of Virgance. Triple Pundit calls it an "anti-boycott," and the idea is to convince people to shop at a certain store if that store agrees to invest some of the proceeds to improve energy efficiency.

Powered by Facebook and other social media outreach efforts, the first Carrotmob in San Francisco brought hundreds of people to a small market in the Mission neighborhood, and brought the market almost $10,000 in purchases which yielded almost $2,000 in green upgrades.

 

But the more important result, as Triple Pundit notes, "was the buzz this Carrotmob generated. Consumers are drawn to the notion that they can influence a business to become more sustainable, and not by boycotting it but by patronizing it--essentially giving it the funds to make sustainability improvements."

Along with San Francisco, Carrotmobs are now active in New York, Chicago, Kansas City, London, Helsinki, Bristol, England, and more.

I'm usually skeptical when people talk about "shopping for change," but Carrotmob brings a lot more to the table. And it sounds really fun!

What do you think?

Dell joins the health care discussion

About four years ago, "Dell Hell" entered the lexicon as both shorthand for the firestorm that blogger Jeff Jarvis whipped out by trashing Dell's customer service publicly, and metaphor for big corporations that didn't "get" the new power of social media.

Since then, Dell has made an enormous effort to take social media seriously, and has launched all manner of initiatives to listen to customers online, make the company more transparent, and take a more human and collaborative approach to doing business. Jarvis summarizes Dell's transformation nicely in his new book, What Would Google Do? (a great and provocative read, by the way, if you haven't yet picked it up).

Today's announcement that Dell is launching a new IdeaStorm specifically for health care and life sciences is a perfect example of why the company is so effective now in the social economy.

"As Dell participates in HIMSS this week, one of the largest global healthcare events, we are well aware that there are specific technology needs in the heathcare industry. IdeaStorm for Healthcare and Life Sciences has been created to start the conversation on what Dell can do to address those technology needs and simplify the healthcare IT solutions...Through collaboration, we can all determine the best ways to reduce complexity, save time and reduce costs." 

Self-serving? Of course. Healthcare IT is a huge market and Dell wants as big a piece of it as possible.

But it's enlightened self-interest in a participatory world, and that's what makes it worth comment.

• It's about a big issue affecting millions (billions) of people
• It's a hard issue: how IT can contribute to health care solutions
• It's humble: Dell does not pretend to have all the answers
• It's about facilitating conversation and being open to ideas from any direction
• It's credible, given the background of Dell's substantial efforts to create a more open and collaborative organization 

So kudos to Dell for another strong step forward. For companies looking to move ahead with social media and innovation, Dell has shown again why it's one of the leaders worth studying. 

What do you think?

SAP's sustainability site: Will they come?

Business software giant SAP launched an online collaboration site last week to promote dialogue with stakeholders on a range of social, economic, and environmental concerns. The site sits on SAP's new collaboration workspace platform, which enables registered users to post content, communicate with SAP officials and each other, and set up public and private workspaces. 

To get the dialogue going, SAP's vice president of corporate citizenship, James Farrar, has launched a new blog, a stakeholder survey, and, most important, the company's first global report on sustainability.

It's a great idea, and it plays directly to the mission-oriented marketing I wrote about with IBM recently. As noted by Sustainable Life Media, it follows similar efforts by companies including Cadbury and IKEA Canada. 

SAP has a good story to tell on sustainability, and the report does a nice job of telling it. Befitting the company's role as a leading software provider, the report has a dual focus, covering both SAP's internal responsibilities to operate in a sound, ethical, and environmentally responsible manner, and external opportunities and obligations to provide solutions that help clients operate in a similar fashion. 

Even more, providing a real platform for collaboration gives credence to Farrar's claim that SAP sees its sustainability report (itself an important step) as simply the beginning of an ongoing dialogue with stakeholders.

The question now is will they come. Nine days after the launch, the site is pretty thin. One blog post, two documents, and just a few outside comments. The sustainability report has received a number of views, but the dialogue has yet to really begin. 

It's a common problem, of course. You can't just build it and hope they will come. Clearly SAP put enormous effort into creating its first sustainability report and building the collaboration space. The challenge now is to put similar energy into generating interest and traffic to the site, and lively interaction once people get there.

Deloitte says CSR and green can boost M&A value

Many discussions about the business value of corporate social responsibility and "going green" highlight benefits such as brand distinction, customer loyalty, and employee morale -- and, increasingly, potential cost savings. A new white paper from Deloitte adds deal value in mergers and acquisitions to the list.

According to the authors, "companies that have strong corporate responsibility and sustainability (CR&S) programs in place are likely to be rewarded for their efforts. Those that don’t have such programs can expect to face increasing regulatory and marketplace demands for change."

The trend is driven by increasingly tight environmental regulations as well as broader trends toward greater transparency and accountability around potential social and financial risk. Energy companies are obviously front and center here, but the trend affects many industries, according to Deloitte, including manufacturing, transportation, and retail.

As CR&S wields growing influence on the strategy and operations of companies, so will it become an increasingly important aspect of M&A. Acquiring companies will want to know whether they are taking on sustainability problems or opportunities. Divesting organizations will want to know whether their sustainability profile will contribute to a premium or discount price.

Looking ahead, the Deloitte authors provide several useful suggestions for executives looking to buy or sell:

• Know your own backyard: Understand how well your organization is addressing sustainability issues
• Begin to incorporate CR&S metrics, goals, and targets into the deal valuation process
• Consider the potential economic impact of changes on consumer preferences, legislative changes, significant variations in energy prices and other supplier prices
• Plan for evolving regulatory conditions
• Engage in a formal alternative future/risk assessment scenario planning exercise
• Consider the people aspects

 

IBM, Obama, and marketing with a mission

Sam Palmisano, IBM's CEO, went to the Council on Foreign Relations this morning to lay out an ambitious program of technology-driven social change and economic recovery. IBM's "Smarter Planet" initiative is a seriously big idea; in Palmisano's words, it's about "infusing intelligence into the way the world literally works—the systems and processes that enable physical goods to be developed, manufactured, bought and sold… services to be delivered… everything from people and money to oil, water and electrons to move… and billions of people to work and live."

Practically speaking, this means investing heavily in technology-based systems and processes to address fundamental global challenges such as energy waste, transportation gridlock, supply chain inefficiency, water shortages, antiquated health care systems, and, perhaps most urgent right now, unmonitored and out of control financial markets.

The initiative is of course self-serving. The more governments invest in technology-based solutions, the more industry leaders like IBM stand to gain. But self-serving doesn't mean it's wrong. In fact, I'd like to suggest that this is actually the best kind of marketing, and the kind that we need to be emphasizing right now:

• It's mission-driven, focused on applying business know-how to clearly felt social problems
• It's inspirational, inviting people to think big
• It's provocative, challenging people to debate the premise, the approach, and potential alternatives
• It's solution-oriented, looking more toward designing sophisticated solutions than pitching specific products or services
• It's believable, because IBM has done the research, is already investing heavily in green technology and services, and has credible offers and capabilities to address at least some of the problems.

My main point here is not to praise IBM, although obviously I do think the effort is praiseworthy. IBM is far from a perfect company and other firms are doing similarly valuable work in these areas. Rather, it's to raise the question about how we go to market in this difficult time.

Most of the marketers I talk to these days are shortening their time horizons, shifting resources (to the extent they still have them) toward lead generation, and doing whatever possible to accelerate immediate sales. This is understandable, and yet...

We've just completed a remarkable election in the US in which a majority of Americans chose a candidate who stared calmly at enormous problems facing our country and the world and said now is the time to think big, to set our sights high, and to be the change. Self-serving? Of course. But it also excited and inspired and mobilized millions of people previously too cynical or disengaged to actually believe that getting involved could make a difference.

Marketing candidates is clearly different than marketing business services and solutions. But exciting and inspiring cynical and disengaged people is actually a pretty good description of the challenge we business marketers are facing right now too.

Palmisano summed it up nicely this morning: "Over the next couple of years, there will be winners, and there will be losers. And though it may not be easy to see now, I believe we will see new leaders emerge who win not by surviving the storm, but by changing the game."

Key questions for B2B communities

There aren't many issues hotter than online communities for B2B marketers these days. Just about about every B2B company I know is trying to figure out how to advance existing communities, build a new one, or design a strategy. The benefits seem obvious, and everyone else is doing it, so you'd best not be left behind.

It's all well and good, but two rather practical questions keep getting in the way:

• How do you really make them work, given the extreme time pressures on would-be  participants?
• Where should you actually look to demonstrate return on investment?

Susan Zellmann-Rohrer tackled those questions head on the other day in a useful webinar organized by Mzinga and Communities Exchange. Zellmann-Rohrer spent years helping building Communispace, a top manager of private online communities for B2C and B2B clients, and is currently heading community strategy for EMC, so has more practical experience in this world than most.

On the first question, making them work, she highlighted three specific benefits that organizers should emphasize in creating a value equation for participants:

• Empowerment. Customers want to have a say on company direction and initiatives that affect them. If you can indeed empower that, they'll respond. But this means asking them for input, sharing inside ideas and information, and, most important of all, really listening and acting upon what you hear -- and reporting back on the results.
• Premium Content. What special and useful material can you provide participants that they would not otherwise see? Are there members-only publications? What about pre-publication drafts of important reports?
• Networking. This is the most obvious benefit and the first rationale for most communities, but it's hardly a matter of build it and they will network. Inviting the right people to join is the first, hurdle; actively encouraging and making it easy for them to connect to each other is the second. At EMC, for example, Zellmann-Rorher is tying a new online community directly into LinkedIn, so participants have easy access to more extensive profiles and networks than they would with EMC's community alone.

As for creating and proving the value, Zellmann-Rohrer suggested three areas to consider:

• Quality improvements. Has the community generated practical ideas to improve the quality of products and services?
• Customer advocacy. Are community members, especially the most engaged ones, actively advocating for the company, both within the community and outside?
• Co-innovation. Is the community becoming a vehicle to actually develop new product and service offerings? Zellmann-Rohrer cited research by MIT professor Eric von Hippel showing that innovation fueled by "lead users" in communities is highly correlated with commercial success.

The point of all this is that, beyond the hype, communities can indeed be extremely valuable to B2B companies, but not without a serious commitment to investing the time, giving at least as much as you get, and bringing a much more open approach to customer connections. Hmm... this is pretty much what we need to do with every other aspect of marketing these days, isn't it?