Reputation to Revenue

Permission marketing turns ten

Seth Godin today marked the tenth anniversary of his hugely influential book, Permission Marketing. Along with Cluetrain Manifesto, Godin's first book captured perfectly the seismic shift in marketing that was just then (1999) beginning to be understood: markets are conversations, interruption marketing is dying, buyers are in control, marketers abuse customer trust at their own peril, the Web opens up everything. And this was all years before anyone ever heard of blogging, YouTube, Facebook, or Twitter.

Thanks Seth!

P.S. You can still get the first four chapters free at permission.com.

MIT and the new physics of marketing

Today's New York Times had a fascinating article about changes in teaching introductory physics...which got me thinking about the changes we're working through in marketing.

Like most universities, M.I.T. has traditionally taught introductory physics in large lecture halls. Professors worked for years to hone their lectures like the finest stage performers.

"But now," Sara Rimer explains, "with physicists across the country pushing for universities to do a better job of teaching science, M.I.T. has made a striking change."

"The physics department has replaced the traditional large introductory lecture with smaller classes that emphasize hands-on, interactive, collaborative learning..... Already attendance is up and the failure rate has dropped by more than 50 percent.

M.I.T. is not alone. Other universities are changing their ways, among them Rensselaer Polytechnic Institute, North Carolina State University, the University of Maryland, the University of Colorado at Boulder, and Harvard. In these institutions, physicists have been pioneering teaching methods drawn from research showing that most students learn fundamental concepts more successfully, and are better able to apply them, through interactive, collaborative, student-centered learning."

So what's the marketing connection?

Marketing, especially for high value business solutions, is becoming more educational than promotional. This is not exactly a news flash; the best business marketers have been working for years to shift from pitching prospective customers on the merits of their products and services to providing insightful and useful information about the business challenges their customers and prospects are facing -- and thereby generating interest and credibility around the solutions they might provide.

To do this well, however, marketing can't just exchange their old-fashioned promotional approach for an old-fashioned lecturing-at-students educational approach. Business buyers today do want to learn about issues, challenges and potential solutions from their would-be suppliers and partners. But they don't just want to listen to you pontificating up on stage. They want to roll up their sleeves, work with their peers, and figure it out together.

So the challenge for marketing, at least in the B2B solutions world, is to take a page from M.I.T.'s book: less large lecture halls, more small seminars; less talking at, more working with. Online and social media tools and channels, of course, make this easier to do. Without a core commitment to "interactive, collaborative, student-centered learning," though, business marketers could be left on stage with declining attendance and an increasing rate of failure.

Photo credit: Nicholasf

Marketing as service

Drew Neisser, CEO of the interactive agency Renegade, has a useful post today on "marketing as service". The basic idea, a variant on my constant focus that marketing needs to provide legitimate value to all stakeholders, is when marketing "no longer talks at you but actually does something for you, then it becomes a service." 

As an example, Drew cites Samsung placing mobile charging stations at airports to help travelers recharge on the road: "Samsung gets meaningful exposure, airports get happier travelers and consumers come to recognize Samsung as a helpful & reliable 'mobile' resource. The exchange of value is crystal clear."

He then goes on to critique a superficially similar effort from Kraft, which highlights heating up bus shelters and providing samples of Stove Top Stuffing to "warm up" cold commuters this month in Chicago. Sounds okay at first, but Drew's point is that Kraft is doing this in just 10 bus shelters in Chicago, while putting more energy into traditional bus stop shelter advertising all over that city and 49 other cities as well. 

A more substantial commitment to marketing as service, he suggests, would be scrapping the advertising and providing the actual service more extensively in cold weather cities nationwide. "Commuters would be thanking Kraft by the bus load and telling all their friends how the kind folks from Glenview warmed them up on a frigid morning. Cities would be competing to get the Kraft bus shelter program as a way of encouraging and rewarding the use of public transportation."

Marketing as service is far from an alien concept in the B2B world. Business software companies provide free demos and trial versions; many companies have user groups and customer councils; and most provide thought leadership content in an effort to help business leaders make more informed decisions. 

But how much of this activity is really just a come-on to paid versions or a thinly veiled sales pitch rather than authentic provision of value -- or, as in the Kraft example, just a token effort amid a much more extensive promotional campaign? To what extent are you really trying to serve?

(Thanks to Paul Dunay for linking Drew's post on Twitter. Follow Paul yourself for a steady stream of great links.)

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!

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.

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?

"Did everyone hate me then as much as I hate them now?"

Wow. I've been working on a research project on how services companies build their brands and, although the project is confidential, I couldn't resist posting this line. It comes from a woman in her first field marketing job after spending years at the corporate/headquarters level. We were talking about the inevitable tensions between corporate and the field when it comes to messaging, advertising, and the like, and she just came out with this.

We always talk about the conflicts between marketing and sales, but this is a great reminder that those between corporate and field marketing, especially in large organizations, can be just as corrosive. Amid the race to do more with less, it's important to set aside the time to build collaboration and relationships across the organization. Brands reflect their people a lot more than any manufactured message or tag line, and "hating" across organizational lines is not exactly a recipe for success.

Seth Godin strikes again

Seth Godin once again demonstrates the power of the personal brand. Opening an email alert from his blog this morning, I see that he’s invited his readers to join a new “tribe.” At first glance it seems relatively standard issue — a new online community for marketers with blogs, forums, photos, etc. (yawn). But, as usual, he adds a few interesting twists.

For one thing, it’s invitation only for readers of his blog, at least until October. Since Godin’s blog is one of the most popular around, this is not exactly an exclusive invitation, but, as he notes in the invite, “powerful tribes aren’t open to everyone. The exclusivity makes it work.”

For another, accepting the invitation is based on pre-ordering his next book, which is all about (drum roll please), tribes. It’s not about selling more books (hmm), according to Godin, but rather “it about creating a small hurdle to get the right people in the door.” The book won’t come out until October 21, and a visit to Amazon provides only the title and a short paragraph about the power of tribes.

Well, he got me. I dutifully bought the book for $14, forwarded him my receipt before 11 am this morning to make sure I beat the deadline, and will now wait and see what happens with the new community. And I know I’m in good company. As I write this, the book is 7th on the Amazon best seller list (at least for this hour) and 1st in several business sub-categories. Not bad for a book we won’t even see for three months.

Will the book be worth it? Probably yes; most of his books contain at least a few good nuggets. Will the “tribe” be worth joining? Who knows, but it’s worth the price of admission just to see how Godin will try to carve out a unique position in a field of too many marketing communities to count.