Chris Halliwell

Message Magic Checklist

Chris Halliwell, Technology Marketing Center Executive Director here checking in with a well worn, but crucial contribution to the clarity of your marketing message.

ImagesOver the past few months, I've been involved as an EIR at an incubator here in Southern  California, which has given me frequent opportunity to hear that beloved of messages, the Elevator Pitch.  One of the startups I've been working with completely re-engineered their message and the results have been magical.  Potential customers are eager to learn more, and potential investors sense a unique opportunity. 

So much, entire books, have been written on the importance of a clear value proposition and differentiation, so this blog's contribution will be to crystallize the basics into six quick rules.

 

You Talkin' to Me?  Pick a target market and an economic buyer and stick to it.  Message muddling starts with lack of audience clarity. 

What's Your Problem? How many websites do not explicitly identify the important problem being solved?  Why should the audience invest in learning about your offer?

It's Your Thing.  What is this thing you are selling? Pick a category that the audience already understands to quickly communicate where you fit.  Without this mooring, you'll confuse everyone.

Debuzzify.  To be remembered and believed you have to be relevant to something the audience already knows or believes.  When you fall in love with words you invent or resort to lofty hyperbole, you lose credibility.

ILITY One.  Always be selling the category's value to grow the pie.  Express category value as an "ility", for instance, "this category brings scalability vs. older or alternative technology."

ILITY Two.  Now tell me how you are different and better than other members of the category, for instance, usability, reliability, efficiency, maintainability. Ilities are value drivers that exist over time. Establish brand by claiming the intersection of Ility One and Ility Two and supporting these capabilities with unique offer points.

Whenever you scan a website or read about a product or company that you admire, you're feeling the comfort and credibility of these 6 rules.  You'll be able to pick out key elements of the Magic Message in all of the company's communication.  On a recent Southwest flight, the Chairman's statement in the front of the Southwest magazine read, in part: 

"Southwest has a bold vision to become the world's most loved, most flown, and most profitable airline...our daily focus is on how we achieve it through the Reliability of our airline and the Hospitality of our people."

Air flight is a well-established category solving an obvious problem, getting to a destination quickly.  So what's key in this quote is the simple, plainspoken articulation of excellence in category value (Reliability) combined with Southwest's differentiation (Hospitality). This message works in part because it follows the rules, however, the most important thing is that each of us has personally experienced Southwest consistently delivering on these promises in unique and valuable ways over time.

 

 

 

 

 


Data is the New Oil

Data is the New OilHappy 2018! This is Chris Halliwell, Executive Director of the Technology Marketing Center, kicking off the New Year by summarizing big data business model options for your consideration.

Working with clients and the University of California, Irvine Wayfinder incubator, there is a constant stream of interest in generating profitable growth based on data.   Add in the prospect of AI-driven analytics and you’ve got yourself 1860’s style oil exploration mania!

How do intrapreneurial initiatives and startups organize to make money off data?

Data-Driven Start-up Business Models

A few years ago University of Cambridge (UK) used field research and statistical analysis of 100 firms worldwide to develop a taxonomy of 6 data-driven business models used by start-ups*. The findings from this study are presented here as a starting point for you to begin a strategic discussion about the money-making opportunity in data you are collecting as you pursue your core businesses. Note that over 80% of the firms in the research were targeting B2B markets.

Over 70% of firms use external data sources either solely or in combination with internal sources to package a data offer. For 76% of firms, analytics is a key activity, although over 70% of that analytics is descriptive rather than predictive or prescriptive. As you would expect, 62% of firms were subscription-based.

The Cambridge team used Business Model Canvas and related academic frameworks as a guide: a business model describes how your key resources and cost structure support the value of your offer to a specific market segment and associated revenue generating mechanisms. Basically, how are you going to make money?

Gartner provides a nice definition of “big data”: high-volume, high-velocity and high-variety information assets that demand cost-effective, innovative forms of information processing for enhanced insight and decision making.

Sources of Data

Data is the value, the resource to be acquired and exploited. The Cambridge study found 5 sources of data for offer development, with firms often packaging one or two sources together:

  • Existing operational data culled from your core business
  • Latent organizational data, such as emails, contracts, documents, etc.
  • Commercial data available for purchase
  • Social media data available for purchase
  • Public data

The 6 Big Data Business Models

  1. Analytics-as-a-Service (29%), for instance, Sendify, Granify, and Augify
  2. Free data collected and aggregated (18%), for instance, GNIP
  3. Data generation (typically from customers) and analysis (17%), for instance, Go Squared (B2B) or Swarmly (B2C)
  4. Free data knowledge discovery analytics (15%), for instance, GILD
  5. Multi-source data mash-up and analysis (15%), for instance, FarmLogs
  6. Data aggregation-as-service (6%), for instance, Bluenose

As expected, analytics-as-a-service dominates business model organizations, but it is interesting to note that over a third of the firms (#2 and #4) make money based on free data.

*Although from 2014, I found the Cambridge University article unique and useful, using the familiar terminology of the Business Model Canvas, and giving us a global scope for exploration of innovative business models. Here’s to striking oil and successfully harnessing the value of information in your business!


When will biometrics replace passwords?

Here's the second of the Summer series on emerging technology from Chris Halliwell, Executive Director of the Technology Marketing Center.

It can't be soon enough to get rid of scribbled lists of passwords, infrequent passwords that are forgotten from one browser to another, Facebook intrusion, and even clever but annoying apps that generate master passwords.  I'm ready for a passive, don't have to think about it solution like a heart rate wrist band.

Bionym_nymi_colors_stacked-3

 

 

 

Will Wearable Heart Rate Monitors Mean the End of Passwords?

Wearable heart rate monitors capture your heart rate in real time to help you improve physical performance or general health. But what about the potential of a wirelessly connected monitor to present your heart rate as your unique identifier for online access? Enter Bionym who make Nymi, a wristband that authenticates you to systems and online services, and in the future could replace car keys, house keys, boarding passes and credit cards.                                              

Heart rate measurement is not yet as accurate as fingerprints, but the technology is advancing, with latest Apple Watch reviews reporting far better accuracy than previously thought. And heart rate is the ultimate convenience because, unlike fingerprints that have to be entered with each access request, once you put on the wristband and validate yourself you are good to go for access to any device or service. It’s called persistent identity.                                                                        

What About Security and Privacy?                                                                                        

Biometric security systems are designed to sense and verify locally. Once verified, identity is associated with a previously issued number like an airline program number or even a social security number. Since identity is verified locally and linked to a known number, biometric systems are inherently secure because they only communicate “yes” or “no” identity association through the network to the online service you wish to access.                                                                      

Privacy issues arise when biometrics are used as proof of identity at the time of issuing identification numbers, such as a customer or citizen number. The purpose of this process is to prevent duplication so that one person can’t obtain more than one identification number. Identity proofing creates a centralized biometric database that fuels the fire of privacy concerns.             T

The leader in biometric identity is India’s Adhaar system (currently using fingerprints and retina scans). Adhaar deployment has been seriously stymied by an India Supreme Court Biometrics Decision. Critics cite objections from religious concerns about women’s bodies, to recent data base hacks, to surveillance powers of the state.                                                                                                

Will Wearable Heart Rate Monitors Win the Biometric Battle?                                                        

By 2016 Bionym had partnered with Mastercard and Royal Bank of Canada for a wearable Mastercard RBC Heart Rate Trial. The results of that trial have not been published, but it’s known that biometric identification trials, from retina scan to selfies, are underway. The verdict is out.

 


Thumbnail Update on Blockchain

This is Chris Halliwell, Executive Director of the Technology Marketing Center, veering away from our marketing process focus, to indulge in a small series of topic posts.  

Blockchain Logo

There are always technologies on the horizon that we will eventually have to deal with in our product and market strategy at some point in the future, think big data 5 years ago.  Some senior executive will ask us about the technology and what it means to our business.  So, to start to get you up to speed, our first technology thumbnail: blockchain.  Hope this helps.

What is blockchain storage technology and what's so great about it?

Blockchain technology enables distributed databases that store copies of information on 100s of computers.  The computers all have to agree to the validity of a data transaction, thus potentially eliminating the cost and "friction" of middleman functions in everything from digital money transfers to cloud storage providers.

"Rather than store your files on Dropbox or Onedrive cloud servers, what if your files could be split up into tiny chunks and stored on 1000s or millions of people's computers around the world…and only you have the key to view the pieces as a whole, and no organization owns your data?"  Jamie Skells,

And importantly, with one recent spectacular exception, blockchain storage technology addresses "honeypot" security issues that make headlines as centralized and human-managed databases are routinely hacked.  Database and network security issues are significantly abated, shifting security concerns to distributed, individual user authentication technologies such as long encrypted keys.

How fast will we see blockchain take over cloud storage architecture?

Ultimately experts agree that blockchain will become the best cloud storage option.  As Marco Iansiti and Karim Lakhani write in the January-February issue of Harvard Business Review, "Blockchain is foundational technology: it has the potential to create new foundations for our economic and social systems."  The technology has been employed by Bitcoin since 2008, so when will it go mainstream? 

Iansiti and Lakhani use the adoption path of another foundational technology, TCP/IP, to outline a probable scenario for widespread blockchain implementation:

  • First, find an initial compelling application: For TCP/IP in the early 70's this was a national email network not dependent on dedicated lines – for blockchain this is digital currency.
  • Second, target enterprise use of the technology: For TCP/IP a few tech-savvy firms created private localized networks, and then expanded to productivity enhancing use cases.
  • Third, make the technology "consumer easy": With the introduction of browsers, TCP/IP enabled widespread consumer use of the worldwide web in the mid-90's.
  • Finally: provide the tools to proliferate applications based on the foundation technology: Innovation in web applications created today's behemoth digital corporations, lowering costs and increasing convenience for consumers in a myriad of astounding ways.

Where is blockchain in the cloud storage adoption process?

Blockchain technology is just entering the early adopter phase of enterprise adoption, typically creating internal, private databases focused on a single use case.  This pilot test phase will prove out the viability of blockchain technology and teach innovators what they need to know as they look to expand to other use cases within the organization.  As Iansiti and Lakhani report, the Financial Services sector is well down the road experimenting with digital currency type private uses, while the broad Manufacturing sector has not yet started trials.

Got any suggestions for Thumbnail Updates?

Send them along by commenting on this post and I'll do some research for a blog post.


The Incredible Shrinking TAM

This is Chris Halliwell with a new post for the Technology Marketing Center Leaders' Blog.


ImagesWhat to do when the market that has sustained the your growth starts to slowly experience the effects of next generation or disruptive technology?  Would you warn "don't stick your head in the sand?" But who has the guts to tell the Board that the Golden Goose is just about out of eggs, particularly if it's not obvious what to do about it?  As Ken Olson at Digital Equipment learned so many years ago, when open UNIX and cheap workstations threatened mini-computing, ignoring the threat leads to doom.  What's doubly sad is that in many instances, such as Digital, the company had the technical wherewithal to transition its customers to new technology, they just didn't want to because the new technology was cheaper. Management couldn't get their heads around restructuring and the unpredictable market expansion potential of cheaper, faster, smaller, easier.  If you don't replace your own aging technology, some other competitor will be more than happy to do it.

Share of Wallet

One approach to the dilemma of the shrinking TAM is to double down on your market and find more things to sell to current customers. This bundling strategy can include development of complementary products and/or addition of software and services, very often beefed up maintenance and support (Has anyone got a sensor and an algorithm I can borrow?)  Typically including acquisition of ancillary piece parts of a familiar solution, the management dilemma is one of embracing profit, rather than growth orientation.  The bigger bundle, if it is actually better for customers than piece parts, should be more profitable.  But it will still be a low growth opportunity year over year.

Like Science, Good Strategy Has No Dogma

Another approach to slowing TAM growth is to find an adjacent market where your technology might add value.  While the technology may not have to adapt much to this new market, many other variables may change and require substantial investment:  the channel, the buying process, the ecosystem, the nature of the problem and therefore sources of value, and so on.  A second warning in pursuing adjacent markets is the human tendency to over-analogize – analogies can be very helpful, just not if they close the mind to differences in market mechanics.  I've seen management teams blindly following fundamental "principles" of old market dynamics, wondering why the same tactics that worked so well last time are not working in the adjacent market. To avoid these mistakes good growth strategy must be more like the scientific process – hypothesis testing based on asking the right questions, and answering with facts (or as close as you can get to facts!) Sounds obvious as it is, it just isn't that common.

Define Your Organization's Foundation for Growth

One of the most difficult things for anyone or any organization is a hard, honest look at differentiating capabilities.  What you're after are the building blocks of unique competencies. The idea is to match competencies to high growth opportunities.  Once in my early mid-career I was miserable and felt wrongly matched, unappreciated.  I wanted to change jobs, but had no idea what kind of career path would inspire my drive to grow.  I read a terrific book that took me through a series of exercises to identify my passion and define my competences so that I could find a better fit job and make good money.  One exercise was to write a 50 page "story" of my career history, what I liked, what I was good at, and then decompose that story into "building blocks."  The idea was to see what other career paths might utilize these same building blocks.  It worked! 

Corning and the CCC Process

In 1879 Corning made glass envelopes for light bulbs.  Since then they have continuously committed substantial investments in Research, organically creating several multiple billion dollar businesses:  From silicone in the 30's to ceramics in the 50's to optical fiber in the 70's, to computer screen glass in the 80's, to Gorilla Glass in the 2000's.  Corning has for decades executed innovation process with rigor, but the core framework for growth rests on a simple idea of the three Cs: Finding important problems to solve for Customers using Capabilities that are unmatched by Competition.

3-Step Strategic Response to TAM Erosion

Step One:  Get your head out of the sand, go to the Board and resolve the dilemma between slower, but more profitable growth (share of wallet) versus less profit short term to find and develop new TAM.

Step Two:  Consider adjacent TAM opportunities where you have obvious technological value and then doggedly search for differences in the new market that will require additional investment.

Step Three:  Go beyond adjacent markets to high growth "white space" opportunities that match a deconstructed view of your core competitive strengths to hard problems worth solving.

Then, go do something, fast, before it's too late.


Growth Targets: When Does Size Matter?

Carrot2Chris Halliwell, Executive Director of the Technology Marketing Center here with timely Q4 thoughts about making your number next year.

It's that time of year, to put plans in place that deliver those ambitious sales goals that management has promised to the Board.  You need to define high value targets for growth, priorities, and a game plan.  So here are some thoughts to consider.

Your growth may depend upon avoiding the biggest customers and markets you serve. The question is: would you rather dominate a small fast growing target, or struggle to take share from the incumbents in a slow or no growth large target?  You can tell by my question structure (or if you've ever met me) which one I'd advocate.  But it's not that obvious to most sales and marketing teams out there, and even if it seems obvious to you, how do you convince others?

Growth Begets Growth

At the very least, when the sales and marketing team gets together to strategize on how to meet next year's sales objectives, take a look at target CAGRs (compound annual growth rate), last 3 years and projected next three years.  If you can penetrate a target account or segment that is growing faster than the overall market, you automatically grow faster than your competitors, i.e. take market share.

When targets are growing that typically means there are "greenfield" business opportunities that can be pursued with everything you've got, especially if you are not distracted by trying to pry a customer out of the clenched teeth of a competitor in a big, slow growth market.   It's expensive to do that.

The great marketing, former nerd, guru Bill Davidow, developed a proof, for the technically oriented managers in your organization, that the cost of entering a market/account against an entrenched competitor is 70% of the incumbent's share multiplied by the size of the market/opportunity. (Marketing High Technology, Chapter Two and Appendix A).

 

GE/McKinsey Opportunity Analysis Matrix

Matrix-Example-1024x498The GE opportunity matrix is a handy tool that management teams can use to evaluate a set of growth targets that visually compares market size and your market share in a space you design to consider CAGR, as well as other success determinations of both market attractiveness and your ability to compete. Here's a link Opportunity Analysis, and if you want a copy of a spreadsheet that generates this graphic, let me know.

All Greenfield, New Technology Adoption Growth

New technology adoption is a special growth case, frequently the issue in B2B markets.  Here the real competitor is some alternative process or method or business case.  When considering your targets for next year there are some rules of thumb about big customers and big markets. 

Should you target large accounts?  Yes, usually.  Larger accounts tend to have more internal resources to evaluate and implement new technology.  Early adopting accounts are therefore large accounts, however, not all large accounts have the risk appetite or technology evaluation resources necessary to take on your particular new technology.  There are four types of large accounts involved in growing a new technology category.

  • Innovators: Large accounts that actually act more like smaller accounts, in that they love new technology, all new technology, for its own sake. They will generate early sales, but will not generally create a market by influencing other accounts to join.  Typical examples here are behemoth customers that operate in very concentrated segments, E.g. aerospace.
  • Early Adopters: Large accounts that see your technology as critical to their business strategy and have a lot of internal technical resources related specifically to your technology area.
  • Opinion Leaders: Hold majority market share in a segment of interest to you, but do not have the internal technical wherewithal to "be first".  Once they do adopt, the rest of the segment will fall in line.
  • Early Adopter Opinion Leaders: BINGO!  The absolute best target for new technology adoption.  They have the internal resources to commit and fully deploy, and their use will drive all others in the segment to consider the new technology seriously.

Which Market Segment Makes The Best Target for New Technology?

Here again, we wrap up where we started:  the biggest segment is not necessarily right, you are looking for the best segment right NOW.  In other words, consider adoption order of the segment. 

Goldilocks-3

TOO HOT: Early growth in new technology categories typically does not come from the largest accessible segment because that segment is humming along happy with prior technology, or at least happy enough not to cover cost of switching.

TOO COLD: Neither does growth come from some brand new application, now possible with your technology, but not yet fully realized as a segment.

JUST RIGHT: Growth comes from an existing segment with an important problem standing in the way of segment success that cannot be solved ANY other way, except to employ your new technology.  In other words, you have compelling value.

Here's an example:  Advances in video capture, low cost sensors and web platforms bring a new category to behavioral animal research in drug development.  Do we target a big obvious, and very competitive, vertical market like cancer? Do we target the very exciting, but nascent, market for age-related degeneration?  Or do we target a business model that allows novel behavioral measurement across any number of vertical indication markets?  Where is the growth?

What do you think?


Sales Doesn't Listen to The Voice of the Customer

3-monkeysChris Halliwell, Technology Marketing Center Executive Director signing in to the Leaders' blog.

 

Next time you find yourself assuming, or being confronted with the assumption, that "we know what customer's need because our salespeople and senior management talk to them all the time," here's some food for thought because you might be mistaken. 

 

Voice of the Customer Defined

Most everyone will readily agree that industrial and B2B technology companies can't innovate or sell value if they don't understand customer strategy, motives, and operational success metrics.  How do we gain this understanding? CEO musings? Secondary research? Trip reports?  Sure, if stratospheric observations about obvious truths, followed by a cacophony of feature requests makes sense to you.  Now, you would think that after decades of expensive training on solution selling that the Sales department would be the high likely place to understand customers' problems.  It's just not.  What sales does is a great job of is shouting a relay of customer tactical concerns that stand in the way of closing a sale (features, price, support).  This is not VoC insight, it's good to know, but it is without context or insight as to value.

 

What Ever Happened to "Questioning for Need"?

AID INC

My sales call/process training came from IBM eons ago, but I still remember the drill: establish rapport, question for need (aka qualify), initial benefit statement, feature/advantage/benefit presentation, address objections, close.  Some version of this was taught at most major U.S. companies, at the time Xerox was famous for this, then Miller's Strategic Selling and Eades' Solution Selling, across segments to healthcare with AID,Inc.'s model you see here.  Are most,or any, of the sales people you work alongside actually listening for need and value?  Do they turn off the PC, make eye contact, and get curious? Doubtful, and just to hammer the point home, go look at your CRM system where the default automated process does not require questioning/listening, in fact may cost you more for a custom module, and where Description (qualitative) capture fields are not mandatory to move leads down the funnel.

 

You Have Hundreds of Customers: Lead Qualification Fell on the Floor

In fairness to CRM's lack of insight capture capability, "interviewing" and "questioning for need" is often lumped into the overall task of lead qualification, and most CRMs assume you are tracking already qualified leads. This makes a lot of sense in that you don't want your most expensive, high touch, sales people wasting time on unqualified/poor fit opportunities. In highly automated Saas businesses, qualification has been built into Inside Sales tools such as Marketo, and emerging social media listening and Lean Canvas tools. In more traditional industrial and hardware businesses, target selection, characterization and qualification seems to fall into some fuzzy netherworld between sales and marketing.  Marketing professionals:  step up! Get out there, listen to the voice of the customer, define value, understand fit, make strong recommendations on sales targets, and stay involved to learn/course correct over time.  Call me if you need help.

 

You Have Tens of Customers: Listening is Account Development

Charan

If you have a relatively concentrated set of customers that generate the bulk of your sales, you probably have close, and more insightful, customer relationships.  Here, the problem is not so much listening (I hope for your sake) as it is capturing, synthesizing, and sharing implications of customer insight.  There are probably many ad hoc ways in which you share customer information among sales, operations, marketing and management folks, but I would advocate the use of a more formalized process to make sure the right questions are always asked, and that you are squeezing the most you can from customer listening to add to/capture value from customers.   Sales professionals: step up!  There is a fantastic book that outlines a so called Value Account Plan that documents increasing insights into your customer's business over time.  It's called What The Customer Wants You to Know.  If you need help, call Ram Charan.

 

 

 

 


Marketing and the Fuzzy Front End of B2B Sales

From the desk of Chris Halliwell, Exec Director of the Technology Marketing Center.  

Fuzzy Clear

In my post on the super book, Predictable Revenue , I discussed the growing importance of marketing in the sales process itself, starting with a finely drawn characterization of target customers, their problems, and their buying habits.

What is a Fuzzy Front End?   

This phrase (FFE) refers to the process of clarifying a set of uncertainties pre-Phase Zero in the innovation (or product development) process.  There's a ton of literature out there examining the fuzzy front end of innovation, much of it detailing the contribution of strategic marketing insight to paint an effective picture of trends, problems, customers and competitive advantage.  

The point is made that FFE insights have huge leverage on the ultimate success of the new offer, and that sloppy thinking in the FFE can drive significant development inefficiencies, as well as cost of change, later in the NPD process.

Clarifying the Front End of New Product Sales

This post asks the question:  what can we learn, and build upon, from strategic marketing contributions to the front end of innovation that will improve the effectiveness of selling and capturing the value of new products and services?

The (B2B) sales effort suffers from fuzzy thinking as well.  Efficient sales and satisfied customers require crisp answers: Who are the high likely target segments and customers -- where should we "point the car" in the morning?  What is the recognized problem we are solving, and what is the economic impact of our solution on the customer's business? Where is the competition's Achilles Heel? Do we know the key players, issues, and information sources that are influencing buyer perceptions?

And, just as FFE insight has has huge impact on the success of innovative development, FFE sales clarity can have significant impact on profits over time affecting both rate of growth and prices. Here is a mapping of innovation FFE insight to Sales FFE insight for you to use as a guide:

FFE

 

 

Disciplined VoC: Source of All FFE Insight

TMC continues to recommend Ed McQuarrie's Customer Visits technique for effective team insights in the innovation FFE. It works equally well for generating Sales FFE insight, however the interview questions are more detailed -- still from the customer's point of view -- and execution oriented. 

Here are some examples to further explain.  

OPPORTUNITY ANALYSIS: For innovation FFE we might ask, "what are your top 3 initiatives to improve your business?", where for sales FFE we would ask, "how are you managing and measuring the success of initiatives relevant to our new offer?" or "what sources of information are you using to evaluate potential solutions to your problem?"

MARKET ANALYSIS: Most (but not all) of the relevant data in innovation market analysis comes from quantitative sources -- how many buying entities potentially have the problem we have identified?  Sales FFE lends itself more directly to VoC interviewing techniques that probe more deeply into hypothesized differences in buying behaviors, business model implications, and "whole product" package expectations.

COMPETITIVE ANALYSIS: Innovation FFE activities here take a look at capabilities and potential supply chain relationships for your business, and for the businesses of competitors.  VoC insight during the Sales FFE enhances this analysis by asking about customers' perceptions of your, and your competitors' position.  And, most importantly, detailed VoC efforts here are needed to build a model of comparative economic implications of your proposed offer on customers and supply chain partners.

Strategic Technology Marketing Should Drive FFE Insights

Do you have a Strategic Marketing function in your business?  Many high tech businesses have not designated this function, or if it exists, there is often confusion about its contributions.  If FFE insights are left to management "gut", they can suffer from a lack of professional discipline and tools.  Even more unfortunately, FFE thinking is sometimes foisted upon the sales support or product planning teams who may lack training in strategic analysis, and who often struggle to get out of the short term weeds so they can see the forest.

 

 

 


Marketing Tactics That Drive Predictable Revenue

This is Chris Halliwell, Executive Director of the Technology Marketing Center with a discussion of the mind blowing book Predictable Revenue by Aaron Ross and Marylou Tyler, and and some thoughts about what it means for industrial and technical marketing leaders.  

Predictable Revenue

If you read one business book over the holidays...

Two observations or "facts" came to my attention over the last few months that have me wondering about implications for effective industrial/B2B marketing. One: 70% of all B2B purchases start with a google search (here's a TMC Roundtable Discussion on that topic); and two: most B2B companies give their least mature and qualified leads to their most expensive resource...field sales.

The googlization of sales means that customers are gaining their own information and shaping their own opinions about options well before they actually engage with a live salesperson.  B2B corporate response to these two observations is binary.  Most management teams don't think much about these issues, instead continuing to place market development and growth bets on hiring new field sales people.  On the other hand, SaaS sector players, particularly salesforce.com, have completely transformed the roles that marketing, inside sales, and field sales play in developing and closing new business.

The x-salesforce.com executives responsible for closing 6 figure deals without involvement from field sales (read that phrase again and think about it) have written Predictable Revenue, an easy-to-read playbook for marketing and inside sales to implement something they call Cold Calling 2.0.

 Customer and Influence Definition and Identification

The book describes the Cold Calling 2.0 process mostly from the point of view of sales, but whats interesting to me is that as the internet moves traditional early sales tactics from offline to online, it thereby moves some traditional sales functions to marketing, at least demanding we take a leadership role. 

The first step in CC 2.0 is getting clear on your ideal customer.  If segment, customer and value definition isn't part of strategic marketing, then I don't know what is.  This becomes an even more critical marketing function as we spend more time and resources on activities to drive website traffic such as "thought leadership"  (note that blogs are critical here) and online content marketing.

The first step in any purchase process is "Should I focus on this problem?", and later, "Whose solution is best?" In an online world it is even more critical that marketing and sales are aligned on customer and problem characterization, and that marketing take responsibility for getting the "Why you should focus on this problem" message to the right influence peddlers and customers."

[Marketing automation hint: Hootsuite, Buffer, Sprout Social]

Converting Suspects to Prospects to Leads

The Suspect list marketing must build comes from customer detailing and online/social media sleuthing.  As soon as a Suspect shows any interest in your company's information they become a Prospect.  The key online tracking tool for Prospects is capture of website visitor registration via content download or event/webinar registration.  With the Prospect list in hand, the marketing "sales" tool of choice becomes an effective email marketing campaign.  

Predictable Revenue tells us that the internet has drastically shifted power from sellers to buyers," so the goal is to make it easier for prospects to choose their own adventure in how they get to know a company -- we are urged to give customers multiple routes and to remind them if they stall. We know from sales literature that it takes 7-13 touch points to fully qualify a sales opportunity, so it makes sense that marketing automate and implement a good number of initial touch points through email marketing. The book is very practical and includes great detail on what makes for an effective email.

"Permission based direct email marketing is still the most important marketing technique to both develop new leads and to nurture old ones." You can establish expertise, build trust, and promote with this tool." Full disclosure: the book assumes that the Marketing Department exits the sales cycle after Suspect ID and Prospect capture and it is Inside Sales, rather than Marketing, who designs and implements the email campaign.  It's a point of debate, but I don't see why professional Marketing people cannot step into this role -- it seems natural to me as we are authors of the value proposition.

[Marketing automation hint: Hubspot, Marketo]

Cold Calling 2.0

Handoff to Inside Sales

The handoff from Marketing to Inside Sales (assuming you have an Inside Sales department) is another critical juncture of alignment across organizations.  At some point, with some specified and agreed metrics (like a scoring system), the email marketing touch points yield a qualified Lead which is then transferred to Inside Sales. The bulk of Predictable Revenue is a detailed manual for running an incredibly effective Inside Sales organization.  Inside Sales takes Leads and provides much more personalized (E.g. phone calls) and tailored touch points to qualify them to Opportunities, worthy enough to be given to expensive and limited bandwidth professional field sales people. 

[Automation: The Cold Calling 2.0 process, with actions, metrics and hand-off milestones, is defined and tracked through your CRM system.] 

If you are interested in this topic, download Predictable Revenue.  It is bursting with Best Practices and will make you think about how you can turn your Marketing team into a more productive, more measurable, and more effective part of the revenue generation process in your company.

 

 

 


Lanchester Strategy: Winning Against a Dominant Competitor

Chris Halliwell, Executive Director of the Technology Marketing Center, with tips to help you create the laser focus you'll need to take down Goliath.

Lanchester

 

Yano Shinichi has written 3 books on Lanchester Strategy.  First, an explanation of Lanchester's force equation (summarized below), followed by books that discuss application of the strategy from the point of view of the weaker competitor, and then from the point of view of the strong. 

 

 

We Have No Shock, No Awe

On a recent client project we were tasked with finding a way to grow market share against a dominant competitor in Europe. Our competitor's share ranged from 70-90% in it's home market and other large countries, to 10% in some smaller markets. Just to make things more interesting, we had some incremental product advantages, but no compelling differentiation.

Why engage in this type of battle?  Although you can argue with the business logic, you've heard it:  we need this product to fill a hole in our line that currently invites competition into accounts, and anyway, we have successfully bloodied this competitor with other products and in other markets.   If you want to elevate marketing beyond brochures and webinars, take on an entrenched dominant competitor in a low growth market without benefit of technological advantage.

 

Fred-Lanchester-marketing-strategy-150x150

Fred Lanchester,a mathematician and engineer, derived laws on the numerical superiority of force, He calculated that the combat power of a force is the square of the number of members of that unit. The advantage a larger force has is the difference of the squares of the two forces.  So a two to one advantage in units will inflict four times the punishment, three times as many units will have nine times the combat ability and so on.

 

Divide & Conquer

Instead of shrinking from the mathematical proof of our doom, the team considered how we might use Lanchester's Law in our favor to fight the dominant competitor and gain share in the European market.  First, the Law is about people, about units of force, about members.  So we began by seeing our differentiation problem as a people problem, as a service issue, not a product issue.  Next, we realized that success would depend on precision alignment and execution of a strategy focused on segments where our opponent's service capabilities were weakest.  Simply put:  where should we put more people in place providing value adding services to gain a preponderance of force in selected market segments (countries)?  

That's All Fine, But...

The implications of Lanchester's Strategy for the client team included refocus from product orientation to excellence in understanding and delivering service value, E.g. configuration services, design services, test services, and so on.  This is not an easy transition for a technology-enabled business.  

Even more challenging, the segmentation strategy required sales to embrace the idea of focus on smaller countries where competitor service resources were weakest, walking away (at least temporarily) from the larger, obvious countries. Divide and conquer simply will not work without sales management buy-in. 

Finally, management has to support this strategy with the investments needed to profitably compete on service across a disparate set of smaller targets, for instance careful selection of local service partners in smaller markets, and on automation of support tools and information.

Service development and segment focus get some lip service, but continue to be challenging for many industrial and high tech organizations. Lanchester's Laws appeal to technically-minded management, and can be used to roughly estimate the investment needed to whittle away at competitors' share to create a return. So, I'd recommend putting this concept in your pocket when it's time to lead your team into battle.