There’s a myth that as you get more senior, you get to make more autonomous decisions about what happens in your business – what strategies to pursue, tools to buy, markets to go after and so on. “I’m the Head of Marketing, so surely I decide all the marketing stuff!?”
In fact it’s the opposite – the more senior you get, the fewer autonomous decisions you make. Why? Because those decisions have a wider impact, so you need to consult more with others and bring others along with you. That doesn’t mean you don’t own decisions – you still need to lead on making the right choices and pushing changes through. But you don’t get to do that all on your own.
I’ve used the following framework to help me decide how to make different types of calls – hopefully you’ll find it useful. Whenever a new decision needs to be made, I try to classify it in to one of three categories:
Decisions I can make on my own. Using the example of marketing, there are certain things which have more or less zero impact outside your department. Things like “What subject should I put in this email header? What messaging should we use for this campaign? How should we set up Marketo to work more effectively? What ideas do we have for getting more people on the newsletter?”. I struggle to think of more! You might still choose to communicate what you’re doing for info – transparency is always preferable – but it’s optional and something you might do after the fact. I think, for a senior role, this is around 5-10% of the decisions you make.
Decisions that I make, but where I need to consult others. If something is a marketing problem, then you should make the call. However, this doesn’t mean you don’t need to consult your partners first – Sales, Product, Finance, HR, Technology (depending on what the question is of course). Most decisions you make will have upstream or downstream consequences – if I change our Marketing Automation tool, what will happen to the leads going to Sales? If I decide to target Belgium instead of Netherlands, how will that impact Sales figures? If I decide to position our product differently, how does that align with the Product roadmap? And so on. Crucially, this isn’t just about telling people what you’re doing – you should be consulting with those people to really understand the impact, then adjusting your thoughts accordingly. The trick is being clear upfront about the decision-making process – that yes, you’ll be deciding whether to switch to Marketo, Hubspot or Pardot, and you’ll be listening to everyone’s views on the subject. But ultimately you’ll carry the can for that decision, so it needs to be yours. I estimate around 70-80% of decisions are like this, depending on your role.
Decisions that I want to happen/influence, but aren’t mine to make. We all depend on each other to be successful – the success of a marketing department is wholly dependent on the activities of other teams. We can’t sell a product that doesn’t exist (well, you can, but you shouldn’t!). Sales teams close our pipeline. HR helps us build our team, and so on. And we’ll often need those teams to do things for us. But if it’s a Product, Sales, Finance or HR decision to make, then it’s not your call – and it’s important to recognise that. Your role is to try and influence that plan. Sometimes you’ll get your way and sometimes you won’t. If it’s the latter, you need to adjust your plans accordingly and still find a path to success – there will be reasons why option B was taken instead of option A, and you need to find a way to accommodate that decision. Around 10-15% of decisions are like this, in my experience.
Being clear at the start of a process on which of these you’ll take is really the difference between a decision that lands with an organisation (because you’ve taken their views into account) and a decision that never quite gets taken up and implemented. The real skill is balancing the consultative approach with the importance of actually making a decision and driving it through. Not easy, but it’s a far stronger approach than making calls on your own – and none of them ever being implemented.
A friend is looking for a new role at the moment. He’s lucky enough to be able to pick and choose what he goes for, so I asked “What really attracts you to a job? What puts you off?”. It’s always interesting to know what people are looking for, how to genuinely attract great candidates (or put them off of course).
His response was interesting – “The biggest red flag is when they talk about long hours. Something like ‘This won’t be a 9-5 you know!’. Something like that really worries me”. I pushed a bit further, wondering what it was in particular that worried him.
“It’s a sign that they don’t know what they’re doing. Any manager who know how to do his or her job, should know how to fix processes and automate systems so that the job could be done in normal hours. And I don’t want to work for someone who doesn’t know what they’re doing – it will just frustrate me”.
There’s a lot being written at the moment of how important flexible working is, for work/life balance. And a few companies are even pushing towards 4 days weeks or 4½ day weeks. But that wasn’t the point here – the issue was that, if a manager is consistently asking their team to work 8am-6pm, or longer, it shows that they are winging it – they’re not making the effort to improve productivity, by automating systems and fixing processes, and therefore don’t know how to run a department properly. And who wants to work for somebody like that!?
Of course there are blips – sometimes end-of-quarter can get a bit much. Planning processes often don’t fit into a neat 37 hour week. And if you’re out on the road, you have to do what needs to be done in the time available. But in the general course of things, 37 hours should be enough to do most roles.
Crucially though, if this doesn’t sound like reality for you, remember, it’s not completely up to you to fix it. This is largely the role of a good operational manager – someone who understands the importance of fixing processes so that that painful activity only takes 20 minutes next time, instead of 5 hours. This is a Sisyphean task – hence why it’s called Continuous Improvement – but you need to get started.
I’ve always believed in automating and fixing processes. Sometimes this come from buying tools, sometimes from fixing processes, often a combination of the two. Some of the improvements we’ve made in marketing the last six months include:
Using Canva to significantly speed up production of ads. We’ve created core templates so that we’re not asking the design team to repeatedly produce the same thing, and we can create ads quickly in multiple languages.
Improve processes around briefs and tickets – like any fast growing company, there’s too much to do. So many great ideas, so little time! For one part of marketing we’ve already moved off JIRA and onto Airtable, fixing lots of associated workflows at the same time, and will likely follow suit for other areas too. It’s improved flow enormously and cut out unnecessary manual steps that caused a lot of pain for various folk.
Improve autonomy for regional marketers. This isn’t something a tool can fix – this is about how you collaborate as a team, when you need to ask for permission to do something, when you can approve something yourself and so on. Personally I’ve always believed in “Ask for forgiveness, not permission”, so I strongly encourage everyone to do things, to try things without checking in with five other people first. If, for example, you spot an opportunity to place an ad somewhere, and it’s in budget – go for it!
Brand guidelines – again, rather than asking for all work to be checked all the time, by providing the company with brand guidelines, it enables people to create ads and copy themselves – they can do the work themselves to figure out if, for example, they’re using the logo in the right way, without checking in with someone first.
WordPress permissions. On the same theme of autonomy and delegation – set permissions for people on your website so that, for different sorts of copy, the right people can make the changes needed as-and-when. NB: these permissions should be very different for the homepage vs. a blog article! But for the latter, any marketer should be able to write, publish and share a blog on their own.
These all sound like quite minor things. But continuous improvement is a long game – lots of small fixes that, one by one, lead to enormous improvements in productivity. We’ve already improved our speed to create agile, relevant ads down from weeks to hours and, hopefully, given the freedom to various marketers to jump on opportunities when they see them. And we’ve certainly made the process of managing expenses much easier – as an employee it’s almost trivial now, and I know there’s far less pain for our finance team too.
So anyway, next time you go for a job and you hear a lighthearted quip like “We like to burn the midnight oil here, that’s alright isn’t it?” – run a mile. It’s not laziness on your part, it’s a sign that your future manager doesn’t quite know how to run a department, and that’s something that will impact your job satisfaction far more than the number of working hours in the day.
ROI calculators are a pretty common tool amongst B2B marketers. On the face of it, the logic is simple – show a calculation of how the time saved from subscribing to your product equates to money and how that money is less than the annual subscription cost charged. Then surely the sale should be in the bag – who wouldn’t want to save $$, how could anyone say No?
I think this sort of calculator is useful for a limited purpose – it provides a supporting tool for your advocates in the org to help them convince their bosses to make the purchase. And for that it’s valuable. However, I’d argue it doesn’t help with the core problem – convincing buyers of the real value they’re getting – as it doesn’t help with the core reasons why people actually make purchases like yours.
An ROI calculator usually looks something like:
Your devs/finance team/marketing team/HR/etc. cost $50 an hour per person in fully loaded costs.
At the moment, 10 of them are wasting an hour a day on repetitive tasks – tasks that your product can automate away.
In any given week that’s 10x50x5 = $2,500 wasted on pointless tasks. In a year, that’s $125k.
Your software only costs $35k per year. So that’s an ROI of over 250% ! Or more simply, a straight saving of $90k a year.
At this point, you can produce your pen and ask them sign on the dotted line (well, click a button on a Docusign document) and start figuring out your commission.
Why doesn’t this work? There’s some lower level arguments to be made against a calculation like this – do you really believe the figures? Is all of that time genuinely saved or does someone else still need to do some manual work somewhere? Is the org really doing the task that badly today? And of course this is missing the implementation fees and ongoing work needed to keep the automated system working.
But I think there’s something more important, particularly when selling to senior buyers. There’s a dual problem with this calculation – firstly, that to make this saving the company would effectively have to fire someone, and secondly, in today’s environment, hiring and retaining staff is a far bigger headache than saving costs from letting people go. The calculation assumes an environment where the manager currently has too many people working for them, and is being asked to make savings. But this isn’t the reality for almost every manager I’ve spoken to in the last 10 years – the perennial problem managers have is growth and finding talent to fuel that growth. What they’re asking is “How do I find great people? I’m short-staffed, and just can’t hire the people I need. And when I do hire them, it’s such a hot job-market, I lose them unless I keep them happy!”. I can’t remember a single situation ever where someone has bought a product/service from a vendor, then “made the savings” by firing someone – it just doesn’t happen, and so is not believable to a client.
The real pain that clients have is hiring a great team, building and developing that team, then keeping them engaged. By building that great team, they not only get the obvious advantages and pride of running a great organisation, they also get multiple benefits from being able to provide much more value to the rest of the org. I.e. instead of my team being seen as a “Cost centre, to be reduced wherever possible”, it’s seen as “An incredibly value part of the company that’s helping us grow and be successful”. This “Soft ROI” is what senior buyers are really worried about. Here’s how I’d describe the world of the average finance team, from talking to our customers:
Finance teams are generally seen as a “necessary cost”. There is an unfair perception that they add little value.
They spend enormous amounts of time on manual drudge work. I’ve seen this sort of activity called things like “Hamster work”, “Treacle” and similar terms, but the idea is the same – you have humans doing work that computers were designed to do.
This is particularly bad in finance teams – practices that would be deemed unacceptable in a development or marketing department – are somehow okay in finance. I’ve seen teams working till midnight manually refreshing spreadsheets every 30 minutes, teams spending 1-2 weeks on month end (I mean, there are only 4 weeks in the actual month!). This sort of time-wasting has been reduced or removed entirely in most other parts of a high-functioning company.
This drudge work leads to a very specific people problem – how do you keep your talented people motivated? There’s a chance that, when you hired them, you weren’t fully transparent with the manual work involved – now they’re here and they’ve had that rude awakening, they’re not happy about it, they’re getting de-motivated, and they’ll start to look for other opportunities.
In parallel, your team isn’t doing any particularly interesting or value-add activity. This is problem both in reality and perception – that crucial project to work out the ROI on your vast marketing budget has been on hold for 9 months now, leading to significant waste. And your boss can only ask you so many times why it hasn’t happened yet?
This all leads to employee churn, poor performance overall, and an endless cycle of hiring, and less-than-impactful work.
This is an example from the world of finance, but of course the same could be said for other teams – though I’d argue to different degrees. The sort of waste I’ve seen in finance teams was ironed out years ago in development, where you see people automatically running 512 cloud-based tests at the push of a (build) button without a manual step in sight – the sort of automation finance teams can only dream of.
How do you present this value, if an ROI calculator isn’t enough? Through great marketing – all great marketing is based on a deep understanding of your customers’ genuine pain points and how you can resolve those pain points. Instead of (or “as well as”) an ROI calculator, I’d be writing content about the pain points above. Show how you understand your customers’ worlds, how you understand that pain and can help solve it. It’s also a question of positioning – if you position your product as “A tool that helps save time”, then you’ll never really resonate with the manager’s pain. Alternatively if you position your product as “A service that supports you transforming your team from a cost centre [to be reduced] into a high-performing and motivated function valued by the rest of the company” – and you can connect the dots between that message and your product – then this is a much stronger way to appeal to the target audience.
As I mention, I think ROI calculators still have their place. Once you’re in the door, and you have an advocate on the inside, then a tool like this can really help him/her make the case to their boss, who might want some numbers to back up the investment. But you need to win hearts and minds first – and that happens by understanding peoples’ real problems, and finding a way to help them solve those problems – ideally with the help of your product of course.
I’ve had this conversation about 6 times in the last year – how can you scale from selling to small businesses (SMBs), up to Enterprise organisations? What are the marketing challenges? What’s necessary, what’s nice-to-have, and what’s a red herring? This is something we’ve done incredibly well at Redgate over the last five years (from almost nothing, to now being more than half of our business), so, “just for the record”, I wanted to note down the things that I believe are important for success, and so that, when this conversation comes up again, I can just refer back to my notes!
It’s important to note, this is what worked for us. We have a particular product set, in a particular market. We already had certain advantages and certain disadvantages. And I haven’t put much here about the ordering of implementation – this would depend on what you already have, and where you really are short. For example, if you already have a senior sales team in place, that’s great, you can jump past item #1 on the list. But if you don’t, that would be your first port of call.
Additionally, there are some pre-requisites here. The most obvious is that you have some sort of product-market fit. You must have this if you’ve already been successful with SMBs! But if you’re still pre-PMF, none of this will work. This is a plan for building an Enterprise go-to-market on top of a successful SMB business.
Anyway, here is what I believe to be a check-list for growing your business from SMBs to larger enterprises. This is a multi-year strategy – you’ll need faith in this all working: don’t expect results in month 3. But it will work, if all the pieces fall in to place.
Hire a salesforce capable of the Committee or Consensus Sale. The first thing isn’t marketing! But any work you do understand customers, generating interest, changing positioning etc etc, will be a waste if you don’t have a great team in sales who can manage the deals, understand the needs of a complex group of buyers, take a sale through a standardised sales model and, eventually, close the deal. There are many different models for sales organisations and of course, if you have a smaller org, you don’t need anything complicated. But I’d suggest it’s necessary to have at least 1-2 people who can pick up some of those early Glenngarry leads, and really prove out your model.
Build your Ideal Customer Profiles. Selling to SMBs you might have had a very simple ICP – perhaps you just needed to convince an end-user, possibly a team-leader. Very simple, and singular. But to sell to the Enterprise, you’ll inevitably be marketing yourselves to a wider group of more senior folk. NB: You can’t and mustn’t forget about the end-users: most enterprise sales follow the pincer model – you need to appeal to both end-users and the more senior people. But you can’t ignore the latter anymore. So who is your key senior decision maker? Heads of IT? Head of Finance? C-level execs? VP of Operations? Figure this and then make sure you know everything about their world – their concerns, their pain, their pressures. And then, in the next stage, you need to make the link between their world, and your offering…
Figure out why and how your offering is uniquely positioned to solve the problems of your ICP. This is one of the hardest bits. As I say, you’ve had success selling your product to a more junior buyer at an SMB. But that doesn’t mean that the “VP of Operations” (or whoever this persona is) understands what you offer and why she should care. That VP has a world of problems that she’s trying to resolve right now and unless (a) you’ve figured out which of those problems your offering addresses, and (b) why your offering is the best solution to that problem – you’ll never get her interested enough to talk to you, however many marketing dollars you throw at your campaigns. This takes research, talking to those people, a deep, deep understanding of the true value offered by your product, and the skill to the link the two. Never underestimate the difficulty of this challenge.
Figure out your target accounts. I.e. the organisations most likely to buy. Depending on the size/scale of your org, this might be 10 accounts, 100 accounts, 1,000 accounts or more. But you need data about (a) technographics, (b) firmographics, (c) ideally, history of interest in your market, to build out a set of target accounts. A “Quick win” here – if you’ve already had some success selling to larger orgs, just not nearly enough then target these warm accounts first. If “Bank of America” have bought $1,000 of software from you, then that’s an “in”, that should increase the likelihood of them appearing in your account list.
Build an Account-Based Marketing capability. Specifically, you need field marketers working in partnership with your sales teams, who understand how to run 1:1, 1:few and programmatic campaigns to targeted accounts. Unfortunately, this isn’t a cheap skillset. But there are an enormous number of resources on what you’re looking for (e.g. SiriusDecisions), so you can start there.
Hire the BDRs and SDRs in sales to work in partnership with the field marketers. I can’t emphasise enough how important the partnership is between sales and marketing. If there’s mis-alignment, disagreement, if you’re going after different accounts, don’t agree on strategy and so on – then you’ll fail. The core of great collaboration is working together on the same goals – hiring BDRs and SDRs in sales or marketing to work directly with your field marketers is key.
Build the tech stack. You need a decent CRM (likely Salesforce…), a world-class marketing automation platform (we use Marketo) as a starting point. On top of that, there are two essential ingredients to a successful Enterprise GTM – a great sales prospecting tool (we use Salesloft – very highly recommended) and a “buyer intent” platform. We use 6Sense for the latter and love it, though Bombora is another contender here. Both of these are necessary for success – the first because, when you’re prospecting into larger orgs (with orchestrated plays, worked out in conjunction with marketing), there will be a very complex set of interactions between you and an array of people at the target org. You can’t manage all this by hand with multiple accounts, you need some level of orchestration. For the latter – “Buyer intent” (specifically – finding companies that are looking for solutions like yours before they’ve come to you) is a key tactic for targeting your effort. When you know that a given company is looking for solutions like yours, you can use the platform to spend on advertising targeted directly at them (rather than mass advertising which misses the target in 99% of cases).
Pricing and Packaging. You need a pricing and packaging structure that matches how enterprise orgs want to buy. Too cheap, they won’t even look at you. Too expensive – well, unless you’re already the market leader, again, why would they look at you? But there’s more to do than this – the model for P&P is also crucial. Annual contracts? Monthly? Per-user, pre-transaction, or some other model? The primary goal here is to not make your pricing model a talking point for sales. If a customer is questioning your model and finding it confusing, you’ve created a barrier. There are some great third party companies that can help with this work, we’ve had great success with ProfitWell for example.
Content, Case Studies and Thought Leadership. More on this below, but companies like to choose the winner in a given market, particularly if they’re new to that market. What can you do if you’re not the de facto market leader right now? Write incredible content about the market, the problems (your customers have), and how they should solve them. This insight comes from deep understanding of the market, but needs to be translated into great articles (there’s no point knowing things and not telling everyone!). You also need case studies from existing customers. Of course there’s an issue here – if you’ve never sold to an Enterprise, how can you write a case study for one!? You need to bootstrap this process – start with a well respected medium size org on your books, perhaps a well known name. Start there, then build up as you get more and more clients.
PR, analysts, article placement. How do prospects know that you, specifically, are the winning vendor in the market? They read press, they read articles, they go to their analyst. You need to be in front of all of these, and that’s all based on the thought leadership work you’ve done previously.
In a sense this is an over-simplified plan – how do these all work together? What do I do first? Are they all necessary? How do I know it’s working in the early days, when I don’t have all this yet? All very good questions. Here, I think it’s really important to show early wins, hence why getting senior sales reps as a first step. Those first reps won’t have all of the support and help outlined above – they’ll have to do a lot themselves, beg and steal to get what help they can. But if they can get a couple of deals over the line, this is incredibly valuable – for insights, for case studies, for analysis of “What worked here? Why did they actually buy?” and so on. Those early signs will also help getting buy-in across the org for this new strategy, something that will then fuel future growth and success.
We’re about to go into our quarterly review period at Redgate. We don’t just run QBRs, we also run reviews across all parts of the business. These are a chance to examine the last three months – what worked? What’s going well? What’s not going well and needs fixing? All part of a strong agile process for keeping an eye on what’s really happening, and making adjustments through the year.
But there’s a flaw in these meetings when it comes to marketing. The implication of this process is that the things we did in Q1 have a direct and measurable impact on the outcomes from Q1. I.e. when I’m talking about our Q1 outcomes, the activities that occurred in-quarter are the most relevant for discussion.
But that’s a very partial view of the truth. As all marketers know, marketing is a mix of long, medium and short term activities which, if played right, add up to the outcomes we all seek, such as pipeline for the sales teams.
We’ve just had one of our best quarters for marketing-sourced pipeline in a long time. I can’t say “forever” because we’ve changed how we measure things over the years, but a quarter-to-quarter growth of 20% is something I’m very happy with. I’m not giving absolutes in this chart, for obvious reasons, nor a key to what the colours mean!, but the chart below shows how COVID-19 hit Redgate for marketing sourced pipeline through 2020, then how we’re coming out of the pandemic stronger than ever:
So, great, and I couldn’t be more proud of the incredible marketing team at Redgate for making this happen.
But we’re trying to build a scalable, predictable revenue engine here. It’s not enough to know “What”, we need to know “Why?” – what did we do to achieve this? What can we re-produce? What activities had no impact, that we can cut? This is a Sisyphean task, full of estimates, best guesses, rules of thumb. And I thought back to a poster that used to be on the wall of our HR department (back when we all worked in offices!) stating “Not everything that can be measured is valuable, and not all valuable things can be measured” – which is particularly appropriate here. But we should at least have a stab at trying to know what influences these numbers.
Here’s my go, some based on data, some not. And I’ve given these in reverse “timescale” order – from things we did actually do in-quarter, ranging down to activities that have been in-play for years. And of course it’s almost impossible to weight these things – what was most important? What only made a small difference? Very hard to know..
Project to “Leave no lead unturned”. A slightly clunky phrase, but we made an operational change in Feb to hire a couple of great temps who are responsible for passing the right marketing generated leads to the right people in Sales. Like every single B2B company in the world, our internal systems for lead flow are less-than-perfect, so, while we fix those issues over the year, we have two people passing leads over by hand, ensuring leads don’t get lost in various buckets, or in the wrong hands. By doing this we at least know we’re maximising the revenue for each lead we do generate. Timescale: 1-2 months
Fast, agile response to a competitor mistake. Without going into details, one of our competitors made an error, and within days we’d made it clear to our customers that we were there to help them with an alternative if their bosses were asking them to “look around”. We explicitly didn’t “exploit” this error – we never mentioned the competitor’s mistake in any of our comms – but we did make sure that when people were looking for alternatives, that path was easy for them (for example, through comms and campaigns, through sales training – what should people say when these customers make enquiries? – that sort of thing). Timescale: 1-2 months
A launch. We launched a new offering in February. Of course you can’t do a launch every month, or even every quarter (it can call your credibility into question, if you’re constantly doing grand launches for point releases!). We try to do 1-2 “big” launches each year – incredibly well researched, meticulously planned, focused on real customer needs, and when we get this right (like we did this time), these launches resonate really well with customers. Timescale: 2-4 months to plan the launch, but the research goes back much further..
Experiments with digital spend. It’s so easy to just keep spending $$ on the same ads, the same channels (“If it ain’t broke, don’t fix it”). But end of 2020, we decided to do some bold experiments moving budget from A to B, and this has really paid off. What we found was the the efficacy of, say $1,000 is enormously different for different products at different lifecycle stages. Specifically, if a brand is well-established, then digital advertising is much less effective than for a new product or brand. This makes theoretical sense of course, but it’s great for the reality to match the theory. Timescale: 3-6 months
Internal marketing re-org. This is way harder to measure. But, we made some changes in marketing end of 2020, to reduce the friction between different areas and to make the partnership with Sales simpler. Primarily this was about changing the responsibilities for our field marketing teams in different offices, making it easier for them to collaborate with their local sales teams. It’s hard to say “That change made us $500k in pipeline”, but what I can say is that it’s made it much easier to collaborate on various projects (e.g. some of the things above), which I think would have been far less successful without the change. Sometimes your job is to remove barriers and hurdles, rather than add new activities. Timescale: last 6 months
Treating our customers with respect and empathy during COVID-19. Really? That led to marketing ROI!? We made a conscious decision in April 2020 that, during the pandemic, we wouldn’t exploit the situation for our advantage. We could have gone to customers and turned the screw on various deals, trying to take advantage of their difficulties. Instead we decided “How can we help our customers this year? How can we support our customers through this difficult time?”. We started things like the Redgate Community Circle, with a focus on educating customers (so that at least, through the year, our customers could spend time on self-learning). We made sure that, if a customer was struggling to get a deal or an approval renewed, we gave them that time and space, extending trial periods for example. We actively listened to the struggles they were having (e.g. healthcare orgs struggling to keep up with demand) and made sure adjusted our interactions to give them the support they needed – for example, providing additional free support to healthcare companies, no questions asked. Can I directly measure the return on this effort? No. Do I think it was valuable? Definitely. Customers like working with vendors who understand them and their pain. Timescale: 1 year
Moving out of the pandemic. Obviously this isn’t something you can “do” – we as vendors have had zero control over the course of the pandemic. However I think it’s crucial to recognise where your success is a mixture of internal and external forces. In marketing, we have a symbiotic relationship with our customers – we’re always trying to understand their concerns, at the same time as representing what our company has to offer. It’s obviously been beneficial to Redgate that our customers are feeling more confident, perhaps a little more willing to think ahead and getting back to solving some of their long-standing problems. Timescale: 1 year
Long term brand work. We’ve made a number of changes over the years to clearly associate the value customers get from us with the Redgate brand. Specifically, it should be trivially easy to remember “I learnt a lot this year about how to do my job better. It was Redgate that helped me out there”. Or, “I read a great article about what I need to do about problem X at my company – it was Redgate that wrote that”. We’ve done a lot over the last few years to simplify, simplify and simplify again our brands and the associations with that brand, which I think has at least partly led to current success. Timescale – many years!
Obviously I’ve missed a lot of things here – so many great projects over the last 12 months, small and large. And, as I mention, it’s really hard to to figure out “Okay, but which of these were really important?”. Problem with that of course – successful marketing is a complex combination of lots of activities, hopefully orchestrated together to give the result you need. No single activity is sufficient or even necessary for success, but I think you do need most of these things working together for growth.
But to go back to the original problem – how do we present a successful quarter as a set of repeatable, scalable activities? Should we just repeat all these things!? The skill is to choose between either stopping, maintaining or increasing these activities. There are a number of areas which are certainly in the maintain mode – the brand work, experiments with digital spend being just two examples. We’ll keep doing these, but not more. And a couple of things you can’t or shouldn’t “continue” – marketing re-orgs are very expensive, and I certainly hope that we need to do less and less work supporting customers during the pandemic – an option I’d be very happy to lose! But the trick is knowing what to double-down on – something I’ll be working on over the coming weeks.
Why do Marketing and Sales departments need to collaborate? Sure, it’s nice, but beyond people getting on better together, how can it really impact the numbers, the outcomes for the business?
We’ve just spent a month at Redgate improving the collaboration between the two departments and we can see the direct and measurable impact on new opportunity generation. Here’s what we did and what happened. NB: None of this is rocket science, these all seem like really obvious things to do. But it’s quite rare to see such a direct impact on the numbers, so I wanted to share “What we actually did” as it may be useful to others – it can be easy to miss some of the basics.
What is Collaboration?
To start with the obvious, it’s nothing to do with whether you “get on” or not, whether you’re friends. We have great relationships between the marketing and sales departments, we get on incredibly well, and we talk all the time. But that’s not collaboration.
I feel there are three levels of what could be called “collaboration”:
Sitting in a (virtual) room telling each other things – what your plans are, what the latest results are, your ideas for the future.
Sitting in a (virtual) room listening to each other. A step up from above, actively finding out what others are working on, trying to understand their goals, and how you might fit in.
Sitting in a (virtual) room looking at the same numbers, working on a common goal
The first two are fine, and communication is great. But the third is what I consider true collaboration – what is our shared goal? What are the (shared) numbers showing? What can we do to fix this, together?
And it’s the third of these that we kicked off at the start of 2021, and has shown direct impact on the outcomes we care about.
What Did We Do?
Redgate has a good problem (and has had that problem for a while) – too many “leads”. We get around 500 leads a day (a lead being “Someone who expresses an interest in one of our offerings, and gives us some of their details”). Great, what’s the problem? The problem is that salespeople’s time is invaluable and scarce. If we asked Sales to follow up on all 500 leads every day, they would waste an incredible amount of time chasing low quality leads, tyre-kickers, people who will never buy from us and so on.
This is a standard problem in marketing/sales and the solution is some sort of qualification process. There are various models out there (the SiriusDecisions Demand Waterfall being one of the more common frameworks), but we have a pretty simple process – use Marketo to score leads on two perpendicular scales – engagement, and firmographics, then only pass the good Marketing Qualified Leads (MQLs – the Glenngarry leads!) through to Sales. It’s generally around 10% of the total, or 50 a day. Then keep the rest back to be nurtured from within Marketo until they’re ready for prime time.
So far, so easy. But of course the point is that it isn’t easy. When you move from theory into practice, here are some of the problems you hit:
What you think is an MQL, is not was Sales think is an MQL
Worse – different sales folk in different offices have different views on what should or should count
Different salespeople are happy with, and capable of taking on leads at different “stages” – from very early “Can I have a chat with someone?” enquiries to late stage “Can I get a quote please?” orders
Even if you agree on criteria, what cadence should a salesperson follow with different types of leads? Three calls? A call, an email, then a call? When should they give up? How do you know if the process is being followed?
How much extra work should sales people do to add context and info for a lead? Marketo/Marketing provides some data (industry, job title, company info, web usage etc), but not as much as everyone would like
If you agree on lead qualification, how do you get the right leads to the right people in a timely manner?
How do you learn and adjust qualification over time? If you find leads of type X are gold and leads of type Y never seem to go anywhere, how do you change the qualification process quickly? How do you get that feedback back in to marketing from an enormous and global Sales team?
Most of this is operational – needing marketing operations and sales operations teams to work together alongside the rest of their colleagues. And there’s a lot to figure out here. But these are the things we did in January to try and tackle some of these problems. Not everything went smoothly, but enough went well to achieve noticeable differences in the numbers. And everything here was a joint project between various people in Marketing and Sales at different levels.
Reporting. We started by putting together some basic reports of MQLs and Opportunity numbers. We focused on “Consistent, simple but imprecise” over “Complicated but accurate”. And we spent time running these through with Marketing and Sales leadership, to see if we had a common agreement that we were looking at the right things.
Definitions. Next, we realised there were a lot of different definitions out there – what was an “Inbound lead”? What was a “Good download”? What should we do with “renewal referrals”? So we spent a lot of time talking these through – in 95% of cases, we were all aligned to start with, so we spent time on the 5%. As an example – what should we do if a customer has asked a renewal rep to add a license on to an order? Is that a sales person upsell, or just a customer enquiry that came through a circuitous route? (We decided on the latter btw)
Lead Types. We spent a lot of time simplifying the types of leads we’re interested in. From analysis of 2020 data we realised that the vast majority of leads came from a small set of sources – inbound emails/phone calls, web orders, downloads & free trials, events/webinars, reaching out to current customers, and prospecting out to new customers. There were then about 10 additional sources, most of which generated less than 1% of leads each – we simplified the model to the few that really matter.
Lead Flow. Armed with an understanding of different lead types, who should get what? And how quickly? We spent a lot of time with operational teams working out the processes then implementing manual processes (we’ll automate later…) to make sure all the leads found the right home (I like to think of this as “No lead left unturned”)
Follow up. Is every lead being followed up? With the right cadence? Again, some great work from our SalesOps team, and Sales Leadership making sure this was happening.
The Feedback Loop. We now track which leads are converting and which are too early stage or low value. We’ve already made one round of changes to the qualification process, and expect many many more as we learn over the coming months.
What Impact Did it Have?
This is what matters. If you did all of the above, you can give yourself a pat on the back, but it only matters if it made a difference to the numbers. So did it?
Yes it did. I can’t post all of the charts here, but in summary:
January opportunity generation (before we’d actually made any changes) was more or less the same year-on-year. A bit disappointing, but we are in the middle of a pandemic.
So far, February opportunity generation has been between 20% and 30% up year-on-year, after we made the changes described above.
Could this just be luck/the market? It could be, but poring through the data for “What actually happened here?” it clearly shows that the new opportunities are coming from the right leads being placed in the hands of the right sales people with the right information at the right time. Sales people feel like they’re getting decent leads from Marketing. Marketing people feel that all their leads are being “maximised”. And most importantly customers are getting the service they expect – help from Redgate when needed, and left alone when that’s what they want.
I’ve been watching the figures every day like a hawk, to wait for things to go wrong, but the increase is very consistent.
Looking back over January, this effort would have failed if it hadn’t been for us taking a collaborative approach. As mentioned at the start, these things aren’t rocket science. So why didn’t we do it all years ago? Well, a number of reasons (having the right people in place for example), but primarily, that taking the more forensic, tougher and collaborative approach was necessary to proceed. We could have tried doing these things in isolation, but it would never have landed as well as it did.
Anyone who has used the London tube system much, will know that there are two routes from Green Park to King’s Cross – the Victoria Line and the Piccadilly Line. The Victoria Line is the “Right” way to get from Green Park to KX – it’s quicker with fewer stops, why wouldn’t you take this route?
An important principle at Redgate is that we’re outcome-focused. Everyone says this of course (who would ever say “I don’t care about the impact of work, not my problem!”), but it’s important to understand the implications of this approach. Specifically that “It doesn’t matter how you get to your destination, as long as you get there”. It doesn’t matter if you take the “Right” way, the “Wrong” way, or any which-way (as long as it’s ethical of course!) – your job is to achieve your goal.
Seven years ago now, I was out near Green Park, London with a friend (back when that was a possibility..), and both of us had to get the train back north from King’s Cross, leaving in 25 minutes time. We got on to the platform at Green Park Station and of course headed towards the Victoria Line. But as soon as we got there, I noticed all of the trains had been cancelled – so rare for the Victoria Line! At this point I started whining about the trains, how we’d never make it in time, how we were doomed. But my friend turned to me and said “Follow me”.
We ran as fast as we could to the Piccadilly Line platform. Luckily the train was due in under 2 minutes, so we jumped on and waited for the seemingly endless stops to King’s Cross. As soon as we got there, we sprinted through the station, along the platform and leapt onto the train with about 45 seconds to go. We made our train, and got home at exactly the time planned, even if we were a little breathless for the start of the journey.
We achieved our objective the wrong way. It was far more effort and we made the worst (but necessary) choice. But it doesn’t matter – we made it!
It’s crucial when you’re trying to achieve a goal that you don’t get anchored to a particular solution or approach. For example, if your goal is to “Increase leads in the EMEA region”, you’ll likely start with a marketing plan of how you’ll achieve that. An array of strategies, with particular spends, campaigns, reports and, crucially, dependencies on all sorts of other things happening – both internal and external – which will be out of your control. But any one of those things can go wrong, and your job is to maintain the relentless march to the outcome. Reports not available to you? Make them yourself. Email nurturing track can’t be implemented? find another piece of technology that can do it for you. Budget constraints? Find innovative ways of making the same impact with great content instead. Internal resource not available? Find a contractor, find a temp, phone a friend!
It’s very likely that when you reach your destination, you’ll be exhausted with the pivots, the workarounds, the manual processes, the hacks. But at least you will have got there. For me, that’s what “Outcome focused” truly means – ingenuity and agility on how to get there using whatever means you have at your disposal, even if at times you know you’re doing things the wrong way.
Lots of people have written about the “New world of remote working” (so much so, that that phrase has become a cliche in the space of six months). But I think it’s still an interesting topic, because I have a hunch the changes we’ve seen in 2020 will become permanent, even as we start to move out of lockdown.
I agree with the comments many have made, that “The genie won’t go back in the bottle” (another cliche…). I struggle to see a scenario where we’ll all go back to the old way of working – 5 days a week in a single, centralised office. Why? Because it’s working better now from both sides.
First, compare the old and the new as an employee. Work pre-March was long commutes either pumping CO2 in to the air in your car, or squashing in to a train carriage, losing hours of your day in both cases, to sit in an office and stare at your screen, out for a £6 Pret sandwich at lunchtime, then home, exhausted. If you manage to fit the £80-a-month gym trip in there, great, but you’re home even later.
Now? Count the ways in which work has improved for the employee:
Firstly, the instant time saving on the commute. No commute takes less than 30 minutes, and often much more, if you add in a tube ride, or traffic problems. So many people are immediately getting 1-3 hours of their lives back.
Cost of the commute. Either petrol savings, or season ticket. This can easily add up to hundreds of pounds a month.
Lunch – eating at home is generally cheaper than buying from sandwich shops. I know that’s tough on the city-based sandwich shops, but more on that later.
Health – eating at home can easily be more healthy than eating out-and-about. You can spend 10 mins prepping something in a kitchen, making it much easier to do something good for you.
Exercise – going for a run is much easier (with that saved time), or a lunchtime cycle ride if preferred. Pilates classes on Zoom are also easier if you’re not having to find somewhere to change afterwards.
Flexibility. A big one I believe – being able to organise your work-life balance is much easier when WFH. A simple example, if your kid needs dropping off at the school gate at 8:40am, you can do that and be back at your desk for 9am. That simply doesn’t work if you have a 1 hour commute to London. So you need to have nannies or lean on friends/family. Additionally, there are benefits like “Being in for the builder/delivery”, getting the washing done, finishing an hour early to go and see family/friends and so on. A lot of this stems back to point 1 – the time saved no longer spent on the long commute.
Secondly, what about the employer? Unlike the list above, I think there really is only one of note – but it’s a big one, and one that matters to every employer: the cost of running an enormous office, often in an expensive central location. Recently, the city law firm, Slater and Gordon have given up their London office – why keep it? After salaries, office costs are often one of the biggest bills for an org, and it just doesn’t seem necessary any more.
There is an additional important point here as well – not so much a benefit for employees, but a worry that didn’t turn out to be true. A lot of companies worried about productivity drops in a remote world. But that simply hasn’t been the case – if anything productivity of employees has actually improved, as people adapt to the new ways of working and gain the benefits listed above.
Seismic shifts like this one tend to only happen when it’s good for “both sides”. Of course there are people who will lose out from this shift – property developers in the cities, sandwich shops in central locations and so on. And of course, I’ve completely ignored some of the problems caused by remote working – isolation for employees, loss of cohesive for company culture, and many more.
But my point is that I struggle to see a way back. The new world will be one of mixed models – some WFH, perhaps visits to new, smaller offices for 1-2 days a week, perhaps for team events only. Most office work is spent starting at a screen (for better or worse), and that can now be done more cheaply, and with a better use of everyone’s time, with more people doing this from home.
What impact will this have?
Firstly, I think the benefits above will become embedded in company working models. Meaning – companies will lower their annual rent costs and related costs (office maintenance etc). And employees will just get used to be able to manage their work around their lives and vice-versa. This will become expected of any role – any job that asks you to be in a central London location for 8:30am will become far less attractive, as employees raise their expectations of working life – suddenly this will become a big negative on a job ad, rather than just an accepted necessity.
But I think there are two more big additional changes that will happen, one about the towns and cities we all live in, the second about how we look for jobs going forward.
One of the problems with everyone WFH-ing, is that the whole infrastructure around centralised office work is struggling. If you were running a sandwich shop, book shop, stationary shop, gift shop or similar next to a city law firm in January, it’s hard to see how your business will return. And that really is a shame, particular when your business is failing through no fault of your own.
But that misses the point that, the need for these services is just the same – it’s just the location has changed. if there’s a movement of, say, 50% of office workers to be at home, then naturally the environment around peoples’ homes will flourish instead. So we’ll start to see new bakeries, new local shops, new cafes sprouting up in heavily residential areas, particularly as lockdown ends and people want to head out for lunch a bit more. This could be a real resurgence for some areas that have struggled to date.
More than this though, I think we will see different impacts for different areas. I know the South East of England best, and I’d suggest there are two types of town outside London, whose fortunes will change. Firstly, there are cities/towns like Cambridge (where I live now) and Bury St Edmunds (where I was brought up). Both are great places to live, each with their own character. But they’ve always struggled from being just a-little-too-far from London to commute regularly. It’s possible, but a little exhausting. That’s always kept the population down for these towns, because it’s really not commuter-territory if you want to work in London. But that’s not a problem anymore! You can get a job “in London” and now work 3-5 days a week from your flat in Cambridge. This should significantly increase the numbers in these areas, leading to growth of local infrastructure.
Secondly, there are places which have always been commuter towns – 30 minutes to London by train, but without a whole lot going on there (few local restaurants, cafes etc). These towns could go two ways – either they’ll start to get that infrastructure too, forced by all the local residents (no longer commuting to London), who want nice places to eat and drink. Alternatively (and hopefully not), they’ll struggle as people move away over time – if the only reason you lived there was the commute, and that’s no longer relevant well, why stay?
The other side to this coin though, and I’d suggest an even bigger change, is how the world of work opens up for you as an employee (and also, as an employer of course). Most job searches start with location – “I’m looking for a Java developer role within 45 minutes of Reading”. But if you remove that constraint, the world is suddenly your oyster! Well, the country anyway. If you only have to visit the office 1 day a week (or even less), you don’t mind a 2 hour commute both ways. Suddenly you can get a role based half-way across the country. As an employee, you can start looking for the things you really care about – the actual role, company culture, the domain and so on, rather than being artificially constrained by geography.
This democratisation of work, will positively impact the good employers too. Some employers will be worried (“What if all my employees leave, now they can all look further afield?!”). But that misses the point – as an employer you can now look further afield for talent. And this will have a positive effect for great employers who genuinely care about their employees, their culture and the work they do. The knock-on effect here will be that, good employers who don’t allow remote working will find themselves struggling against those that do.
Again, I want to re-iterate, I’m knowingly ignoring many of the problems that remote-working will bring. I’m not denying those are there. And I think a 100% remote-working world (without any physical interaction with colleagues, either for work, team, or social events) is not something I would find attractive.
But I feel the benefits of the new hybrid world outweigh the downsides for employers and employees both. And because it’s beneficial for both parties, I think the current changes will stick even once the vaccine is available. Why go back to something less productive, more polluting, more expensive and less flexible, now that we’ve all seen something better!?
For better or worse I find a lot of my tips and tricks for working in a software company from fiction books and films. I learnt most of what I know about how to present to senior folk (an Exec team or a Board even) from a two-minute scene in David Mamet’s film “The Spanish Prisoner”:
In this scene, the main character (played by Campbell Scott) has to present to the board on his new idea (“The Process”) – how do you present something extraordinarily complex and nuanced to a group like this?
There’s a great line early in the scene when Ricky Jay’s character starts to talk about the team and the effort behind the work and the CEO responds with “I know you’ll understand when I say that’s neither here not there”. Harsh, but what the board really want to hear about is:
How much money will we make?
What are the risks? What do we actually own?
What are the timelines?
The presenters then go on to speak to these points and get what they want from the group.
Of course this is fiction – rarely would a senior team make investments based on so little information (and I’ve never known a senior team care so little for the people behind a project!), but it makes the important point – know your audience, don’t waste their time and concern yourself with what they want, not what you want. At a very practical level, next time you’re presenting to a senior group, consider chopping half of your presentation out (regardless of how short it is already) – the skill of summarising key strategic points, and speaking to the point is valued enormously in any company.
Of course I’ve always found marketers good at this sort of thing. Good presentation skills are often expected of marketing people, but there’s more to a great presentation than good elocution. What’s needed for a pitch to a senior team? Knowing your audience, not wasting their time, and concerning yourself with their needs, not yours – a concise description of “Marketing humility”, the skill of putting the customer at the centre of everything you do, and leaving your own concerns to one side. It’s at the centre of how great marketers think.
Watching this scene again also reminded me of a great talk I heard from Erica Seidel a few years back at a MarTech conference. There she talked about the three skill areas she looked for when hiring senior roles:
Attitude – what general approach/attitude does the candidate bring to a role? Positive? Pro-active? Team player? Team builder?
Aptitude – can they do the actual thing they’re being recruited for!? A VP of Sales needs to know Sales obviously.
Altitude – can the candidate talk to colleagues at all levels? Can they summarise a strategy in 2 minutes to the CEO, then spend all afternoon in a workshop going through the details with the implementation team?
Erica’s point in the talk was that, of course, everyone focuses on the 2nd of these. And most people ask about the 1st. But few ask about the last, and it’s a great skill to have as a candidate. The ability to turn on a sixpence and completely change the way you present a proposal from “This is how much money we’ll make, and why the risk is low” to “Here’s the 25 pages detailing how this is all pieced together, and how we’ll run the project” is a scarce talent and invaluable to employers.
The film is one of my all time favourites, and of course anything by David Mamet is great. Films and books often provide great lessons like this because a great writer will be able to summarise the essence of a situation in a few moments, more succinctly than a 256-page book. I strongly recommend watching the whole film through – there’s so much more in there about other aspects of company life too, all of which I’ve found useful over the years :).
It’s hard getting ahead in Marketing. It’s a discipline changing every year (certainly true of 2020), it covers an enormous breadth of disciplines which need a great variety of skills and it’s notoriously difficult to prove the impact of your work. So what can you do to give yourself the best chance of success? Of growth and moving to the next level?
I’ve always believed that a significant part of your career success is dependent on the organisations you work for. You can be the smartest marketer around, but if you’re working at a deadbeat company in decline, you’ll struggle to grow and show success. Equally, for better-or-worse, if you’re only an average marketer working at a place growing 100% year-on-year, you may get away with perhaps more than you should!
So obviously we all try to work for exciting growing companies. But the other big factor is the size of the company you work for. I’ve worked at companies of 50,000 employees and of 2 employees (one of which was me!) and it makes an enormous difference, not only to the sort of work you do, but also your chances of learning and growing. A growth mindset is crucial for your future success. I’ve personally found that Scaleups – organisations that sit between early stage startups and the big corporates, focused on scaling up to the next level – have provided the best opportunities for growth.
My first job out of college was at British Airways, as a developer. I had no idea what to expect, but it started well. The first month was a formal training program (on their systems), and it felt very structured, almost a continuation of college. I was getting training and everyone seemed to know what they were doing.
So a great start. But 6-12 months later, something didn’t feel quite right. I soon realised that every problem (at my level), every process, every significant decision had already been figured out by someone, likely years before. A simple example – the precise naming, file location, structure, font and format of every doc I had to write had all been worked out approximately 10 years before. I suggested “Perhaps for a small change, we can just write a short note (a ‘Minimal viable document’!), something really useful to the reader, rather than writing 25 pages, taking more time than the actual code change”. That didn’t go anywhere. I soon found that my ability to grow on-the-job was very limited – it’s a cliche, but you quickly become a cog in the machine.
So many years later I tried a startup. A very small startup in fact, just two of us. There was not a formal training program when I joined here! And it was really exciting – I did really enjoy this time. Certainly, a little hairy at times – there wasn’t the backup of a large corporate with deep pockets. But the rollercoaster ride was part of the fun. And I definitely felt like I had an enormous influence over the strategy for the company – this is one of the key attractions for smaller orgs.
But this comes at a price – I was there for over 3 years in a Product Manager role. But my growth in the disciplines of product management and marketing was pretty close to zero. I learnt a lot about the hustle of working at a startup. I learnt a lot about closing deals, about getting 25 things done all at once. But my understanding of the emerging disciplines of product management, product marketing, brand, digital marketing, marketing operations etc etc didn’t advance in three years.
So where’s the Goldilocks zone? Where can you get this sort of support for growth without just becoming part of the machine?
I now work at a company of 400 people, in a strong growth phase with a laser-focus on learning and development of its employees. A Scaleup like this – somewhere moving from the stage of “Everyone doing everything, just get the release out!” in to a more disciplined stage of “Okay, how do we scale all this? We have success already, how do we make this 10x bigger?” is the sort of environment where you can really become a master of your discipline.
When I worked at the startup, I did all of the product management, a lot of marketing, some development work, and a lot more besides. I did what needed to be done to survive, as we did everything we could to find some sort of product-market fit. I didn’t have the time to work out “What would be a better way of running that digital marketing program? How would I do that better next time?” – the rollercoaster was moving too fast for this sort of introspection.
At Redgate, we have a marketing department around 45 people strong. We have product marketing, digital marketing, brand, ABM and customer marketing functions (all with disciplines within each of these) as well as a nascent marketing operations function. We pride ourselves on being world-class in all of these areas. Of course we’re not there yet – part of a growth mindset is accepting that you’ll always be striving to do better – but I feel we improve at everything we do year after year. However great, say, our digital marketing team was a year ago, they’re better this year (through growth and learning activities), and will be even better this time next year.
We even run an internal conference devoted to the goal of growing our capability. Called “Level Up”, this year will be a week long event covering an enormous range of topics across the whole business. Previous years have been a single-day offsite, but with everyone working remotely this year, we’re trying something new. I’m really excited about this as, yet again it reinforces the crucial role that learning and development plays when a company is scaling up. It’s just not good enough to still be working in the same way this year as we did a year ago – as the business grows, we need to grow as well.
There’s a lot written about the advantages of product-led growth (PLG), how it keeps marketing and sales costs down, how customers prefer it and so on. All good, but I struggled to find much on the actual strategies to use – how do you do it?
There are obvious things like having a product with amazing product-market fit. But that doesn’t really help with strategy – it’s not particularly insightful, and it is, of course, the task that vast parts of your org will be working towards – what do the customers want? What is the market? How do we iterate towards their needs? And so on and so on. Let’s assume you’re doing all you can in that direction.
How can you help as a marketing department? Well, there are lots of tactics: focus on inbound work, build a community, make sure the CTAs are in the product (to help people from product-usage to getting in touch), design trials properly to that people understand the value. Fundamentally, you’re trying to use the product and usage of that product as the channel.
But I wanted to focus on one specific strategy that has been pivotal at Redgate, about the messaging and tone you use with customers – and it’s something that is (sadly) pretty rare in the world of marketing. By definition, most PLG is targeting users of your product, and there are specific ways in which you need to change the way you interact and message to this sort of customer.
It’s an enormous over-simplification, but the process for PLG, runs something like:
Through some mechanism, a new user finds your product,
User tries product, loves it, buys it,
User tells colleagues, friends, everyone about how great your product is. Go back to step 1!
The question is, how do you amplify this cycle? Can you catalyze this, or do you just need to let it run its course?
The “trick” we’ve found most effective for messaging is “Under-promise, over-deliver”. And you can see how that runs counter to the standard marketing mindset.
To see why this approach can be so effective, firstly ask yourself – as a user/consumer yourself, how many times have you bought or tried something – either in a work or personal context – and been disappointed? For me, this is (sadly!), the standard process for making purchases: you’re sold something based on a promise, and over a period of time you realise that it’s not quite what you hoped for. Whether it’s a piece of MarTech, a meal out, a new laptop, an agency’s services, whatever – our general experience is one of disappointment.
But here’s the “trick” – where this hasn’t been the case, where a product is genuinely at least as good as the promise, if not better, then these are the times, and the only times when I’ve recommended that product to someone else. Going back to point (3) above – the process of recommendation or word-of-mouth is the fundamental driver of the product-led growth model (from a marketing perspective).
Take a specific example. You’ve been asked to market a new piece of MarTech, say a chatbot system. You’ve got a good product, it’s better than most of the competitors, and you’ve been tasked with implementing a PLG strategy – you want to build the business from the bottom-up. You’ve now got two choices:
Extoll the virtues of this thing – tell customers that every user will love it, it does everything the competitors do and more and that it will “Transform your business overnight, doubling your customer base, as they all start buying from you, because of your wonderful chatbot facility”. Or,
Something with a little humility. Be clear about the scope of impact a chatbot can have – “Help your customers interact with you in a way they prefer”, “Lower your support costs by 15%”, and so on.
Option 1 is fine if you just want the initial sale, and don’t care too much about the ongoing word-of-mouth process. Do you care if that customer decides to recommend it to friends and colleagues? Perhaps not.
But if you do care about these things, option 2 is the better strategy. Why? Because, taking the product functionality as a given, the individual is far more likely to go through a process of:
Let’s try this product,
Wow, this is better than I thought! I was really ready for disappointment, but this is way better than expected!
I’m going to buy it. But more than that, I’m going to tell others – it’s so rare to find a product that’s better than expected, it’s worth mentioning it!
..and so the virtuous cycle begins. Of course another key point is that end-users do tend to be more skeptical of OTT marketing messages. So it’s a welcome relief to those individuals when they finally get a vendor that is straightforward with them, even to the point of humility.
There are many examples of this out there – companies where the product is genuinely better than the marketing message would imply:
Redgate – I would say this, but it’s been our strategy for 20 years. And it works – Word-of-Mouth is still our strongest source of leads.
Apple – my experience of Apple products, is that they repeatedly surprise you (in a good way!), with features and usability that you didn’t expect.
Assassins Creed video games – one for the gamers, but these titles are always, for me, better than I expected. They don’t tell you everything you’ll be getting, you find this out yourself through game-play.
SouthWest Airlines – the website makes it feel very standard, but anyone who’s ever flown with them will know that the experience is a long way from this. Always a pleasure to fly SouthWest (I can’t help recommending them!). I just hope they get through the current crisis intact.
Brancott Estate lower alcohol wine – the label makes it look really average and “Supermarket-ey”. But it’s an amazing wine with only 9% alcohol. I must have recommended it to 10 people already.
So why doesn’t everyone market this way? Because there is a tension between immediate sales and long term growth – and taking this approach, of under-selling yourself – requires some faith. And you’ll be asked by your colleagues, “Really, that’s the best you can say about this?! Aren’t you a marketer!?”. So you have to hold your nerve a little, and take some risk. Of course one way of de-risking is to try and measure WOM recommendations over time – are you getting leads in, seemingly from nowhere? If you ask customers “Why are you looking at our products?” and you get something like “A colleague told me about it”, then it’s a good sign that you are on the right track.
Because of course when it does work, it’s one of the lowest cost and most effective marketing strategies there is. It just takes patience and sometimes nerves of steel.
Everyone’s got marketing advice about what to do in the current crisis, haven’t they? As though it’s easy and obvious what you should be doing in this “first-in-a-lifetime” situation we find ourselves in?!
I don’t think it’s easy and obvious at all. But if you work in marketing, now is the time to earn your keep – do you really care about your customers and want what’s right for them? There are some hard choices to make, about how you react in the current situation – and those choices could have significant impact on how your customers view you after this is all over.
NB: Context is everything – really this post is targeted at orgs that are still doing good business. For some, the current situation has seen their revenues disappear overnight, and those companies are in operational survival mode, particularly if they don’t have the necessary cash reserves to weather the storm. So this post isn’t for you – good luck of course if that is you, and hope you find innovative ways to keep going.
But if you still have reasonably strong revenue streams coming in – this is the first of two blog posts about strategies for dealing with the crisis. This one is about the guidelines I’d recommend for your external comms – how you’re talking to your customers. The second will be about internal comms, helping your employees and company through the current crisis.
Of course there’s been a great deal written about how marketing departments should change their outbound comms during this period – what’s in your emails? What are your sales reps saying? What are your offers?
It’s interesting watching how companies are responding – from watching these for the last few weeks, I feel there are three different types of company, and that each should, ideally, respond in a different way – I try to give examples below of these three types, some with good responses, some with not so good. The three categories are:
Orgs that can directly support the fight against the virus
Companies that have a product relevant to the crisis
Companies that don’t have a relevant product
Organisations that can directly support the effort to fight the virus
This doesn’t just mean companies that make ventilators, looking for a vaccine, or similar – it also includes organisations that are supporting the community directly: supermarkets and takeaway firms; delivery companies; hotels/travel companies that can provide free housing and logistical support, and so on.
There are so many great examples here of companies who are stepping up and doing the right thing. For some of these organisations, the pandemic has increased business (supermarkets for example), and for some it’s seriously impacted revenue (restaurants and pubs). Really the task here is to focus on the good you can do and put your business behind it. Just a few examples I’ve seen:
Deliveroo
I love what Deliveroo have done here. Essentially, they’ve hacked their app to allow you to easily donate to an effort to deliver free meals to NHS workers. They have the capability (through their food delivery network) to genuinely help out with a specific problem – NHS workers being so overrun they can’t get meals easily – and they’ve made that easy for their enormous customer base to contribute. A great quick turnaround, directly helping those on the frontline.
Chocolat Chocolat
On a smaller scale, Chocolat Chocolat (an amazing Chocolate shop in Cambridge) have raised money to donate what they can – chocolate – to workers at Addenbrookes (NHS hospital in Cambridge). Sure, it’s not sustenance, but it’s something that will bring some Easter joy to people who are working flat out to save lives.
Hotel Football
Gary Neville and Ryan Giggs are giving up hotel rooms in their hotels free of charge to NHS workers during the crisis. Again, a situation where they didn’t have to do this – yes, the rooms are empty otherwise, but the hotel will still need upkeep and servicing, and it’s an innovative way to do the right thing, using what capability you have.
These are just a few of the many many examples of great deeds done by organisations and individuals to directly or indirectly support the fight against Coronavirus, and all should be lauded for this work.
Organisations with a relevant product or service
And “relevant” is the key word here – it’s the distinction between this category and the next. Do you offer a product or service which you can genuinely say is beneficial to the general public at this time? Zoom is an obvious one – with so many people remote working, there’s a real need for video conferencing software to help colleagues work together effectively. There are lots of providers of course, but there’s no reason at all why Zoom can’t reach out and market its product in this time – they are genuinely helping people out. It’s the most obvious example, but there are a couple more I spotted that were also doing a great job.
Ikea
Ikea ran a great campaign during the pandemic – they also have content about setting up a home-schooling environment, and plenty of great practical ideas for making “WFH work for you”. The point is that this is a genuine problem people are facing – “I’m now sat at home in my tiny flat, with two others, trying to work effectively for perhaps three months or more, I’ve got no space, no proper desk, no decent chair – I need help!” I also really like the tone they use in emails and the content they’re producing – “Make WFH work for you”, “Reach home-school serenity”, “Win at staying in this weekend”, “How to create a hobby-hub for the whole family”. Such a strong example of how to help out when your customers need you.
Decathlon
In a similar vein to Ikea, Decathlon are running a great content campaign about helping people out with a second big concern – staying fit and healthy whilst locked down at home. Again, the key point here is that they sell products which are genuinely relevant to customers’ needs right now. It’s not a fudge or a sleight of hand – people are really struggling with fitness when most of their usual avenues for exercise have been closed off, and Decathlon are finding innovative ways to help.
But, what do you do if you don’t have a relevant offering? The vast majority of us, particularly if you work in B2B, don’t have something that can directly impact the crisis right now – at least not if you are completely honest with yourself. What do you do in this situation?
Organisations without a directly relevant offering
Of course this is where most mistakes have been made. We’re all being inundated with messages from companies trying to use the current crisis to generate leads. Just in the last week I’ve had messages from sales reps suggesting “In this time of crisis, should you be thinking about your marketing agency?” and “Hope your family is well. Have you thought about benchmarking your paid search?”. It’s not that there’s no link between the crisis and these offers – it’s just that it’s tenuous at best.
But, what should you do, if not crude lead gen? The strategy being taken by most decent orgs right now, is to give away your content for free. There are so many examples, but the two I wanted to highlight are Pluralsight and my own employer, Redgate.
Pluralsight
It’s a simple strategy really. I can’t directly or indirectly help the effort against Coronavirus, and, chances are, my business is suffering a little. So what can I do? You do what you can do, and that’s to help out in any way you can – help customers take this opportunity to help themselves, fill some time, try and use this home-time productively. That’s what Pluralsight are doing by offering all of their incredibly valuable content for free for a month. And hopefully, in six months time, when people look back over this period and think “Who were the companies that acted with integrity, that I’ll go back to for my training needs?” – then Pluralsight will be at the top of that list of brands.
Redgate
In a similar vein to Pluralsight, we’re taking this opportunity to support the community in the best way we can. There areother things we’re doing to directly support the COVID-19 fight, but for our customers we’re starting a new section of our site where we’ll be providing previously paid-for training content, and creating brand new training material, all just to help customers out during this period. Again, when this is all over, we want our customers to look back at Redgate and think “Yes, they did the right thing – they did what they could to help me out, even if only a small way”. We’ve also trained our sales teams to offer this material where relevant as well as a number of other activities, all with the same aim: look after customers, many of whom are going through a very tough period right now.
So the real question is – which category do you fall in to? And be honest with yourself – if you’re not one of the very few who can directly help, then you have a simple choice: is my product or service, genuinely something which could help people right now (video conferencing, new desks/chairs, gym equipment), or is this just spin? It’s the time to do the right thing by your customers and make decisions that will impact how customers perceive and judge your brand in the next 6-18 months. Will you be on their blacklists, or will you be that company that, next time customers are thinking about who they want to work with, you’re at the top of that list?
Another thought exercise. I was trying to think of scenarios where Customer Success – i.e. genuinely worrying about whether your customers were using and getting value from your offering – wasn’t going to be a priority for a business in 2019. I could only think of two. But I think even these are slightly fatuous, I’d be surprised if I can find anyone to whom these apply.
Why such a strong statement? Because the nature of generating revenue has shifted away from “sell-and-forget” models towards business models that rely on customer satisfaction. And this isn’t just about the move of businesses towards services and subscriptions. The rise of review sites such as TripAdvisor, Which? or Trustpilot has meant that companies who could get away with shoddy services or offerings in the past, no longer can.
Still, I managed to think of two examples – do these apply to you!?
You’re a brand new startup, so your growth and targets are based on acquiring new customers only – you don’t have any existing customers on which you need to rely for revenue.
You’ve been around a while, but you’re selling some sort of perpetual or “one-off” product. Does it matter if the customers don’t come back or don’t like what they bought?
And I can see the logic in each of these. For the first – you need to prioritise. What’s the point worrying about customers “getting value from your offerings”, if you can’t land any customers anyway! Surely you can worry about that problem later?
For the second – if you’re a restaurant in a tourist town, you know customers are only going to come to you once. They’re not coming back anytime soon, so why worry if the pizza was burnt, or the risotto under-cooked?
The flaws in these arguments are pretty clear, but let me work through them anyway..
New startups, particularly in tech, are now rarely, if ever, offering products on perpetual or “one-off” licenses. Why does this matter, when you’re just trying to acquire new revenue? If you sell your product as a one-off for £25,000 and the customer doesn’t use it then, hey-ho, that’s a shame. But you’ve pocketed your £25,000 so you and your investors are happy. But, what if you’re selling a subscription service at £1,000 per month, and the customer isn’t happy after 3 months (and therefore cancels)? Well you’ve only made £3,000 from that customer (who likely cost you a lot lot more to acquire). And worse, is unlikely to come back. So, in a world where services and subscriptions are dominant, you have no choice but to care about customers’ success.
What about the situation where you are selling “one-off” products, perhaps as a more mature business? The main flaws in this strategy are that firstly, is it true that customers never come back? I’d suggest that’s actually pretty rare. The majority of revenue for established orgs comes from existing customers, from up-sells and cross-sells. Sometimes they want more of the same, sometimes something new. But you can be pretty sure if they weren’t happy with the first product, they’re not going to ask about the second. Oh, and customers do return to tourist restaurants and cafes – I’ve been to The Creamery in Minehead probably every year for the last 7-8 years on holiday. A classic “repeat customer” – and it’s great every time!
Secondly, people do talk to each other about products! Either via review sites, word-of-mouth, at events and conferences, online forums, everywhere. You no longer can get away with a shoddy product, and hope “Nobody hears about it”. The advent of review sites, forums and so on, has made this all much much easier. 20 years ago, if a software vendor provided a poor product, then of course the people (suffering) in that customer organisation knew about it. But how would others find out? Perhaps there would be some word-of-mouth (WOM) through conferences or personal relationships – but not much. Now the word spreads like wildfire. I’ve hunted, and it’s actually pretty difficult to find an example of a low-quality product, where its poor reputation has spread across the Internet. Why – because the speed of the bad-PR mechanism would have killed that product years ago! You do see WOM spread quickly for great products (Slack, Trello, etc) – the sort of effect you want to see, based on a series of customers having a wonderful experience with your product.
I believe that, in the past, yes, it was possible for an org to get away without having Customer Success at the top of the their agenda – in the days where “Nobody would find out”, or where subscription-based services were still rare.
But times have changed. You need to be able to answer simple questions such as “How many customers got started with our product?”, “How many kept going?”, “How many get value out of it?”, “How much value – all that was possible, or just the ‘basic’ features?”, “How does this impact MRR?” and so on. These are key indicators for future growth, given that large amounts of that growth will be dependent on the success of your customers buying more, or buying other things from you; but also remember – people tell their friends…
Here’s a very non-theoretical problem – you’ve got two ways of spending some digital marketing budget, either a) LinkedIn advertising, or b) Facebook advertising. The former works pretty well, you manage to calculate a return of $1.50 for every dollar you spend. The Facebook adverts are more effective though – a return of $1.80 for every dollar spent. Question is – which do you do? Obvious isn’t it, it’s Facebook?
No, the answer is both. I’d argue that, for most orgs, particularly those in a mid-stage, scaleup phase, the more you can spend on things that work, the better. Why? Because the only reason you’d choose one over the other is from a desire to improve Efficiency – to get more bang for your buck. But for many orgs that isn’t your job, your objective is to improve Effectiveness – to improve your outcomes, to grow, to maximise your revenues and profits as soon as possible. It doesn’t matter if some activities are less efficient – do them all!
Les Binet and Peter Field explain the difference very clearly here, around 5:58:
I think there’s an additional subtlety here for growing businesses – that the relative importance of these two approaches varies depending on the stage of growth for your company, and the objectives handed down by your boss or board. For some very early start-ups, you’re not worried about metrics like “Marketing ROI”, “Marketing generated pipeline” and so on – you’re just trying to find product-market fit, and finding any way of reaching your audience. Marketing effort is far more likely to be focused on early strategy – what is the market we’re after? Who are these people? What would they use instead of our product? Who are we competing with? How would we reach these people anyway? You’re not yet at a point where you know how to spend marketing dollars!
For many large orgs, particularly those with investors, efficiency does become much more important – growth is relatively flat and the strategies might focus more on reducing the customer acquisition costs. I’ve spoken to a couple of people at this sort of company in recent years – not a role I envy perhaps, but at least it’s clear what you’re being asked to do. Your job is to optimise, find efficiencies, cut costs, track the Marketing ROI ruthlessly, and cut waste.
The middle stage is interesting though. You’ve got product-market fit, you know your market, why customers buy from you and you’ve figured out a few channels and activities that seem to work. But now everyone just wants more. More leads, more growth, more $$ – there’s never enough! This is a great time for marketing – as noted in Rise of the Revenue Marketer, there’s a clear link between the activities of the marketing department and company success – it’s exciting, but it can also be a little daunting. Here’s a poorly sketched illustration, of the phase I’m referring to:
The trick is to remember that efficiency is not your goal here. In the example at the top of this page, both tactics give profitable return – so you just need to do both. Accept that you’re picking both low-hanging fruit and high-hanging fruit. Some of your leads will be easily won – great customers, right in the middle of your Ideal Customer Profile. Sales pick them up, work the order in a matter of weeks, and hey presto – easy money. Others will be much harder to convince – the customer is a long way from a sure bet (maybe wrong industry, wrong org size, wrong technology stack). They’re very early stage – sort of interested, but they’re not sure what they want, or if they want it from you (tip – this is where great lead nurturing becomes invaluable). It’s going to take a lot of effort to win those deals – but you still need to do it. You’re not being measured on how efficiently you ran your campaigns (as mentioned in the video above, the most efficient way of running a campaign is to not run it at all!). You’re being measured on the maximisation of outcomes of leads, opportunities and revenue.
There’s an obvious chink in this armour – a well run business has to be profitable. Is it really okay just to spend wildly? I believe strongly in tight budgetary constraints – total freedom on spend leads to laziness, and a lack of focus. In the example at the top, we’re still trying to measure what’s working and what isn’t. We’re not doing things that are unprofitable. And if the return on something was $1.01 for every dollar spent, I’d be far less interested. It’s important to still work very hard measuring what does work. You should be constantly looking for more impactful ways of spending money, and also discarding tactics that aren’t working (easier said than done!).
But you need to be careful on cutting spend on the long-term brand building activities – the money you spend on non-activation activities that can’t be measured in the short term. These are the things that make you more effective in the long term. In a marketing department you have to weigh up your investments in short-term activation activities (“Click on this link to download our report!”), with those for long-term awareness of what you do – warming up customers for future activation. If you get this right, then you will be considerably more profitable – we all know it’s infinitely easy to get a customer interested when he/she is already aware of you, and has a positive inclination towards your offering or brand.
So a strong mix of long-term brand building (or “Investment in propensity to buy” – far more palatable to many 😉) and a wide range of activation activities, focused on how you can be most effective – winning both low and high-hanging fruits – is, for me, the strongest strategy when your goal is growth. And if you want to scale up as quickly as you can – stop worrying about efficiencies – that’s a problem for the future!
It’s that time of year again (for us anyway) – putting together the detailed marketing strategy and plan for 2021. And yet again it’s hard going. I’m not complaining – if it’s not difficult, then you’re not doing it right. Our job as marketing leaders is to work through the almost-overwhelming volume of data and insights – both internal and external – and somehow distill that in to something concise and executable. Crikey.
This year I was thinking why it’s so tough, particularly in marketing. My conclusion is that large parts of marketing strategy are about finding balance in your activities, making adjustments to budgets and activities to re-balance your efforts appropriately. This runs counter to an innate desire to “Make big decisions”, “Disrupt what we’re doing”, “Try something big, something new”. But most marketing is about balancing investments and activities across an enormous range of target persona, channels, offerings and activities. So why is this so complicated? I think the answer starts with the customer journeys that we’re trying to affect, and the extraordinary complexity of those journeys.
I love this slide from Challenger:
No need to (try!) and comprehend this – the point is that the way B2B buyers purchase from you is a long and winding road, full of shortcuts, blocks, backward loops and interactions between multiple people. To take a specific example from this diagram: yes, Web Searches are part of this journey. And if you thought that was something you wanted to fix in your planning next year because it’s not working so well – then that’s great. But it’s just one tiny part of the experience that one of the customers in a buyer group has for just one of your products. Neglecting the rest of the personas, the process and your range of offerings can lead to a scenario where you are “Robbing Peter to pay Paul”.
To make this more tangible, here are just some of the balances we’re trying to get right this year:
Brand vs. Activation. How are we splitting our budgets and investments between “Creating mental brand equity” (to quote Binet and Field) and aggressively generating leads today for sales teams? There’s a great post here, from Shane Murphy-Reuter about the need to balance activities to sow the seeds for the future, with the subsequent farming or harvesting activities needed to generate leads. And this is such a hard balance to get right – feeding the insatiable sales beast is core to our jobs. But we’re not doing our jobs properly if we’re not thinking about years 2, 3 and 4 as well.
Balance across the lifecycle. As illustrated above, the idea of some sort of linear funnel for how buyers behave is pretty fantastical. Nevertheless, there are activities we do to either a) Build brand awareness/commercial intent, b) build early engagement, c) create opportunities, d) get the customers over the line or e) look after customers post-purchase. Heavy investment in any of these is so tempting – “If we get share of voice/share of search up, then the rest will just follow?!“, “We need to focus on conversion of engaged users to actual opps for sales!“, “Unless we convert these opps in to $$, why does any of it matter?” etc etc. But again, you need a balance and you need to ensure you’re not lurching too far away from any particular activity, not least because all of these stages rely on the others around them for overall success.
Portfolio balance. If you only sell one product, you can ignore this. And lucky you! But most of us work for multi-product companies. And every product needs to double efforts to succeed! The problem of course is that marketing is a long-term gain. If you spent the whole of 2020 building up awareness of product X, ready for your sales team to capitalise on that demand in 2021, but you then move all of your efforts on to product Y, then you probably needn’t have bothered with the 2020 investment. You need to follow up on your work (“Okay, here’s the sales enablement material needed to convert that demand”) and that can make lurches dangerous, or at best, wasteful.
Balance across personas. As we all know, customers buy in packs. Or rather, Buyer Groups, to use the correct phrase. And those groups will be a mixture of economic influencers, senior technical folk and end-users. It takes a long time to build up awareness and trust with any group of people and again, shifting effort away from that group, just as they’re getting interested and ready to consider you – can lead to a waste of that historical effort, budget and spend.
So, I strongly feel that lurches, from one extreme to another can be dangerous, given the long-term nature of good marketing work. But obviously resources are finite – how do you manage and communicate this balance? How do you communicate the fact that, a shift in balance from A to B doesn’t mean that A no longer matters?
I’ve started using a 2×2 for this, which I’m finding helpful:
For each quadrant, place all of your activities, personas, lifecycle stages, products in one of the four quadrants (best to do each separately…) and use this as guidance for where to invest more or less:
(top-left) Opportunities – Invest. These are activities which you think are important to your business, but where you’re under-investing right now. For example, if you felt that “Virtual events” was important for your strategy, but you weren’t doing much of it right now, this would go here.
(top-right) Secret Sauce – Protect. The most important quadrant here for communication. What are the things which are crucial to your business, you’re already doing them well, and you mustn’t screw them up? For example, if you do incredible work right now supporting sales people with a specific product, and that’s making a lot of money, that would go here.
(bottom-left) Sirens – Ignore. Sirens, because they’re so tempting – these are generally the new things out there, you read about on marketing blog posts (“Use TikTok to reach a new audience!”) but which are of no relevance to your business selling, say, logistical tracking software. Your job is to ignore these things.
(bottom-right) The Past – Reduce. Just because something worked for you in the past – a tactic, a persona, a channel, a product – it doesn’t mean it will work forever. This is the tough quadrant to fill. What are you doing right now which, if you were honest, is no longer relevant? If you were bold, what do you think is (now) a waste of everyone’s time? Your job is to actively reduce investment here, and hold your nerve.
A 2×2 implies a process is easy – and believe me this process is anything but. But putting all of your activities in to this framework and using it to help your thinking, will help you decide “What can’t I touch?”, “Where does the balance need to shift?”, “Where can I take money from [to free it up for other things]?”. And it will also help you communicate to non-marketers the breadth of activity and work that adds up to the overall impact of your function.
The trick is to not over-steer. It might be tempting to make bold moves, to put “Everything on red”, but marketing is a long-term game, and you’re gambling with someone else’s money! Getting the shifts in resource right – putting the money on things that are already showing promise, removing budget where it’s no longer making any impact – is the tough, but interesting part of the job. Good luck!
Surely not!? Surely it’s the Marketing department (I am a marketer after all)? Or maybe Sales, maybe Engineering, maybe Customer Support. But no, I want to argue that getting HR right is one of the step changes you can make to a business, with far broader impact than any of the areas listed above.
There are a lot of well known beliefs, often cliches about the people in your business. A famous quote from Richard Branson is that “People are our greatest asset” (because if you look after them, they will look after your customers). But that isn’t what this piece is about. We all know that looking after employees is vital, and that your HR department is key to that. But I wanted to talk about something more – specifically, the implementation of good management practice and discipline, and how that underlies the success or otherwise of your company.
We’re very lucky at Redgate. We have, by far, the best HR department (or “People Team” as we know them) that I’ve ever worked with. But this isn’t because they’re just great people (they are) – it’s because of the principles and management practices that they encourage, enforce and monitor in the company. I’ve listed these below. But the reason it’s so important to have a great HR department, is to make sure the company understands and sticks to these principles, even if it causes difficulty in the short term – to make sure the reality matches the theory. A lot of these principles have come from that group, but they also work closely with us to make sure we stick to them.
NB: My experience of the last few years has been that every time you “fudge” these principles (for example, ignoring them to keep a talented individual happy) it leads to disruption, mis-alignment and bigger problems down the road.
Here are some of the principles we try and stick to at Redgate, where our People Team have come up with these, then been instrumental in making sure they happen, regardless of department. A lot might seem obvious, but Redgate is the first place I’ve worked where these are actually implemented!:
Provide proper feedback. Everyone, in every role, gets a quarterly meeting where feedback is gathered from colleagues and peers. This is then discussed with the individual concerned, written up and uploaded to record. More than this, we don’t shy away from difficult feedback – better to mention issues early and often than wait until they’ve grown in to a “big deal”. It’s tempting when busy, to ignore this process, particularly where “You don’t think there’s anything that needs discussing – that person is great!”. But our People Team have made sure we stick to this principle, and it has pre-empted so many problems down the road, I’m thankful for this “enforcement”!
Simple management structures. There are different opinions and ideas here. But after many years we’ve come to the conclusion that “Simple is best” (“Ingeniously Simplicity” is part of the DNA of Redgate). Specifically:
A manager manages approximately 4-8 people. You can strain this in the short-term (“I’m just managing 10 people for 3 months, to help a colleague out”), but long-term, if someone is a manager this is the correct number of people. And sometimes, for new managers, you might let them manage 2-3 people for a period, but that’s with a view towards growth.
No dotted lines. No double managers. No “I’m half managing this person, also responsible for a bit of this other function, and still looking after bits of my old job. That’s okay isn’t it!?”. Make the hard calls on who’s doing what. Without this, you’ll never get true accountability, period.
A manager is accountable for the people, function and performance that they manage. If you’re managing, for example, the digital marketing team, then you as the manager do far more than just handle the teams’ holiday requests – you understand digital marketing better than anyone else in the business (including your manager), you set the objectives for the team and are accountable for making them a great team, doing the best work they could be doing.
A function is split in to simple, logical sub-units that everyone else can understand. For example, your Sales function might be split first by geography, then in to “Strategic Accounts”, “Mid-market”, “Inside Sales”, “Renewals”, then other functions like Sales Enablement, Sales Ops and so on. The details don’t matter, what matters is that people know that “The Mid-market team is responsible for revenue from that tier, if I’ve got a question I know who to ask, and if I want to hold someone accountable, I know the manager to talk to”. Again, Keep It Simple.
Professional Managers. You don’t get to be a manager at Redgate until you’ve been through a rigorous “Transition to Management” process, run by the People Team. So many problems occur when you “Give someone a chance at management” but either a) that person isn’t ready or b) doesn’t really want to do that role! The real problem with this is that it’s not just the new manager that struggles. It’s his/her team that really suffer, often in silence. So it’s vital that someone is ready for management (for everyone’s sake), and also really wants to do it – are they really happy giving difficult performance feedback as part of their job? If not, don’t take the role! As a manager of mine said many years ago:
Everyone thinks they can do their manager’s job. The question is whether they want to
Do Performance Management. This is the most difficult area to write about; and I wouldn’t want to go in to details. But perhaps the most important part of the structure that the People Team provide us (and support us with) is performance management. Everyone has a Job Description and this is what people should be doing day-to-day in their roles. It seems obvious, but losing focus on these things is where many problems arise. And handling those mis-alignments early and often is the key to good performance management. If someone’s JD states that they should be “Creating a strong social media strategy, executing that strategy, and collaborating well with the rest of the business on social media plans” – then this is what they should be doing! If not, then the sooner you have a quick word (“I’m fine with you spending time on project X, but I still expect you to do these things in your JD”), the better. Of course there’s an art in being flexible, and giving people opportunities to grow – which we strongly encourage. But helping people grow in the role they’re doing is a key part of your job as a good manager. And of course, not being afraid to tackle difficult issues when they do arise.
Build a great team. If you are lucky enough to be managing a team, it’s your responsibility to make that group of individuals a team. I won’t wax lyrical here about what makes a great team – only perhaps that you know when you’re in one. But the job of helping those people work together, providing vision and common purpose, multiplying their efforts ten-fold to make them more effective – that, at its core, is a central part of your role. NB: It’s not the team’s job to make sure they work well together – it’s yours! Again, our People Team make sure that happens.
These principles of management are to me, the under-pinning of any department – sales, marketing, engineering, finance, ops, research, IT, customer success, whatever you have at your org. And as I say, though they seem so obvious, they are rarely implemented.
But why? Why do they matter so much? If you work in marketing, you should be spending the vast majority of your time thinking about great marketing. How can we reach more people? What do our customers really value? What market should we actually be working in? Is our brand still right? How can we run the best conference in the world? How can we help land that six-figure deal? And so on. My experience is that when you short-cut the management principles above, you find your time taken up with work which isn’t great marketing. Sitting in rooms figuring out “Who owns what?”, “Why these two people have clashing objectives”, “Why this person doesn’t know what he’s doing”, “Who’s really running that team, Jo or Colin?”, “Why team X just can’t seem to work together”. Firefighting people issues that just shouldn’t come up in the first place. Good management practice is how you pre-empt this stuff, so that you can spend your time on the great positive work you could be doing.
To make sure these things are implemented you need an amazing HR department to frame the work, develop a programme and support it going forward. Of course, I’ve missed off 100 other things a strong HR team manages, and I apologize for that. But for me, these management principles are one of the key “value-adds” this group can provide to make your company and teams really thrive.
I love the book Rise of the Revenue Marketer. In it Debbie Qaqish describes the need for a change program to move your marketing department from being a cost centre (“We’re not sure what marketing do, but we need them to do the brochures”), to a revenue centre (“They’re responsible for generating a significant proportion of our company’s revenue”). Though the journey is easy to describe, it’s a long and arduous path to take.
We at Redgate have been on this path for a while now, and we’ve made enormous progress, particularly in the last 12 months. But one of the things that slowed us down was holding on to certain beliefs about how to measure marketing performance, how to measure the impact of marketing work – and holding on to those beliefs for too long, when perhaps they just weren’t true. Lots of these ideas came from conferences, blogs, books and make a lot of sense on paper. But when you get to the real world of implementing something, the reality is not always as expected.
Here I’ll go through five “myths” that I found to be unfounded. Of course, these come with big caveats – we’re one specific org, with a specific market, with particular advantages and disadvantages – so all should be taken with a pinch of salt. Still, with that caveat in mind here are my five, starting with the most controversial:
Myth 1: Attribution Models are Useful
The idea of a marketing attribution model is that you can take every lead, opportunity or sale and somehow work out “What were all of the things we did in marketing that contributed to that outcome, and what value would we give to each of these things?”. For example, I just generated a lead, I could go back and look through the path history of that individual, find that she clicked on a PPC ad, attended an event, did a Google search, interacted with us on Facebook, and so on. I then have some smart “multi-touch” model that assigns value to each of these (maybe the first or last get higher scores? There are lots of alternatives). If you then know the value of a lead (let’s say, $10), you can work out the Return on Marketing Investment (ROMI) for each activity by comparing the “value” (e.g. maybe $3 for the PPC click), against the spend.
But, I think this is baloney. This is a classic example where – just because you can do the maths, doesn’t mean to say the results are accurate or useful. The model is flawed for at least the following two reasons:
Data. It’s impossible to get all of the data about an individual’s path history – everything they’ve done, interacting with your brand over the last few years. Not difficult, but impossible. You don’t know about the offline activity they’ve done, you don’t know about the browsing they’ve done on their mobile, on their home laptop at the weekend, you’re very unlikely to have a link to their activity from three years ago (when they actually discovered the brand) and so on. NB: some MarTech orgs promise they can deliver on all these things, but I don’t believe them!
Over-simplistic view of how customers learn about a brand. The reality is that an individual will have 100s of different interactions with your brand all of which build up to a given perspective. They’ll attend an event, they’ll speak to a specific person on your stand who may or may not be great, they’ll read 100s of different pages on your site, they’ll talk to their colleagues about you, they’ll read third party review sites, they’ll kick the tyres of the software, they’ll see an ad on a news site (without clicking on it!), they’ll remember a comment from their boss two years ago (“Oh, you should check out Redgate, see what they’ve got”), and so on. All of these things somehow add up to a favourable view of your org (or otherwise!) and to try and model that with a simple sequential attribution model isn’t, I think, valid. The best you can hope to do is make sure every interaction with your brand is awesome and have faith that will lead to positive results.
Okay, maybe it’s not all baloney – but the approach is, I believe, significantly flawed. Nevertheless, there are some things that can be measured – which brings me to myth 2…
Myth 2: Everything should be Measured
Not sure this is controversial actually. To quote Seth Godin:
The approach here is as simple as it is difficult: If you’re buying direct marketing ads, measure everything. Compute how much it costs you to earn attention, to get a click, to turn that attention into an order. Direct marketing is action marketing, and if you’re not able to measure it, it doesn’t count.
If you’re buying brand marketing ads, be patient. Refuse to measure. Engage with the culture. Focus, by all means, but mostly, be consistent and patient. If you can’t afford to be consistent and patient, don’t pay for brand marketing ads.
The danger is that, in an effort to measure everything and show the return on everything, you stop activities because they’re fundamentally un-measurable. The myth is that “Because you need to show a repeatable, predictable and scalable revenue engine, you need to understand and measure the impact of everything you do”. But that’s taking the argument to an extreme view – the reality is that there will always be spend in your budget where you won’t be able to tie revenue to that spend. Ever.
Myth 3: You Need a Funnel
Perhaps controversial again. A traditional funnel implies a sequential path for a customer from something like “Awareness of problem” to “Discovered our solution [to that problem]”, “Evaluated our solution” finally “Becomes customers [then perhaps evangelist etc]”.
Again, we’ve never found this to represent reality. Of course all models are exactly that – models. They’re not perfect, but if they’re useful, that’s okay.
But I feel the funnel fundamentally misrepresents how real people actually interact with a brand. From talking to customers what you find is that there are just an enormous number of holes in this approach. For example:
The “Awareness of problem” is just too crude. The chances are that your content was very unlikely to be the way people became aware of the problem; that actually their knowledge has built up in a fragmented way over time; that they’re still learning all through the sale, even post-sale.
The idea of “stages” like this just doesn’t make sense generally. Often people are already customers of yours – and they’re finding new things you offer. Their understanding of your offering is forever a slow build up (from a theoretical “nothing” many years ago, to some partial understanding now), that it goes back and forth.
A funnel implies a single direction of travel, a path to enlightenment, ending with purchasing your tool. But, from talking to customers I find a much messier reality – people go back and forth, there are interrupts and so on. We’ve found it almost impossible to actually classify people in to different stages – it’s too over-simplistic to be useful (we’ve found).
Myth 4: Conversion Rates Matter
Again, controversial. But our experience is that conversion rates are the lever you are least able to pull. Why? Because for most orgs, they have a pretty well optimised process for converting leads at different stages. At Redgate, there are certain lead types that convert at a 70% conversion rate, within a 2 week period – and that has been consistent for about 10 years, almost regardless of what we do! We’ve spent a lot of time and effort on this stuff – its value is in “Can we improve/optimise this?” – and generally we find we can’t. Of course you monitor it, to make sure it’s not dropping (e.g. because some leads got lost), but otherwise – stop worrying.
Finally, myth 5…
Myth 5: This is an Impossible Task
I wanted to end on a positive. 2-3 years ago, I thought the task of building out a “revenue engine” that was vaguely water-tight, believable and actionable was never going to happen. There were so many holes in the data, it was so hard linking activities to outcomes, that it wouldn’t actually happen.
I pleased to say that isn’t what has happened. It’s been pretty arduous, but we are now on the brink of a model that allows us to:
See the impact of many (but not all!) of our activities
Track the resultant leads through to opportunity then revenue
Match the activities with budgets to pull out ROMI
Use this insight to stop certain activities (already cut a few things), start a few more, and adjust how we do other things.
A simple example of the last point – in 2018 we ran a number of webinars of different sorts. We tracked through the leads, opportunities and revenue from each of these and found that the impact of having a “star” presenting the webinar (someone big in our community) had a far bigger upside than expected – at little or no additional cost to us, other than the trouble of finding and convincing these stars. I.e. one webinar with a star involved would generate more high quality leads than 2-3 webinars without such a person on the event. So this year, we’re changing our program a little – fewer webinars, but each more impactful with more big names presenting.
Just a small example, but there are countless more – we’re building out a model where we know how and which levers we can pull (and which we can’t), and at what cost. It took a long time to get there, but it’s finally becoming real. Feel free to get in touch if you want to know more!
The Subscription Economy is the idea that more and more customers (and therefore vendors) are moving over to being subscribers of services rather than purchasers of products. An obvious example is Spotify – the money spent by consumers on streaming services now significantly outweighs revenue from physical CDs or even digital downloads:
In 2019, more money is spent by music listeners on monthly subscriptions to music services, where customers never actually “own” anything in any real sense – a complete transformation in the industry.
Central to Tien’s book is the argument that this change in behaviour is far more widespread than the obvious examples (mostly from consumer goods, such as music or films) – and, particularly for those companies selling software products, those vendors will have to switch away from selling products (with things like “Release versions”, “Upgrades” and so on), instead moving to evergreen services, based around customer need.
Tl;dr – I like the book, and it makes some great points. But – and this is a point made explicitly by Tien part-way through the book, without any irony! – it is essentially an evangelical marketing book. So it’s very strong on selling the idea of subscriptions as a business model, but a little thin on the actual details. Still, well worth a read.
Longer
The book is in two halves – the first half providing many examples of industries where this transformation is happening, the second a more practical guide to how to make changes in your org to move over to a subscriptions business.
In the first section, he moves on quickly from the obvious examples like Netflix and Spotify, to a number of industries where the move to a subscriptions model is either happening already or “inevitable”. For example, travel, newspapers or retail. It’s the first half that I find least convincing for two reasons – firstly, where significant brands are offering subscription services, these are still pretty minor, even experimental. A good example is Fender. facing a downturn in guitar sales, Fender now offer an online teaching services (called “Fender Play”) as part of the deal – buy an axe and get a monthly learning app as part of the deal. This is great but – I struggle to believe this is a significant revenue stream for them. If anything it’s closer to the old “Upfront perpetual license + ongoing support costs” model (they certainly don’t take the guitar away if you stop playing!). There are lots more examples where the offerings provided by major brands are only bit parts. The obvious one is Apple – yes Apple Music is very successful, but nothing compared to their product revenue. Obviously I could just be taking a rather backward-looking view here. But the examples given don’t make the point strongly enough – the number of large brands that have switched to the alternate model seems small.
But maybe the future is with the disruptors? The small orgs disrupting these Goliaths with subscription models. The second reason this first section is a little unconvincing is that the examples given are still very much small fry. An example is Zipcar – a car service that you use where you just pay for what you need – hire by the day or hour. Again, an example where instead of customers owning a car, the subscription offering is far easier. Again, fine, but Zipcar is still a tiny part of the market. But at least I’ve heard of them! Many of the other examples given (e.g. for shaving or flying) are still very minor brands that I’ve never even heard of.
Of course, it’s perfectly possible these are just early signs, the innovators that will lead the way to tomorrow. And that’s very very possible – my argument is that the examples given aren’t enormously convincing of the inevitability of this transition. Later in the first half Tien talks about the move to subscriptions being necessary as companies selling non-SaaS products, tied to old revenue models plateau and start to decline. But this isn’t the case where I work (Redgate), where we’ve seen significant growth in this older revenue model. Of course we’re looking in to subscriptions as a way forward – but the start of the book is a little too evangelical for my liking. The nuance is that, for different orgs in different industries they should look at the change carefully and with a very strong strategy in place. Is it right for our customers? Will we really get new customers through this offering? How will we manage the change, the impact on profitability and value? Do we do it now, or in two years? Or 5 years?
But – what if you’ve already taken the red pill and want to know what happens next? This Tien addresses in the second half, which I found stronger. Here he goes through each part of the business – sales, marketing, IT, product, finance – and works through the impact on each area. For example, the vital importance of getting your finance reporting and infrastructure changed for the subscription business – all of the old models and KPIs change, and you have to address this upfront.
And the strongest part of this section is the discussion of culture. There’s a great chapter called “That WTF moment” – Tien describes a situation where the board announce the transition, provides flashy PowerPoints, does the internal sale and the company react with “WTF”! He then talks about the change management process needed to get everyone on board and transform to a customer-centric culture focussed on subscriptions (rather than the “sell-and-forget-the-customer” model associated with product sales). It’s really useful to see this part of the change understood and addressed.
There are weaker sections here where he talks about breaking down siloes, how Zuora doesn’t have “Sales”, “Marketing” or other departments, instead having divisions like “Position”, “Acquire”, “Deploy” – without siloes between these departments. But this is missing the point – all org structures have inter-departmental collaboration issues that need to be pro-actively handled. Just re-branding the departments, or changing the responsibilities of different areas doesn’t change that at all – you still have to do the work to get people to work together.
But that aside, I really liked the second half, maybe because our company is further down the subscriptions path already (e.g. we have some products on this model now). I particularly liked the detail under “Finance” – you really need to understand the different ways in which you financially govern a company, the metrics you look at and so on, and this is really well explained. The “Marketing” section is a little weak, but ho hum – to the outside observer most of marketing is a mystery anyway 🙂
Nevertheless, I still found the second half a little thin. I was left wanting to know more, to understand the nuances, the subtleties of these changes, and the book ran out of pages at this point. There’s a slightly surreal moment on p150, in the marketing section where Tien states:
What you are holding in your hands is the work Zuora does in Room One, which is the story of the Subscription Economy.
I.e. Tien is explicit that the book is a marketing tool to create early interest in customers! Fine, but it does slightly undermine his story – he’s explicit that the book is basically just a marketing campaign to get people interested in buying a copy of Zuora in the future. Personally I’d rather have seen a book from a third party, a contractor or thought leader. In the DevOps and Continuous Delivery space, an independent offering like Jez Humble and Dave Farley’s Continuous Delivery book is far more insightful and impactful and has had a much longer shelf-life than I think this book will have.
Tien is the CEO of Zuora, a vendor selling subscriptions licensing software. In this sense it reminds me of a very similar book from Hubspot about “Inbound Marketing” from 2009. This latter book again was pretty evangelical about how every marketing org would need to throw out all the old marketing strategies to be replaced wholly by “Inbound marketing” – a concept sold by Hubspot who sell inbound marketing software. But with hindsight that was overstating the case; and this book from Tien Tzuo feels very similar. So he makes some great points – particularly around cultural changes that you need to address, to effect the changes needed in your company – but the book only really scratches the surface of the changes you need to make, and is really targeted at people who haven’t yet made the leap to a subscriptions-based business. If you’re already a long way down this rabbit-hole, you’ll be left wanting more insight and analysis by the end.
I recently spoke at the B2B Ignite conference in London on “Building a MarTech Stack at a Small Organisation: A Real World Example of What’s Worked and What Hasn’t”. Here are my slides from that talk.
Rules of Thumb
Manual first, then automate
You’re either growing revenue, or saving costs. Should be able to show this benefit on a piece of A5
The business case has to be overwhelming
However long/expensive you think it will be to implement – double it
Step changes, not incremental improvements
It’s a lot of pictures, so might be hard to understand without the actual talk! Any questions, feel free to get in touch, always happy to help.
Whenever I meet customers I always slip in a marketing question or two along the lines of “Where did you hear about us? What brought you in to Redgate?”. One of the answers from a couple of months back was:
Well a year ago, I got a new boss and she told me that I had 6 months to turn our dev team in to a “DevOps” team. I did most of the work then realised the database was causing us real problems. So I did a Google search, found your website, and what you said made complete sense to me – you knew what you were talking about, so I tried your software out.
Okay, great but – how on Earth do you measure the effectiveness of your marketing activity with answers like this? What’s the ROI of this lead? I know the return (the customer bought the products in the end), but the investment? How can you calculate that?
I’ve written endless articles over the years about marketing attribution, “performance management”, lead measurement and so on. All with the stated aim of showing “What’s working?” or “What’s the ROI of my marketing budgets?”. All different ways of asking the same thing.
And yet, years later, after reading many others’ articles, attending conferences, seeing demos from various products claiming to give the “formula” (marketing automation platforms, Google etc), the answers don’t feel any closer. Why is it so difficult?
Firstly, every business is different with, hopefully, different marketing strategies and tactics – some activities are inherently more measurable than others. A B2C business selling gizmos at $10 through Facebook ads is fundamentally different to a B2B org trying to sell $3m deals to the Fortune 500. Measuring the performance of those Facebook ads where the customer buying cycle is likely very short (“I saw your ad, I clicked Buy Now 10 minutes later!”) is a significantly easier task than measuring the impact of four years of concerted marketing plays to win over a multi-national bank. But still, all feel like hard problems.
It’s become a cliché in marketing blogs to quote the cliché about “I know half of my advertising works, I just don’t know which half”; but I include it because I think it can be updated to something like “I know what I do to get half my leads, I just don’t know about the other half”. I feel this better reflects that state of play with marketing performance management, hopefully I can explain why.
At Redgate we fundamentally get two sorts of leads – what I refer to as “Always On” leads, and “Outbound” leads. I think, for the first type, measurement of marketing ROI is integrally difficult, I’d argue impossible. For the 2nd type, you can measure ROI and should do so at all times.
Tackling the latter first – these are leads where you can make a strong argument that, if it wasn’t for a given activity, you wouldn’t have got the lead. An obvious example is an event or a graphical ad in the trade press. There’s a pretty solid chance that if you hadn’t been at that event, or placed that ad, you’d have missed that person. The trigger that caused that person to make an enquiry was paid for, by you. Of course, there are arguments that they might not have really been interested if they hadn’t recognised your brand from years of prior work; or that “Maybe they would have come to your site anyway!”. But that over-complicates what is already a difficult problem. If you spent $10k going to an event, and you made $20k, you should attribute that $20k to that $10k spend – simple.
This is the half you can understand and measure. For media ads, events, webinars, other placement spends, I think you can put together a pretty good spreadsheet or other tool showing the ROI on your investments – you just need to do the graft (or use a tool – I’ve been most impressed by Pardot recently, which seems to do this sort of thing very well).
But what about the first half? What triggered the customer coming in to find out about your offering? It was his boss telling him to find a solution. It was nothing to do with your marketing. Like a lion waiting for her prey to walk past, your job is to be “Always on”, ready with the right material, the thought leadership, the clear CTA, the understanding of the customer. Most of these customers do their own research well before they talk to your sales people – they read your website, they read other peoples’ websites, they talk to their analysts, talk to their colleagues. You may have made investments in all these areas both in terms of $$ spend, and employees’ time (web copy, site architecture, positioning and messaging, briefings with analysts, content placement, blog posts, influencer programs) but really how can you apportion this effort to the lead?
This is a hiding to nothing. Trying to work out how the salary of the individual who spent half of her time talking to Gartner, Forrester and IDC can be attributed to the leads that came in this year is both an impossible and pointless task.
The reason this is called “Always on” lead generation, is because, like the lion waiting for prey, you have to always be there when the customer goes looking. If you’ve got the money, you have a pack of lions covering every location – every analyst, your website, 10 other websites, recommendation sites, articles in the trade press and so on. But when that customer does a Google search, you’re ready and waiting with the greatest copy and thought leadership you can muster.
[A quick aside about SEO and PPC – this is table stakes. If a customer out there has a need for your solution and he/she doesn’t find you very very quickly through Google then you have a more immediate problem that needs fixing immediately. Customers not finding you easily when they’re already out there looking is a fixable problem, primarily through good SEO practice.]
The important subtlety here, and why this is such an issue, is the driver of interest for customers. For the outbound activity, it’s legitimate to say that your actions have precipitated that activity – have, in some way, driven that behaviour. Theoretically if you do more of these activities, spend more money, you’ll get more leads – if I spent $10k this month on webinars, then it’s possible that spending $20k might double the number of leads (ignoring issues like diminishing returns).
But for the “Always On” leads, you haven’t driven this behaviour. If you doubled your spend on say “hiring even better copywriters for our blogs”, would that double leads from this source? No – because the primary drivers are out of your control – they’re in the hands of the businesses you serve. May be you can improve conversion somewhat, but I’d suggest the attribution is very tricky.
So overall, I do think it’s possible, and essential to show where half of your leads come from, the ones where you’re precipitating the activity yourself. This information should be readily available in Excel, PowerBI, Pardot, whatever and you should be reviewing it constantly – was the spend right? What can we double-down on? Cut?
But for the other half – stop worrying. Abstract calculations based on employee time or similar are pointless. You’ll never really understand the complex interaction of customers and touch-points that led to that lead – what value does it bring, knowing that the customer read 129 different parts of your website before getting in touch? – so stop worrying, and focus on measuring what you can measure.
I’m writing this on my way to the Sirius Decision Summit in Vegas (sitting in Terminal 3). I’m hoping to get a lot out of the conference (though I’m currently in option paralysis mode – too many sessions to choose from).
But this post is about a very small part of that conference – though it’s something which I feel is very important for brands, and is often forgotten about.
On the first morning of the summit, Sirius arrange a 5K run for all attendees. Though it seems like madness going for a 5K run along the Strip in the desert weather, it’s all for a great cause – the VWM Families Foundation. In particular, after a long flight, it’s just the sort of thing you need to get “back to normal” and find some energy for the days ahead.
But what I also thought was interesting was that this is a great example of a “Brand Amplifier” for Sirius. By this I mean – the run isn’t something directly relevant to what Sirius do. There’s no “Call to Action”, there’s no surrounding “Digital campaign” with attached ROI, no “Strategy”.
What there is, is Sirius doing a great thing that can only lead to a positive residual opinion of the organisation. Would I buy their services on the back of this alone? Of course not. Is there a clear ROI on the time and investment from Sirius – unlikely. Is it based on deep customer needs analysis and segmentation? I very much doubt it. But, should they do it? Absolutely yes!
Activities like this (and there are many sorts) are great for “amplifying” the rest of your marketing. And most great companies do it. They provide positive re-inforcement of your core messages and campaigns in a way that is hard to measure, but still also worth doing. Note, I’m 99% certain that Sirius aren’t hosting the run as part of a cynical campaign to “Boost their brand awareness” – I’m sure they’re just doing it because it’s a good thing to do. But they’re doing it nonetheless.
The effect on customers is intangible, but still real. It leaves me with the impression that Sirius are the sort of people I’d like to do business with. Of course, the proposition has to be strong, what I need, it has to work and so on. Like a guitar amplifier, if the signal going in is poor, then the amp only makes things worse. But if the signal going in is good, then the amplifier can only help.
What does this mean for you? For most, it’s the sort of things that are on your website around and between your core messages. Sure, front and centre you’ve got the key benefits of your offering, all finely-honed over the years. But what does it say in your “About us” or “Company” section? Is it a series of glum black-and-white photos of aging men from the “Management Team”, or is a story about the annual charity ball that your company runs? Is it a bland and detailed description of your services, categorised and ordered, or is it photos of your colleagues contributing to a local hackathon?
And it extends beyond that – what activities does your company do to support the community it serves? Anything? It’s not just charity work, it’s user groups, universities, local events, sponsorship and so on.
Of course, not every organisation wants to be appear as “fun” – if I’m looking through a financial advisor’s website, I don’t want to see pictures of the team drunk at Ascot. But the “peripheral” activities that your company undertakes, have a stronger effect than you might think (both positive and negative).
Does this matter for B2B? Yes, I think it does. To repeat – if a company doesn’t provide a great service or product, that I genuinely need, at a good price, then I’m not going to bite. But we are people, buying from people – I’ve encountered a few examples over the years where the impression given by a company’s website has strongly put me off that organisation (even if you often end up buying, begrudgingly). And there are orgs that give such a strong impression of the great company they are, that you actively seek them out when looking for a solution. Did I make the purchase because of that? No. Did it help – yes, yes it did.
Finally, if you work in marketing today, you’re likely – and rightly – being pushed to measure the impact of your work more effectively than ever. Spending millions of dollars on campaigns without a clue whether they work or not, is no longer okay, and that’s a good thing.
But if you’re worrying about the “ROI of the charitable work that we do” then you’re asking the wrong questions. These things are good in-and-of-themselves. For me, they require no justification, no debate. For the Sirius run, it’s a win-win-win – I win because I get a nice run after a long flight, the charity wins from the donations, and Sirius win from the brand amplification. That’s justification enough.
“Don’t find customers for your products, find products for your customers” – Seth Godin
The simplest ideas are the best. But they can also seem the most banal. Hidden in the Seth Godin quote above is, I believe, one of the key differences between a mature and immature organisation. Between a company that is ready for prime time, and a startup that is just finding its feet. Actually, it’s not that hidden, it’s pretty clear – your job is to do what your customers want. When you do, they’ll pay you, and your salary will get paid. The alternative path (thinking that you know better than your customers) is a dangerous path.
I know this seems hopelessly over-simplistic. And of course there’s more to good marketing than that. But it’s about making a choice early on – do you take the red pill of reality, accepting that your customers know more than you, that your job is, fundamentally, to adapt to their needs; or the blue pill of disillusion – that you know better than your customers, that you can “educate” them on their needs? I think the answer is reasonably easy, but why is the pill so hard to swallow?
I’ve just come back from the Sirius Decisions Summit in Vegas. A great event, full of excellent speakers and real insight, as well as some great vendors (6sense was my favourite this time – worth checking out). One of they key messages that I heard repeatedly over the three days was the transformation of organisations from product-centricity to market-centricity. Again, that sounds banal – what does it really mean?
It means a number of things:
Your strategic decisions start from the needs of different groups of customers. From there, you work out the most profitable segments, and then what product work to do. You don’t start from your current product and see who needs it.
You focus on the people who value you’re offering most (“All customers are equal, but some are more equal than others“). My favourite quote was from Lisa Singer – “The best development teams work on the things that the are most valued by your most valuable segment”.
If you don’t know an answer, ask the customers. Assume the (aggregated) customers know more than you.
Build your planning cycle from the needs of customer segments inward, rather than starting from your product, and building out “The plan for the product”.
There’s also something else though, that they didn’t mention – and that’s about how we develop our offerings, and how we adjust our course as we get feedback.
There’s a lot of online debate about what Agile development still means, so many years after the manifesto was published. For me, the clue is in the name. It’s not about speed, it’s about the ability to change direction (based on customer feedback!). It reminds me of this quote from Warren Buffett, way back in 1989, talking about ‘institutional imperative’:
(1) As if governed by Newton’s First Law of Motion, an institution will resist any change in its current direction;
His point, that he makes elsewhere, is that organisations struggle to change direction, once on a given path. It’s reasonable – you’ve thought about your next steps, you have a vision, you don’t want to flip-flop. You don’t want to look like you don’t know the answers.
But what if the customer says otherwise? What do you do if you go out with v0.0.1 and 78% of customers say “You’re wrong – we don’t want this”. Do you stick on your current path, or do you pivot?
What does this mean practically? I always thought Jeff Bezos’s insistence on the “Empty chair for the customer” was a bit cheesy. But it’s not – it’s genius. It reminds you that, in every single discussion you have (whether it’s about a product feature, an advertising campaign, a sales tactic, an invoicing email, anything), you should always be referencing the customers’ point of view – it’s so easily forgotten.
And of course the other way is to do it for real. How often do you talk to customers? How often do they visit your company? How many do you know? Personally? I have a rule-of-thumb that time spent with a customer is never wasted time. You always learn something, and even if you don’t, you do (for example, that many of your customers just want to buy and use your software, and not talk about it much! This is insight).
But lastly, as Mark Ritson points out, you have to start with humility. Once you accept that your customers know more than you – because they’re paying your salary – you’ll find it much harder to fail in any endeavour. At the very least if you’re doing what customers want, there’s a good chance you can build a business on it in the long run.
I guess this is more a post about sales rather than marketing per se, but still – understanding buyer journeys and how you can help at different stages is an important part of the marketing role, particularly when the sales cycle is complex.
I’ve read quite a lot about marketing funnels – how customers at different stages of their journey want to hear different things from you – so you need to interact with them in different ways at different stages. But it’s always felt rather theoretical – it looks good on paper, but does it translate in to the real world? Of how people actually interact with your company? Or is it just for nice PowerPoints?
In the last few months I’ve experienced being on the other side – i.e. actually buying something – four different times. And all at similar price points to my company’s offerings. It’s been really interesting being the recipient of marketing (and sales) output from these four different companies. I’d say two of them have done a good job, and two have done rather poorly (both in terms of sales and marketing).
Rather than name names, I’ll just list the things that I think the two good companies did well and not so well. Most importantly though, it was only by experiencing these processes for real – i.e. not on a PowerPoint slide – that I really understood the impact on the potential buyer. My top-level conclusion was that it’s very easy to undermine your product with poor marketing and sales, and most of these things were pretty obvious.
Anyway, here are some of the things sales folk and marketers did well and poorly:
Listen to the buyer, and adjust as you go along. This is the biggest one for me. I kept re-hearing things of which I was already convinced. A lot of marketing collateral, messaging and content is targeted near the top of funnel – “We’re just trying to get people in with a high-level aspirational message, to get the lead numbers up”. This is fine, but if I’m already on the phone to you, then I’m convinced of stage 1. A couple of times I was sent collateral introducing me to the company – but I already knew who they were and what they did! And worse, these were repeated at the top of every sales call. If I’m talking to a sales rep, I want to talk detail, functionality, price, engagement plans, PoCs, that sort of thing. I don’t want to watch a 10 minute brand presentation. Again. The best presenters jumped straight to the point in presentations and calls, not repeating old messages, and recognising that I was already convinced they knew what they were doing.
It’s not just about functionality – I’m buying the company as well as the product. The best two companies start out with their company pedigree – how long they’ve been around, who their customer base is, even who’s on their board and who’s invested in them. When I know a company is run by the best in the business, and they have a long runway ahead of them, I’ll take them seriously. If I get a sniff that this is a start-up run out of someone’s garage, I’ll run a mile.
Product vision and roadmap are key. Again, the best sellers presented a roadmap for where the market was going, how they understood the market infinitely well, how they would be providing functionality now and in the future (read “years”). These investments are always long-term and I need to know that the company has a vision of what’s coming and that they understand the market better than me. And that they’ll create product to match!
Case-studies and big reference customers are really useful. The best sellers opened with “By the way, we’re currently being used by [insert long string of companies we’ve all heard of]. Do you want to talk to any of them?”. Immediately removes any fears I have that this is a two-bit organisation.
Professionalism. Perhaps I’m repeating the same point here, but there was a marked contrast between the professionalism or “grown-up-ness” of different organisations. From the way people talk to you at a booth, to the way they run presentations. This was also reflected in the tone of the marketing material. I’m buying grown-up products, not toys for my kids! Some of the material was “fun” but expensive marketing software is a serious business 🙂
Dump the superlatives. It’s a minor one this, but every time you use the phrases “best”, “unique”, “incredible”, “leading” and so on, it doesn’t mean anything. You need to use more descriptive and meaningful adjectives in your collateral. For example, if something is described as “The most complete database of prospects for …” then that means something – it means that there’s a good chance the database has the most entries and covers most of the market. All to be validated, but still good. However if it’s described as “The best database of prospects for …” then that doesn’t mean a thing!
Great and intelligent objection-handling is key. By far, the biggest differentiator between good and bad was the ability of the sales person to listen to my objections and handle them well. Two examples:
How to do it properly. Certainly for one of the purchases I had some quite complex and internal reasons why I couldn’t proceed to do with priorities, timing that sort of thing. Rather than ignoring those objections, the great salesperson listened and came back with a plan for how they could work with me to alleviate my time pressures (rather than add to them), and remove this roadblock – a great piece of work that really helped the sale.
How not to do it. In contrast, with another seller in a similar situation (i.e. I was blocking based on various complex reasons), he just repeated the sales pitch again. I.e. ignored my objections and just kept hitting me over the head with the same slide deck. It didn’t help..
It’s also worth pointing out that, if part of your role as a marketing department is to represent your company in the best possible light – i.e. to provide the best possible customer experience for customers – then your sales people are leading the charge on that front. My “customer experience” of all of these four companies was primarily determined by my interactions with sales people – and there was a marked contrast between the good and the bad. I like to end on a positive, so here are the traits of the great sales people (much of which follows from the points above):
Knew their product. Not to the same level as their technical colleagues, but to some depth.
Responsive. I.e. replied to emails and phone calls. So basic, but incredible how hard it was to get in touch with some people.
Professional. I’m not your mate 😉
Great at objection-handling – see above.
Had my interests and goals at heart. The best took time to understand what I was trying to do.
Grown-ups. This isn’t an ageist thing, but – I don’t like being sold six-figure pieces of software by kids straight out of college. A few years experience really shows in the call.
So, if you want to really understand what the “Buying Process” actually means in the real-world try it out. Of course, if you really want to be sneaky, try it out on your own company! Or get a friend to do so. Hopefully you’ll be impressed. But it might also highlight where you’re dropping the ball or using inappropriate marketing at different points. Worth a try.
I love this article from Helen Edwards – about the need to understand marketing theory but then the need to apply it to the real world. Theory without execution is just an indulgence, a wholly academic pursuit. But if you’re executing well against a poor strategy, you’re just peddling fast in the wrong direction.
She provides some great examples towards the end, of tools to help you link theory with practice. Reading through the articles mentioned, I happened upon this HBR article from 2004, from W. Chan Kim and Renee Mauborgne, about Value Innovation. I started reading with some scepticism – I mean, what does a term like “Value Innovation” even mean? All sounds a bit vague and hand-wavy.
But as I read through, a strange feeling of familiarity came over me. The idea that, in a highly competitive landscape, you need to move away from just making incremental improvements to match your competitors. Instead, you need to break free from the pack by staking out a new market space – re-defining the market – based on a deep understanding of what customers truly value.
So far, all so academic. What does this mean in real terms? How does this relate to what we do at Redgate? The reason this felt familiar, was a realisation that this was how Redgate had been working for years, but I doubt we even knew it!
There are many ways of running a software product company, all have their pros and cons. At Redgate we invest heavily in product development. But I don’t mean just in numbers – really the investment is in quality. Finding great software engineers, designers, product managers, coaches, tech leads and so on. It’s a constant source of worry – where do we find these great people? Are they unicorns? Have we exhausted the pool of talent in Cambridge?
But why worry about this so much? Why do we need such an exceptional group of people (almost) all of them co-located in Cambridge?
I believe the answer can be found in Kim and Mauborgne’s Value Innovation theory. Copycat development – where you just keep an eye on your competitors and do the obvious things to an existing product – is pretty easy to run. You don’t need the best people in the country to do this – just keep an eye on the competition, see what they’re doing and try to do a slightly better version of that.
But, as pointed out in the article, this can be a downward spiral – there’s downward pressure on price, as all products become decidedly “average”, none of them truly catering to the needs of customers.
What if, instead, you spent your time analysing the jobs to be done by customers? Taking an evidence-based approach to solution design, talking to customers, truly understanding what they value, so that you can build an innovate solution to their problems (rather than just what your competitors thought was important)? What if you focussed on really solving customers’ problems, finding new, better solutions?
There are some great articles on the Redgate Medium feed – Ingeniously Simple – such as this one on Evidence-Based Decision Making. The benefits of this sort of approach are hard to quantify but it is, for me, a great example of how a great marketing theory is being applied in the real world: the market strategy for the company is one of Value Innovation – finding the true best solutions for customers – and that’s a lot of hard work. It requires the best people in industry, and they’re hard to find.
But we hear the results from customers all the time. We survey our customers constantly about “Where did you hear about us? Why did you end up with Redgate?”. And our biggest source of leads? Referrals. We then ask them, “Well why would you recommend Redgate?” and the answer is always a resounding “It’s the best product there is!”. Of course a customer wouldn’t describe this as “Redgate provides the most innovate solution that matches the value I seek”, they describe it as “You have the best products” – but that only happens when you invest in understanding the customers’ needs completely, and innovating on the solutions you provide. Great marketing theory, put in to practice.
As an aside, this makes it more difficult to marketers to understand marketing sizing and addressable market – Redgate rarely fit in to the categories described by analysts, as we try to break these categories (as described in the Value Innovation article, Kinepolis ignored the existing categories of “ordinary cinema” and multiplex, and created a new category of megaplex, designed purely around an understanding of what the mass market valued). But it’s a small price to pay for having the best solutions in the market.
It took quite a while to write part 2 of this post, for reasons I’ll mention below. But like all good investigations, I’ve ended up somewhere different from where I thought I’d be – after spending weeks looking at the Twitter feeds for different companies in different industries, it seems that the way Twitter is used and is useful varies enormously by industry. This makes it difficult to build a generic model for Twitter sentiment analysis (because a model built from, say, small B2C companies, isn’t really applicable for large B2B companies) – but it also makes interesting suggestions for how companies in different industries should use Twitter to help their businesses.
Oh, and my main conclusion? People sure do hate the airlines! More on that later.
First, a potted history of how I got here:
I wanted to build some models for Twitter sentiment analysis. What does that mean? It means “Give me a tweet for your company, and I’ll tell you whether it’s negative, neutral or positive. That allows you to monitor the Twitter feeds for you (or your competitors of course ? ), and track whether they’re getting better or worse”.
I’ve collected millions of tweets from a number of different industries, B2B, B2C, small companies and large companies.
In part 1, I hit some problems with mis-classification of tweets. This came from (I believe), a problem that the base models from Stanford NLP are built from a different corpus of texts – from a generic domain (of English sentences and paragraphs) rather than, say, tweets for companies. There were also still problems with creating a decent model for tweets specifically as opposed to general blocks of English text (again, more on that below in Appendix 1).
So the next job was – could I use the millions of tweets for various companies to build some sort of generic predictor model. I.e. give me a company tweet, I’ll tell you whether it’s Good, Bad or Ugly?
Well, the answer is No. Or at least not within the time that I’ve had so far. And the issue seems to be that the way Twitter is used by companies and by companies’ customers varies significantly by industry.
A first step in creating a predictor model is to manually assign sentiment scores to a long list of tweets – this creates a training set that you then use to train and create a model. During the creation of the model you repeatedly test the model against an out-of-sample dataset to see if your model is working (to avoid things like over-fitting). As a first step, I assigned manual values to around 500 tweets (i.e. I manually tagged 500 tweets as either very negative, negative, neutral, positive or very positive), then I tried to create a model from this. However, my cross-validation scores were terrible – the model was struggling to predict the sentiment of other unseen tweets. I know this is partially because 500 isn’t nearly enough, but still – how could the scores be so bad?
What was the problem? Like all machine learning issues, I’ve generally found that eye-balling the data can tell you a lot. I believe there were two problems with my model:
The problem already mentioned that the Stanford NLP Parser struggles with tweets. And it’s not a trivial case of just swapping in a new POS Tagger for Tweets. Let’s put that to one side for now.
The bigger problem is that, from looking at the manual tags I was assigning to tweets, the values I was using varied enormously by domain.
The latter creates the problem of domain-specificity. Is a model created from, say, tweets about the airline industry, relevant to tweets about online cloud storage? It seems not.
The first clue is the distribution of scores I was giving. Remember, 0=very negative, 1=negative, 2=neutral, 3=positive, 4=very positive. For the airline industry I found the following:
0
1
2
3
4
10%
32%
41%
12%
4%
I.e. though there were a lot of neutral tweets, there were a lot of negative tweets. Here’s a very standard example:
@Delta just rebooked my 70yr old parents on a longer flight back to cvg from fco and no extra legroom that I had paid for. Fail.
There’s a lot of this sort of thing going on for the airlines.
In contrast, here’s the distribution for a couple of big cloud providers (specifically, AWS and Azure combined):
1
2
3
4
3%
83%
11%
2%
An enormous number of utterly neutral tweets. Here’s a standard example:
RT @DataExposed: New #DataExposed show: Data Discovery with Azure Data Catalog. https://t.co/5sWuKpdoYx @ch9 @Azure
..pretty dry stuff.
This actually presents two distinct problems – firstly, as mentioned, if the nature of Twitter usage and the type of tweets varies so much by industry, then models will only be really effective within their domains. Fine – if you work in a given industry (e.g. Airline, IT, Fashion), then you can create a model for your industry and use that.
The second problem however is more difficult to work around. For a given industry, I’ve found that the way in which Twitter is used varies enormously. This is what you’re seeing in these very different distributions. And if the vast majority of tweets are of a given sentiment, then sentiment analysis becomes not only difficult, but actually not particularly useful!
In the airline industry, as far as I can see, Twitter is used almost exclusively for telling airlines how bad they are. There’s a pretty strong correlation between the number of tweets mentioning a given airline and the negative feeling towards that airline. This distribution does vary by airline (see table below), but when you know that most tweets are just complaints, what’s the value in searching for the occasional (positive) needle-in-a-haystack?
If I worked for an airline and wondered “How could we use Twitter to improve our brand?”, the answer would be pretty simple – firstly, improve my product! and second, employ customer service reps to look after these people and react to the complaints. As I say, some airlines are worse than others:
Row Labels
0
1
2
3
4
American Airlines
12%
35%
37%
14%
2%
British Airways
10%
29%
46%
12%
3%
Delta
10%
37%
38%
12%
5%
SouthWest Airlines
5%
26%
47%
16%
5%
United Airlines
12%
43%
35%
6%
4%
Virgin
0%
13%
44%
25%
19%
Well done Virgin and SouthWest. Delta and United – you have work to do…
The problem in the cloud services industry (AWS and Azure) is the opposite – mentions of these services tend to consist of semi-banal tweets about new services offered, new features and so on. I.e. Twitter is used to share information about the products and services and rarely to express emotive responses (it’s very rare to read “Can’t believe how amazing @AWS was today!!! #FTW” – it just doesn’t happen). Certainly the split between B2B and B2C tweets shows this difference (I looked at small and large orgs as well, from local shops, to fashion houses, to small tech companies).
I still think there’s value in implementing a domain-specific model (for example, a model “Just for small tech companies”). The only block is, as described in Appendix 1, the problem of Parsing tweets properly. Maybe once I’ve figured that out, I’ll find a way to classify the other million-odd tweets I’ve collected for the airline industry as a starting point (there are a lot of unhappy airline passengers out there!)
Appendix 1
The problem of parsing tweets
I was warned by the following tweet from the team at Stanford NLP:
Using CoreNLP on social media? Try GATE Twitter model (iff not parsing…) -pos.model gate-EN-twitter.model https://t.co/K2JAF5XwJ2#nlproc
The problem we’re trying to fix, as described in the previous post, is that, for us to understand the sentiment of any sentence we have to carry out a couple of stages first. To begin with we need to Part-of-Speech tag a sentence. So, identify “Dog” as a Noun, “Catch” as a Verb and so on. This has challenges with Twitter which is full of URLs, hashtags, #LOLs and so on. But – the GATE Twitter model mentioned above solves this by adding in this functionality to the POS tagger. If you run a tweet through the GATE POS-tagger it will identify http://some.url/ as a URL and so on.
So far, so good. However, the problem comes with the next stage – Parsing. What’s this? If you look at a sentence such as “I don’t like ice-cream”, the tagger will identify and POS-tag each component of this sentence – I, do, not, like, ice-cream. Great, but to understand the sentiment of this sentence, we need to group these elements further. We need to understand that there’s a hierarchy whereby do and not are grouped together, and apply to like to negate this term. I.e. this sentence is actually negative despite the fact that like is a positive word.
And herein lies the problem with parsing tweets – because of the language used in Twitter, often abbreviated, often partial, it’s very hard to properly parse tweets and work out this structure. This seems to be the problem from the very brief analysis I’ve done. The Stanford team (and others) do state “Sure, you can try the standard parsers using tweets tagged with the GATE POS tagger, but good luck with that!”. It obviously needs more work, and maybe when I have more free time, I’ll have a look!
Reading one of the many number of content marketing pieces from HubSpot, I noticed the following from a basic piece on What is Digital Marketing?, after paragraphs about the virtues of Inbound marketing techniques:
Digital outbound tactics aim to put a marketing message directly in front of as many people as possible in the online space -- regardless of whether it’s relevant or welcomed. For example, the garish banner ads you see at the top of many websites try to push a product or promotion onto people who aren’t necessarily ready to receive it.
Now HubSpot obviously have an agenda here – their whole business model rests on the validity of the Inbound marketing approach over Outbound approaches (such as “garish” banner ads ), and so they’ve over-stated their belief in the inefficiency of ads. But are ads really garish and intrusive? Are they really “push” advertising (rather than the “pull” of good content)? What’s the problem here?
Since becoming CMO of Redgate and, perhaps foolishly, updating my LinkedIn profile to reflect this, I’ve started receiving endless emails from agencies, recruiters, marketing data organisations and so on. And many of these are what, I would call, if not rude, certainly intrusive and over familiar. These techniques have been written about elsewhere – this week alone I’ve had:
Use of “RE: Our conversation” in the subject line (really, I don’t remember this!?)
Taking names from my LinkedIn network and saying “Your colleague <Insert Name Here> said I should speak to you…” – when I know that’s not true
Assumptive closes (“Shall I book 20 minutes in for a chat on Wednesday?”)
Stalking (early messages which seem innocent enough, chatting about marketing issues, but then soon turn in to sales patter)
…and so on.
I find all this pretty intrusive. But isn’t it just the same thing as “garish” banner ads, intruding on my field of vision, when I’m trying to get something done on the Internet? Interrupting my work when it should be me in charge of my flow (as per the Inbound model)?
I think this is to overstate the intrusion from banner ads. Firstly, yes there are very interruptive ads which fill the screen, and you have to either play “hunt the X” to try and close them, or wait 15s before you can move on. These are pretty annoying. But most graphical ads aren’t like that – they’re well branded rectangles, which are as ignorable as you like. As a marketer I hope you’ve picked up on the branding, noticed a message, that the ad has lodged somewhere in your subconscious, so that next time you’re looking for a solution you think, “Oh yeah, who were those Redgate guys?”. But of course, you might just ignore them (and I’d be very surprised of you clicked on them – we all know the stats on banner ad click-through rates), and that’s fine.
I don’t feel this is nearly as intrusive as aggressive cold-calling and emailing – these are marketing techniques too, but exhibit the worst traits of “push” marketing – interruptive, based on your timetable, not mine and quite frankly, not leaving me with a particularly positive experience of your company. A well designed ad, perhaps with humour, certainly beautifully designed isn’t in the same category.
As I say, HubSpot have an obvious agenda – to push the Inbound model and disparage outbound techniques, but the latter shouldn’t all be tarred with the same brush. Ads are as popular as ever on the web, and as more options for personalisation and targeting become available to graphical media – combined with the deluge of mediocre content – I feel this un-intrusive channel will have a resurgence.
But you’ll never find me pushing the dishonest cold-call/email (“I spoke to your colleague yesterday about how we could help you..” – no, you didn’t!). That’s truly interruptive marketing, which does nothing but damage to your brand.
I’ve just finished the excellent Complete Guide to B2B Marketing by Kim Ann King. It’s very “List-ey” – it’s full of To Do lists (“Want to figure out your budgets for media spend? Here’s a 7-point list of how to do it”), which I really like. Many marketing books are rather waffly and vague, so a practical guide is always welcome.
But, here’s the rub – by the end of the book it would be very easy to feel completely overwhelmed by the list of things you need to do to be running a world-class marketing organisation! From reading the book you’d be left with the impression that you must be doing all of the following:
Fully integrated web, marketing, customer and predictive analytics
Implemented full experimentation and optimisation platform
Full marketing automation
Advanced personalisation and targeting across all channels
Complete oversight of the marketing funnel from out-of-funnel to leads to MQLs to SQLs to closed
A clean, de-duped and pristine CRM
A full inbound/content strategy
Deep and extensive planning cycles from data to goals to strategies to tactics to results and back round again – carried out quarterly
Segmentation, positioning, messaging, buyer personas and so on for every product group and segment
A Brand awareness plan for new markets
Demand generation activities across all stages of the funnel
Full retention marketing plan for your “existing customer” segment
A plan for organisational enablement for all of the above including budgets, staffing, forecasts
On top of all this, keeping on top of new developments in marketing, self-education and so on
..and this is just scratching the surface. In fact she’s very open in the first chapter about how the role for anyone in marketing today can feel overwhelming, that there is so much to keep on top of.
How do you cope with this? All of the things above seem vital, important – how can you be doing your job properly unless you’re doing all of the above?
I’ve also just re-read Porter’s great article on Strategy (https://hbr.org/1996/11/what-is-strategy – you need an HBR subscription to read it unfortunately). One primary point he makes is to ask the question “What is a strategy?” and one of his tenants that qualifies an activity as “strategic” is whether or not you are making choices to not do something. For example, if at your business you want to “Improve the reporting system so that we can see product performance better” – this might be a big project, but you’re not choosing to not do anything. No-one would choose to “Make reporting worse so that we can’t see what’s going on”. All you’re doing is improving your business effectiveness.
However if your company had two products, A and B, and you said that “We’re only going to sell product A going forward and stop selling product B” – that’s strategic, because someone else could choose to sell product B instead (or stick with both, or neither).
How is this relevant to Kim Ann King’s book? You have to make choices. You have to make choices about which elements of marketing activity you are going to focus on, and to which you are going to say No. This is your job as a marketing leader, to prioritise and say no to things. Anyone can take the list above and propose “Doing all of the above”, but that road leads to a lack of focus and burnout.
How do you choose? It’s the simple, but difficult job of understanding your business, and where your problems are. To take an example from my own organisation, Redgate. There’s a section in the book about “Building a community site, with content to build trust and inbound for your brand”. But, we are fortunate to already have this (a couple of sites, http://www.sqlservercentral.com and http://www.simple-talk.com). It’s not that these can’t be improved, but is it a priority to start a new community site at Redgate? No it isn’t.
This is an easy one though – when you’ve already ticked something on the list. What about all the things you haven’t done yet? This gets more difficult, but then this is your job. Should you spend the next year cleaning and de-duping your CRM system so that you can implement advanced personalisation and targeting? Or re-branding your company? Or building analytical capability for the future? Or implementing a MarTech platform? Or experimenting with new channels?
The job is to diagnose – what are your current problems? What is currently holding your business back, your constraints? What work could you do that would move you towards your company goals next year? This latter point is vital – if your company objectives are about growth rather than, say, cost-cutting, or process improvements, this suggest different activities.
What’s very important is to recognise the different go-to-market strategy and type of company that you work in, compared to others. Perhaps my one criticism of this book is that, though it purports to be specific to B2B marketing, there’s not enough opinion on what is most useful for B2B marketing, and what’s more relevant to B2C. There’s some (e.g. that LinkedIn is more relevant than SnapChat) and there is more of a focus on lead nurturing through to sales people (more relevant to the high-value/low-volume world of traditional B2B), but there isn’t quite enough direction on “This activity is popular about B2C marketers, but really is a waste of time for you”.
This is where your job comes in – what sort of B2B org do you work at? At Redgate, really we’re B2BC. We’re absolutely selling software to businesses – there’s no way Jo Public is interested in SQL Server comparison tools. But, where most traditional B2B orgs are high-value/low-volume with all that entails (low lead volume, high ATV, significant sales nurturing, multiple buyer personas in each org etc etc), we are much closer to B2C in our business model – low ATV, high volume, mass (1:many) digital marketing and so on. So for us, certain activities are more relevant than others. As an example, most marketing automation platforms use a nurturing model based on slowly taking leads through a number of stages (awareness, leads, MQLs, SQLs etc), using personalised content – based on in-depth data and analytics for different customer segments. This is needed because often B2B organisations have complex offerings that need to be explained and “sold” to companies, so that they understand the benefits of spending $500k with that vendor.
But – what if this isn’t you? What if you sell software for $400 that, quite frankly doesn’t need explaining in this way? What if it’s pretty darned obvious what it does, and the free trial tells the end-user everything they need to know? In that scenario, is it worth investing millions of dollars in a new marketing automation platform? What’s the uplift going to be – will you ever get payback?
It’s these hard decisions that you need to make to ensure you and your team don’t get overwhelmed with new activities. You’re making strategic decisions when you decide not to do one thing and instead do another. May be you put marketing automation off for a year (despite the overwhelming message from the industry that you have to be be doing it ) and focus on finding new customer segments instead? Maybe for you, it’s about starting a significant community platform this year, and everything else can just keep ticking along?
Once you’ve decided, there’s then the equal challenge of leading the change through your organisation. Every idea (automation, branding, content, channel, sales support etc etc) will have its advocates in your company. You need to hold on to the logic for why you’ve chosen A, not B, and try to get that adopted through the company so that everyone is working to the same goals. The strategy is just the start of the process…
It’s easy to forget, amongst the talk of marketing automation, social media strategy, customer experience, lead nurturing and so on, that you still need well written, well targeted and well designed ads to reach new customers.
I spotted a great example this week, and just wanted to run through what I thought was great about it.
Channel, Placement and the Ad
Here’s the initial ad that I spotted:
What’s so great about this?
Platform – I see it on my mobile phone. Outside work I spend far more time on my phone than on a laptop, it’s a B2C offering, so mobile is best.
Channel – you can’t quite see from this, but the ad is on Facebook. Personally I view Twitter and LinkedIn as “work-related” networks and Facebook as a “non-work” platform. There’s some overlap, but little. So an ad which is targeted at me as a parent makes a lot more sense on Facebook.
Targeting – well, I’m guessing here, this could be great targeting, or they could have advertised to everyone in the world (at great expense!). But, the ad is for a product for people with children of a certain age (8-18). I’m a 44 year old male, I doubt they know I have kids, but it wouldn’t take much research to figure out the probability that I do, and that they would be of a relevant age (I’m less likely to have an 8+ child if I was 25 or 65). Of course, if Facebook is really clever, it knows that I do have kids (from my posts), and have sold that information to GoHenry. Like most advanced analytics/AI – creepy, but impressive.
The hook – “Kids age 8-18? Discover a safe, easy and fun new way to pay pocket money and teach kids about money”. What a great line! First they’ve identified me with the kids and ages. Second, they know the pain of paying pocket money in a world where most money is digital (finding change each week is a pain!). And they know most parents are paranoid about their kids attitude to money (that in reality it doesn’t grow on trees).
The graphic – you can’t see it above, but the ad cycles through a list of names on the credit card, showing how you can personalise the card for your kids – something I know they’d love. NB: What would have been genius, was if they’d known my childrens’ names (from Facebook) and inserted those in to the ad – how impressive would that have been? True personalisation.
Call to Action – “Sign up in one minute”. Simple, clear, pain-free.
The Landing Page
Okay, so you’re convinced by the ad, so you click on the picture.
The landing page – it’s a big page, so click on the link to view, but it has the following elements in order, that are done well:
Call to Action – right at the top. And it’s made so simple for you – Sign Up Now, to create a new Custom Card for your child.
Validation – right under the CTA (and indeed all over the ad and landing page) is the Visa sign. This immediately lets you know that this is a safe financial institution, that you’re not putting your money in the hands of some start-up. “Designed for children in collaboration with Visa” – so you know they worked with Visa to get it right and are big enough to work with a premium partner.
Short video – the video says “Under 1 minute” so you know you’re not going to have to spend ages learning about the system. No-one has time for anything over a minute nowadays!
Free trial – straight under this: “Try if free for 2 months”. Great, so if you’re not sure about this whole thing you can try it for 2 months, see if it’s right then stop if it’s not for you. Again, they’re removing a barrier to trial. One thing worth noting – you can see that their measure is to “Get trials”, to get people to sign up in some way.
Validation from a real user – under this is a quote from a real person. I personally don’t trust these a great deal (anyone can get a quote for any product – it might be that 1 person loves it, and 1,000 hate it!). But still – it helps you think that there are already people happily using it – important when you’re talking about a financial product that needs trust.
Benefits, and emotional appeal – after a few more logos, there’s then a nice section which describes how the thing actually works and describes the benefits in nice clear language. Reading this, I know, in a matter of seconds, how it will work and what immediate benefits I’ll get. And there’s a nice emotional pull on “Buy this if you want your kids to grow up as financially responsible people”!:
Further details – there’s then another section, more detailed explaining the features and benefits of the product. What I like here, over the whole page is that there’s a gradual increase in information as you become more interested. At the top you just want to know “What is this thing?”. But if you’ve read further down, chances are you’re more interested (else why would you be there?), and you want more detailed info about what it actually is. This worked really well for me.
There’s then a ton more sections – about security, how it works in practice, about the mobile apps, about good financial habits and so on. All good stuff, though I couldn’t help feeling exhausted about half way through.
Still, I thought this a great example of the art of a good advert – an art that isn’t dead yet! A well targeted app, from a company that understands their customer, simple CTAs, good validation, clear explanation of benefits, emotional appeal and so on.
This post is split in two, primarily because I hit a roadblock half-way through the work – and I wanted to get the first part out. Second part to follow once I’ve fixed the difficult problems!
A lot of people follow the Twitter feeds for competitors or, of course, themselves. But, one of the things I’m sure you’d like to know is – are the tweets for any given company generally favourable or not? Does the company’s Twitter community love or hate the competitors? Or you!?
I’m going to try and find out. The process of investigating this problem was arduous, so below is the summary of the things that actually worked. I have a machine-learning background, but have done very little on natural language processing. There were a lot of dead-ends before I got here..
In summary, there are some standard techniques for doing something called “Sentiment analysis” for sets of textual data. I.e. if you have, say, 1,000 pieces of text written for something – a book, a film, in this case – a company – are they largely positive or negative?
Obviously I’m not inventing the methodology here, but stealing from various sources. Or rather “building on others’ work” (full acknowledgements below – I really am just using the hard work of others). Here are the steps I went through if you want to try this at home:
Bought the book Web Data Mining by Bing Lau. I can’t remember who recommended it, but chapter 11 of this tomb, “Opinion Mining” is a nice overview of what we’re trying to do here, and the steps you need to take.
From this, I learnt that step 1 is a natural language parsing technique known as part-of-speech (POS) tagging. For something like sentiment analysis, the algorithm has to have some understanding of the structure in a sentence, i.e. what are the different parts of speech therein – what’s a Verb, an Adverb, a Noun and so on. This is needed because adverbs and adjectives are particularly useful for sentiment analysis (e.g. “great film!”).
So far, so good. But there’s a snag – Twitter is notorious for abbreviations, emoticons and so on. How does a standard POS tagger pick up LOL and ? As you’ll see below, this was the main issue that stopped this being an almost trivial exercise.
During the course of my investigation in to this problem, Google found me a group that have, essentially, produced a complete solution to (almost) all of the sentiment analysis problem that I face. I almost feared this, as I was rather looking forward to piecing the problem together step-by-step. However, the Natural Language Processing group at Stanford have produced the Stanford Core NLP library* which basically does everything from tokenising, to POS tagging to sentiment analysis. And there’s a .NET version of this which is very impressive. Thank you so much for the port Sergey Tihon and of course the whole team at Stanford.
There’s a great bit of example code that comes with the library (available via NuGet), that lets you test out different parts of the process. To carry out sentiment analysis is a series of steps – first you have to tokenise the sentence/tweet – not always trivial for Twitter – then you have to POS tag as described above to identify the different parts of speech. Then of course you have to carry out the sentiment analysis. The example below shows why this library (and technique) is so powerful. If we carry out sentiment analysis on the short sentence “this isn’t good”, we get the following output:
Sentence #1 (4 tokens, sentiment: Negative):
This isn't good
[Text=this SentimentClass=Neutral]
[Text=is SentimentClass=Neutral]
[Text=n't SentimentClass=Neutral]
[Text=good SentimentClass=Positive]
Obviously the clever thing here (apart from the tokenisation which doesn’t just treat “isn’t” as one word), is the way in which the algorithm can’t determine that the word “good” is positive, but that the sentence is negative overall – as mentioned above, you need to see words in the context around them and the algorithm is smart enough to know that the “not” that is part of “isn’t” negates the positive word “good” that follows it, to make the overall sentence negative – very clever.
So, what’s going on here? It’s fine and easy to take someone else’s code and run it on your data – but one of things I’ve learnt for machine learning is that you have to understand what’s going on. There are no perfect algorithms for all scenarios – are these showing the right results for my data? Are they interpreting the (weird, shortened) English that is Twitter? What happens to non-English tweets (well I know that – it doesn’t work). And are tweets for companies different to the LOLZ and other phrases used more generally for Twitter?
We’ll use an example to illustrate the first big problem that I hit. I tried out a number of tweets gathered for a given company and spotted something untoward going on – that a number of tweets didn’t seem to be getting categorised in a way I expected. As an illustration, I used the following real tweet (company names and hashtags changed):
company3: Half way through a great panel session with #Company1 and @Company2 @ #LaunchEvent launch event http://test.co/test
Now for me, this is a pretty positive tweet. But running it through the vanilla models used in the Stanford NLP module, it gets a rating of 1, where:
0 = Very Negative
1 = Negative
2 = Neutral
3 = Positive
4 = Very Positive
Perhaps at worst, this tweet might be misclassified as neutral, but “Negative” seems plain wrong. Also note, this is a statistical process – I know and expect a number of misclassifications, it’s part of the game – but this seems like quite a simple example.
So I tried some variation on this tweet to see what other scores I got – in an attempt to find the cause of the problem. Here are the results:
company3: Half way through a great panel session with #Company1 and @Company2 @ #LaunchEvent launch event http://test.co/test - score of 1
company3: Half way through a great panel session with Company1 and Company2 launch event - score of 3
company3: Half way through a great panel session with #Company1 and @Company2 @ #LaunchEvent launch event - score of 3
Looking at these examples it certainly implies that the algorithm is being thrown by the URL at the end – the @ and # symbols aren’t causing problems (in this specific case), but the URL is.
So, hypothesis 1 – it’s just the URLs that are causing the problem. The next step was to try simply removing the URLs from tweets (with a bit of regex), and running with what was left. However, trying this new approach on a number of other tweets shows that this doesn’t seem to be the problem. For example, the following should really be classified as neutral at worst:
FirstName: RT @Company1: Free eBook: 50 Web Performance Tips for Developers (from @Company2) http://test.com/test - score of 1
What seems to be going on here? Hypothesis 2 – it seems like there’s a problem rooted in the POS-tagging for the tweet. Looking at the tags assigned:
There definitely seems to be an issue where many of the elements of tweets – URLs, hashtags, user IDs – aren’t being picked up and are instead just being classified as regular nouns (NN).
So my next port of call – is there a POS tagger which uses more Twitter specific tags, for example for URLs, hashtags and so on? Yes – I found the following from the University of Sheffield – https://gate.ac.uk/wiki/twitter-postagger.html ‡. This provides a pre-trained model that can plug in to StanfordCoreNLP, and will pick up the elements of tweets, not found in the example above. Using this model instead, on the very same sentence above yields:
As can be seen, this is tagging elements more appropriately – USR for users, URL for URLs and so on. Seems great. However, if we again look at the classification…
FirstName: RT @Company1: Free eBook: 50 Web Performance Tips for Developers (from @Company2) http://test.com/test - score of 1
Sigh.
So, I’m going to pause there. I’ve understood the problem a little – tokenisation, followed by POS tagging, followed by sentiment analysis – I’ve found a standard framework – the StanfordCoreNLP codebase – which is incredible, and a better Twitter POS tagger.
However, my results still aren’t quite there. Running this algorithm for an example company (for which I have 10,000+ tweets), I find that positive tweets are clearly and, generally picked up. The struggle is distinguishing between neutral and negative tweets – far too many neutral tweets are being categorised as negative. This could be a number of things – many of these tweets are, by nature, very neutral and specific to B2B companies. Is this the mis-application. Of a generic model to a specific data set? Do I need to create my own model for “Company tweets”? How do I protect from over-fitting, how can I add to the great work already done? To be continued…
* Manning, Christopher D., Mihai Surdeanu, John Bauer, Jenny Finkel, Steven J. Bethard, and David McClosky. 2014. The Stanford CoreNLP Natural Language Processing Toolkit In Proceedings of the 52nd Annual Meeting of the Association for Computational Linguistics: System Demonstrations, pp. 55-60. [pdf] [bib]
‡ L. Derczynski, A. Ritter, S. Clarke, and K. Bontcheva. 2013. “Twitter Part-of-Speech Tagging for All: Overcoming Sparse and Noisy Data”. In Proceedings of the International Conference on Recent Advances in Natural Language Processing, ACL.
This feels like a pointless blog post – the think I’m going to say seems so obvious, I shouldn’t need to say it. Still, I see examples where this doesn’t happen, so perhaps it’s worth re-iterating the point.
Here’s the incredible insight – if you want people to read content that you write, then it has to be genuinely interesting or useful for them. Erm, that’s it.
Standard marketing practice is to find customers, acquire them and retain them – not complicated (extremely difficult! But not complicated). Inbound marketing turns the first of these on its head – you help customers to find you; then you acquire and retain them. And the main point I want to make here is that for any of this to work, the content you create has to be something people actually want to read, comment on and share. I don’t know why this point needs to be made but, as I say, I see examples all the time of content created which ticks the boxes for the marketing department (it’s about our products, tick!), but which no-one in their right mind would ever actually be interested in.
There are 1000s of books, articles and blogs on inbound marketing – about being non-interruptive, matching the customers’ journey (rather than forcing them down an artificial journey of your own making), the importance of SEO, of remarkable content and so on. For a great primer, I’d strongly recommend HubSpot’s book Inbound Marketing: Attract, Engage, and Delight Customers Online (and more on them later).
But the model is simplicity itself – whether you’re B2B, B2C, appealing to Gen X, Y or Z – customers today don’t like being interrupted. As a marketer you need to gain their permission to interact with them. How do you do that? By creating things (blog posts, videos, webinars etc) that they genuinely find interesting. If people find it interesting, they’ll share it on social media, comment on it, link to it from their own sites. This leads to Google rating it – and your domain – highly in search results for a given topic. People then find it (for free, not via Adwords), and because the content is strongly associated with your brand, customers find out about you, see you as a thought leader, trust you and give you permission to tell them about your products.
As I say, simple (just not easy). But at the heart of the model is the need for content customers genuinely want to read or view. Otherwise the whole model breaks down – the content isn’t actually read, it isn’t shared, no-one comments on it, and all that work just gets lost amongst the billions of other web pages out there. The worst culprits are thinly-disguised adverts for products. If, for example, a product’s unique proposition is that it works in a certain way, then endless articles about how you, the customer really have to work that way – may seem clever (“It’s not about our product really, it’s advice on how we think you should work! Honest!”), but the customers can generally see right through it. It’s hard to give concrete examples, without naming and shaming companies, but just this week I read an article from a company about how their very specific methodology for implementing software development practices was obviously the one and only way of working. So blatant!
And yes, this gets a tick for being relevant to your company, and the marketing team are happy because they’ve done their job of producing some content about their product, which isn’t just a glossy advert.
But who would share this article? With their friends and colleagues? “Look Twitter followers, can I share with you a blatant advert for someone’s product?”. I’ve almost never seen this happen in the real world. Why not? Well I don’t know about you but I find it slightly embarrassing sharing what is, clearly, just company marketing with people I know. Of course as marketing folk we’d love this to happen, but it’s not realistic.
What people share is content that’s genuinely useful or interesting. NB: It has to be in your domain – I could post an article about Radiohead’s new album coming out this summer. Might get a few readers, but they’re not the same people who are likely to want the software produced by my company.
The masters of this, IMHO, are HubSpot. Look at their marketing blog – http://blog.hubspot.com/marketing. As the headline states – “Where Marketers Go To Grow”. And the articles are exactly that – if you work in marketing they repeatedly write content which I find genuinely interesting and useful. Things that help me do my job better. And I share them with colleagues at work, because I think they might find them useful too. Sometimes I share them on Twitter or LinkedIn. Why on Earth would I do that? It’s certainly not because of some allegiance to them or because I want to promote them – why would I do that? Weird. I do it despite the fact that it comes from a corporation, because of the quality of insight. And obviously because all their articles are about sales and marketing – and sales/marketing software is what they produce – then the impression that HubSpot “Know what they’re talking about” only grows in my mind. And when we came to look at marketing automation software – HubSpot was right up there at the top of our list.
And this is what you have to produce too. Stop thinking about flogging your product and start thinking about what people want to read in your domain. If you sell bathroom tiles, what about some articles showing off inspirational ideas for your bathroom from top designers? You can imagine someone sharing this with their other half, “What about this as an idea for us?”. If you’re a taxi service, articles about getting around big cities for new visitors? Shared as “I found this about transport in Detroit, let’s use it for our trip next week”. If you make machine-learning software for banks, how about some simple how-to articles on current methodologies, that a potential customer can share with her boss to explain all the clever stuff she’s working on?
I don’t think it’s complicated – something in your domain that people actually want to read. Sure, you then need to make sure this leads to opportunities for your business, and that takes a little faith and measurement. But it’s all based on a foundation of great content – without that you’re just doing traditional advertising in a different format.
Customer Experience (CX) – it’s a popular topic right now, analogous to the importance of User Experience (UX) in the world of product development. And something which I strongly believe is important for a marketing team to get right. So, we all know that getting your Customer Experience great and consistent is important for all of your customers’ touch points but – how on Earth do you measure if it’s working or not? Was it worth the effort?
There’s a great piece I read here recently about the issue of “end-to-end” funnels – basically give up on the idea of a linear funnel where a customer moves through the buyer process from “Awareness” to “Discovery” to “Validation” to “Retention”, measurable through cohort analysis and conversion rates. The reality is that customers interact with your brand in multiple, unstructured, unordered ways at the end of which (hopefully!) they buy your product (aka the “Dark Funnel”). If someone is buying a car how did they end up at that decision? Sure they might have visited VW’s website, but they might also have asked friends, gone on to review sites, read a motoring magazine, asked a question on Twitter, spoken to the sales reps in the showrooms, researched forums – all in a semi-random order, unpredictable and – key – very hard to measure.
I really agree with this – and the suggestion I take from this is: stop worrying about measuring it all and just make great customer experiences. That’s enough – if you’ve made your website great, your social media channels interactive and high quality, your support is top-notch, you respond quickly on forums, you’re friendly and positive at events etc, then belief is enough to justify this “investment”.
But, is that enough – is there any way of measuring the impact of your work? Net Promoter Score (NPS) is one possibility – and it is the sort of thing that can be measured. But from a PDCA perspective (where we’re trying to measure the impact of our work and adjust accordingly), it’s very slow, and let’s be honest, optimistic to think that you’re going to be able to separate out the impact of your marketing work in an NPS score from everything else. What if your company has just released a ton of great product to the market at the same time – what had the impact on NPS? It feels unsatisfactory.
So we need something more immediate. The best I could come up with, and the thing I’m going to try, is “Mystery Shoppers”. It seems obvious but in the world of User Experience what do we do to test the usability of our products? We ask users to try the product out – simple. So why not do the same for your CX? Get five people, at regular intervals to pretend they have a need related to your products – and to go through all the necessary interactions with your brand to buy something. From first Google search, to some forum interaction, maybe a question on Twitter, download a whitepaper (and try to understand it!), follow your Facebook page, phone up support, try to use the product, try to buy it, get follow-on help and so on.
And you could have different types – someone acting as an end-user vs. a corporate buyer. Someone who is totally self-service/won’t speak to anyone vs. someone who wants to sort everything out on the phone. An expert vs. a newbie. A difficult so-and-so vs. a “happy path” customer.
Then of course you can get both qualitative and quantitative data from those people about their “Customer Experiences” – put the numbers on a chart and use PDCA process to see where the problems are (“We’re great if you get us on the phone, but self-service customers are really struggling” or “They’re great once they’re using the product, but it was a mess up to that point”). And you can use the qualitative feedback to know how to act. If a mystery shopper says “I just couldn’t understand from your site what your product actually does“, then may be better explanation? Or better still, a video?
It shouldn’t cost much to implement and the feedback should be invaluable – as long as you then act on it! NB: It’s also important to get people disassociated from your company. Just asking the people in your team, or a regular customer who has loved you for years isn’t enough. You want people who’ve barely heard of you, or haven’t interacted with you for years – proper, independent input is the most valuable, and what you should be seeking.
This weekend we went to Southwold and Aldeburgh – two of my favourite places in the UK, for various reasons. One of these reasons is the Adnams Brewery, based in Southwold. It’s been going for over a century and has always produced wonderful beer (as well as other drinks).
But a few years ago I noticed a new range of beers in the shop. It’s a new brand – “Jack Brand” in fact, and includes 4 or 5 beers, all of which I can happily say are really interesting, new beers. They are to an extent riding the wave of “Craft beers” of various sorts, the beers are often quite hoppy and will appeal to customers who like that sort of thing (including me), but that’s not quite the point.
The thing that’s most impressive is that a company working in what is generally perceived to be quite a staid industry has managed to do some interesting commercial innovation. And they’re a small company too, I doubt they have enormous research departments to look in to this sort of thing.
They’ve innovated in terms of the product (they’re not just re-labelling something else, but have come up with new, different tastes) and the brand. I also like the names of the beers (e.g. the one pictured – “Innovation IPA”!).
And I’m pretty sure it’s been very successful – I’ve seen the beer in a lot of pubs in Cambridge and it seems to be doing well.
So, if a brewery can do it, why can’t you? If they’ve managed to get their marketing team and their brewers together and come up with something this successful, what’s stopping you from doing the same? Of course there are 10s of thousands of articles and books on how to get the innovation process going, how to manage it in a standardised way and so on. But I’m not sure it’s that complicated – I’d be surprised to learn that the small group of people at Adnams spent months instigating a complex innovation process at the office.
So the question is, what’s stopping you re-creating something like this in your business? A new representation of an existing product? A new, innovating way of using your product a different way? A new pricing system (monthly payments, daily even, free for non-commercial etc etc!?)? A radically cheaper, stripped down version for a different market? Or a much more expensive version with added services for a different market? Different brands for different groups of customers? Combinations of your products for different people?
And the list goes on – many of these innovations are easy to implement, but they’re often not easy to make happen, particularly in larger organisations.
And maybe that’s why Adnams managed to do this so easily – they’re a small company, presumably with little red tape and a culture where these things can happen without too much pain. What can you do at your org to foster this sort of activity? Do you block new ideas or nurture them? What can you do to help?
We went to Milton Keynes today (school holidays – where else would you want to go?) and there were two examples of what I’d call, using marketing jargon, “A great customer experience” for the children. Listening to them talk about it afterwards, it wasn’t just something to do with the actual places we went to, and what we did. Most of what they raved about was the people who worked at these places and how friendly they were. So their experiences were far more memorable for the companies’ employees, than their products.
The first was a place called Jump in, a trampoline extravaganza, and the second was the Lego Store. Now both places are great – well, for the kids at least. The first has a room full of trampolines, trampolines on the wall, basketball trampolines, dodge ball – with trampolines – and so on. Obviously I didn’t go on, but the children had a wild time. When I asked them about it afterwards, they did of course say what they did and what they played on. But very quickly they started talking about the people who worked there. They knew their names, and were relating how they pulled funny faces, interacted really well with everyone, obviously were enjoying themselves too and so on. It made what was, a 1 hour distraction, in to something really funny for them to take away.
And then there is the Lego store. Of course you know what you’re getting here – the best product ever put on this Earth, and every version of that product in the same place. It’s only the mega-prices stopping me from buying everything supermarket-sweep style. But again, once we’d left, there were two things the children mentioned unprompted. Firstly, the guy who worked there, who went round the back and felt all the “Minifigure collection” packets to find the two specific characters that they wanted (he had a technique which he explained). And secondly, the friendly lady at the till who chatted to one of them about the minifigures he’d made up himself. Both had gone beyond the call of duty, and the first in particular was great. I’m not sure he’s supposed to do this (Lego go out of their way to make sure the collection packets are indistinguishable), but what great customer service – and again what a great “Experience” of Lego that has nothing to do with the actual product.
I thought of this, because when looking at your own customer experiences, for your company, it’s easy to focus on the easy things to fix. Things like the branding, whether there are relevant sharing buttons, if the wording on the website is upbeat and friendly. But the harder things – such as whether your support and sales people go out of their way to help; whether your event booth people are still going strong even after four days of standing; whether your interviewers for job openings do a fantastic job making applicants feel at ease – all these things are much harder to fix. The issue is, these are the things that people remember – the things that people “take away” as their experiences of your company. Of course it also extends to things like Twitter – who at your company reacts to a customer complaint on Twitter – is he/she your most friendly and smart person who knows how to turn something like that around?
As I say, I think these are things that really have an impact on customers – and they take training, great recruitment, strong monitoring and a great company culture to make sure these works. So well done to both Bounce and Lego – you made an okay day in to a great day for the children, and we promise to be back soon!
“You could boil all of Search [the book, “In Search of Excellence”] down to three words: People. Customers. Action.”
You read further and then find that Peters actually wrote a piece years later undermining the need for a business strategy at all! Controversial when you work for a strategy consultancy, but ho hum. What he was really saying with that succinct phrase was “Get great people motivated to succeed, keep close to your customers, and get on with it! (i.e. a bias to action)”. Sure you might have a great business strategy, an okay business strategy, or no strategy at all – but that’s less important than having a motivated work force, knowing your customer and actually doing something.
A lot of later literature on company performance has evolved from some of these principles that Peters and Waterman professed. For example, Jim Collins’ “Good to Great” is an obvious descendant. And the now well-known quote that “Culture Trumps Strategy, Every Time” is rooted in this perspective.
And it’s a perspective I love – there’s a real danger with modern businesses to think that the culture of your organisation is just some dull fluff stuff to do with foosball, free cokes and not having to wear a tie. But it’s not – the way people work, the way they like to work together, the behaviours that are encouraged or discouraged, whether the right people get promoted or demoted, the interview selection criteria, the management structures and goals – all this is, for me, even more important than the specific strategy plan you happen to be following this year. If you can get your people aligned with that strategy, then the multiplicative effect of that can be enormous. If you ignore your people, then your strategy will come to nought.
A nice analogy was given to me a year or so ago about these elements of organisational effectiveness. Your company performance is a like putting on a play. You have:
Your Environment: where your theatre is based. There’s little you can do about this, though you need to keep an eye on what’s going on in your neighbourhood, and adjust accordingly.
Your Business Strategy: the script. This is what you’re actually doing, working on.
Your Capability: the actors who are delivering the play.
The point is – you can have the best script in the world, but if your players suck, or aren’t motivated towards excellence, the play is going to suck either way. But of course it’s not just about the players sucking, it’s actually about their motivation to make the play great – yes, they need the skills, but do they form part of a trusted team? Are they given the appropriate autonomy? Do they have clear goals? In essence, are they supported by the organisation, or held back?
It’s this sort of question that you need to look at if you feel that your strategy isn’t quite going as swimmingly as you thought. Maybe it’s not the strategy, maybe it’s the support structure for your people and the culture you’ve created? Or maybe you drifted too far from your customers? Perhaps you’ve been blocked organisationally so that you couldn’t get on with your work? (On the last of these: there’s one thing I can guarantee – if you don’t do a piece of work, then you certainly won’t have any impact!)
Machine Learning (ML) and AI are big topics right now. Poor Lee Se-dol has just been beaten by AlphaGo – a machine put together by Google/DeepMind and there are numerous other examples in the news.So everyone is interested, and everyone wants to do more of it. Whether you work in marketing or any other discipline, there’s an expectation to be harnessing the power of ML and AI algorithms to provide insight, models and intelligence to applications.
So, what’s holding us back? Is it the tech – it’s too expensive or not available? I don’t think it’s this at all. It’s been possible to implement ML for decades. You can use R, MATLAB, SPSS, SAS or a ton of other tools or if not those, Excel or even write your own (I have my own Mickey Mouse clustering app here as I got so frustrated using others’ tools). And people like Microsoft are making the tech more accessible all the time (e.g. Azure Machine Learning). So I don’t think that’s the problem.
My opinion is that the biggest shortage is in people who really understand ML, and can use it properly. And this is certainly what I’ve seen at customers and companies we’ve spoken to about this problem – they know they want to do it, but they just can’t get the people! Where are these mythical data scientists? Do they even exist? Could we afford them, even if they did? These are the questions we hear.
The key issue here is that, with ML, a little knowledge can be a dangerous thing. One of the problems with most ML algorithms is that they are complicated. Or at least, you need a significant level of understanding to know what you’re actually doing. If you take a dataset and run a Support Vector Machine over those data points in an attempt at classification, do you really know what the output means? When it gives an unexpected outcome, do you know why? Without jumping to easy (but often wrong) conclusions? Even something easier like k-means clustering – what do those clusters really mean? If there are three clusters, one big and two small, is that really saying something about the fundamental nature of your dataset, or is it just an anomaly because you haven’t transformed your data correctly beforehand?
These are difficult questions – having the tool available to, say, run a k-means clustering algorithm, is only 10% of the battle. Knowing what to do with that tool is the real issue; and how not to present something to your boss that any smart cookie could undermine in 10 minutes.
So finding these people is hard. It’s made even harder because I’ve often seen over-inflation with what people mean by “Machine Learning”. In my experience, someone who claims to “Know statistics”, is likely to be comfortable with value/volumes, perhaps a “mean” or a “standard deviation”, but not much more. Those who say they “Understand ML”, often have a good grasp of statistics, but struggle, when things get tough with machine learning. And of course, if you claim to “Know AI” – understanding a Support Vector Machine doesn’t mean you can build the next Skynet!*
So it’s even tougher finding people who really know their stuff. Maybe it’s just about money – supply and demand. If these people are hard to get, and you’re competing with the City to get them, then maybe you just have to pay the asking price and that’s it.
Or of course you can pick up a book and start learning! There are lots available – my favourite is Machine Learning and Pattern Recognition by Chris Bishop. A bit older now, there’s a lot in there, and you still need to implement this stuff, but it presents the material in a clear way and, most importantly, it helps you understand what you’re really doing with these algorithms. So at least your conclusions will be based on a deep insight, and not on guesses based on pretty looking graphs..
* I also have a “Skynet” project in GitHub. Progress is slow.
There’s a great scene, towards the end of the film American Sniper, where Bradley Cooper’s character has to take a shot from over a mile away from his target.
But the point is, there’s a long time between the point he takes his shot, and when he finds out if he has hit or not. It’s not like shooting a pistol from 20 yards – you have to wait to see the results of your efforts.
One of the authors who has been influential at the place I work is Jim Collins – in his book Great by Choice, written with Morten Hansen, he describes how you should “Shoot bullets before cannonballs”. What he means by this, is that in a world of uncertainty, full of assumptions, you need to test your ideas [with the market] with small bullets first (i.e. small investments of resource). Wait to see what hits, then go in with your cannonballs when you know what will work (rather than wasting cannonballs early on).
This is a great idea of course – why start a team of 100 people on a project when you don’t know if it’s a good idea or not?
And this is great, when you’re running a startup using a SaaS model and the Lean Startup principles – promote an offering on your site on Monday, check the feedback metrics Tuesday to Wednesday and pivot to a new proposition by Friday, if it’s not working out.
But the issue is that, in my experience in the world of B2B, that feedback mechanism takes more than a week to work. Hopefully you have a great Agile team, producing a minimum viable product as soon as possible, getting early ideas out to customers quickly. And you’re doing everything you can to get qualitative and quantitative insight from those customers. But is this enough information to make a pivot? Do you really know if your bullet has hit home or not just yet? There are a few issues that make this process slower than we’d all like:
As mentioned, the speed to get a first version out. The principles of Lean Startup are that you shouldn’t wait to have a fully working version before trying with customers. But I just don’t think you can get accurate, actionable feedback for an idea based on sketches on the back of a napkin. Particularly if you take in to account the points below.
Numbers – we’re not making changes to Facebook here. Each new idea isn’t getting seen by 5 billion users. If you have billions or even millions of users, then it only takes a tiny percentage to react to your new offering to get statistically significant data on what you should do next. But what if you only have thousands of customers? Or hundreds? Most of these people have day jobs and won’t have time to tell you whether your new idea for an “Automated Dog Grooming Service” (I heard this a few weeks back) is a good one or not.
Money – the true test. Someone looking at your sketch and saying “Yeah, looks pretty good” does not a sound, profitable business make If you want to test if people really like your idea (i.e. they’re willing to give you dollars for it), then you need to start selling it. And that involves sales cycles, proof-of-concepts, purchasing processes and so on. Particularly of course if you’re selling for more than $10 per month. If you want to test whether your $100,000 proposition is a winner or not, you’re not going to find that out in a week.
So these things mean you have to wait for more than a few days to see if your bullets are hitting their targets, before you load up the big guns.
But this is a problem – the issue is: when do I know if my bullets have missed? I started the project months ago (fired the first volley – not sure how long this analogy will last…), and I still don’t know if I’m shooting in the right direction or not? What do I do? Change target now? Wait and see? What if it takes 6 months, a year even before I know if the idea is good? Do I just carry on regardless?
This is a real problem – kill a project too early, and you could be clutching defeat from the jaws of victory. Keep it going unnecessarily and you’re just burning money (and teams, that could be used elsewhere for more profitable gains). But how do you decide, when the evidence isn’t in yet?
I think there’s a few things you can do in fact:
Good ol’ fashioned product management. Is there a market for this product? People paying money for similar services? Who’s the competition? I love this tweet: https://twitter.com/justinkan/status/614904706624720896 – there’s basic work to be done showing that there’s a market for your service, people are willing to pay for that service, that the incumbent isn’t unmoveable and so on. If you have confidence you’re addressing an existing market, with a better product, in a environment where you have reach and brand recognition, you should have confidence of success that can take you through the low points.
Being honest about the feedback you are getting. With a new idea I, personally, think that unless people are chewing your arm off to get something (“This is magic!”, “How did I survive without this!?”, “Please can I give you some money for this?”) then you need to be pretty cautious and honest with the feedback you are getting. Often we know a set of close customers really well, and this is great, but those close relationships can make it hard for said customers to tell you the truth about your new idea. You present something to them, you can’t help but convey your sparkly-eyed enthusiasm for this new miracle of software that you’ve created, and few people have the heart to tell you what a piece of crap it is. So despite the issues outlined before, you do need to be taking your idea to as many people as possible as early as possible. But more than that, you need to listen to them, encourage “constructive” criticism, and when 19 out of 20 people respond with “Meh”, hear that, and think about drowning your puppy.
Hedge, intelligently. Have a fallback, be thinking about alternatives, alternate uses for the technology and so on. If you do get to, say, 6 months in to your project, and are beginning to have serious doubts, this shouldn’t be the first time you’ve thought about a bad outcome. Really you should have been considering the bad outcomes from day 1. I like to think of this as “Schrödinger’s Cat Thinking” – you don’t know, on day 1, whether the cat is alive or not, but you should be thinking about what you do in either circumstance. Perhaps there’s a way of developing the product so that it can be easily switched to another market? Or sold off to someone if it doesn’t fit with your business? If you’re a sniper, waiting for your shot to hit home, you should have a plan of what do do next, regardless of the outcome [by the way, I know literally nothing about such military affairs, so I have no idea if this is the case or not – but it seems reasonable]. In essence, if you decide to pull the plug, you should be ready to go with “What next?”, not sitting there shrugging.
But the reality is that, even if you take these things in to account, you’re likely to have a long period in limbo, not sure whether you’re on to a winner or not, not sure whether to kill the project or not.
And this is where leadership comes in. What effect would it have to go to a team and say “Well, things are looking okay – I’m not sure, but there’s a chance we might kill your project at some undefined point in the future. Still, off you go – make progress!”? All you’re doing here is undermining that team, leaving them in a state of uncertainty, likely to seriously damage productivity.
Instead that team needs your support and backing. And they need to hear it from you. Yes, you may be only be 60-70% sure that what you’re doing is going to pan out, but internalising that uncertainty is part of your role – it doesn’t help to transmit your worries to everyone around you. So if you have a 6 month period where the project is in the balance, better to assume that project will succeed – and push it hard – than to dither and create a self-fulfilling prophecy of failure..
A place I used to work, perhaps 10-12 years ago, had (what I think, now) was a strange custom. Every Monday morning the whole company would get together to go through everything. There were around 70 of us, at the peak, and we would all stand around from about one-and-a-half hours going through sales, marketing, development, ops, specific projects and so on. This was tiresome, to say the least. I had this slight sense of dread each Monday morning as 10am loomed, and we all started shuffling to the space “around the boss’s desk” (difficult with 70 of you..).
Anyway, thinking back, the main points I remember from these meetings were:
There were pastries every time – and you had to position yourself well, to get the “good ones”. Other than the specific point I make later, this is almost the only thing I remember from, probably, 100-150 hours of my life.
The reviews from sales consisted of trying to sell (to us), why the latest lead was inevitably going to lead to untold riches. When this didn’t happen (months later), rather than updating us on “I’m afraid that dead cert didn’t cross the line”, instead these deals were conveniently forgotten. After a year, you begin to get cynical..
Development – every week the same: “We’ve done an extra week of work on product X. Nothing really to show”.
Ops – incredibly, almost every week, the update from ops wasn’t about servers, our technical infrastructure etc, but almost always seemed to be about desks and chairs – that we were getting new ones, that we were re-arranging the current ones to suit new starters, that we’d “had a rethink about the larger desks” and so on. An extraordinary waste of time.
So we’d endure these sessions every Monday morning – it filled the time until lunch – at the end of each session would be the CEO’s rousing finale, where he’d fire up the troops ready for the week ahead. This generally wasn’t great and, to be fair, how do you come up with something new week in week out? Particularly in quite a slow moving business where not a whole lot happened each week? “Go dev team, continuing to fix that next tranche of indecipherable bugs!!”.
But, there was one speech which I do remember, and still remember to this day. We’d been going through a tough period with our investors, questioning our progress, our organisation, our management (how dare they, with their millions of dollars sunk in to us ), and a lot of people in the company, who’d been trying to make progress on product, marketing and sales, had had to spend a lot of time dealing with requests for information from these people. We knew we had to do it, but still. We’d also had some issues with journalists, and analysts too, not quite seeing our way on things – whether they were right or wrong, again, it’s an exhausting process, trying to keep these groups happy when you have a day job to get right.
And it was at one of these Monday morning meetings that the boss stood up and gave a 20 minute oration on the topic of “Better to be in the arena fighting, than in the stands criticising and judging”. This is a relatively well known topic, and subject of such speeches, but it was such an impassioned 20 minutes, painting a picture of us in the company, fighting lions and gladiators (he had a background in the classics) whilst the petty and ill-informed outside world looked on, passing judgement without understanding the problems we faced (fighting lions!), that for once, it did genuinely rouse the company, and left us all leaving that meeting with just a bit more energy for the week ahead.
There were, in fact, two things that I took away from this event:
The value of a good speech, particularly in terms of timing. Our boss knew exactly what the feeling was in the company at the time (that we were all trying really hard to do something, and were being ground down by external sceptics), captured that feeling and spoke about that topic, rather than something else. And, as I say, I think a background in Classics helps!
The subject itself – I strongly agree with the principle that, it’s better to be having a go at something, however well or badly, making mistakes, learning from those mistakes, trying new things, than to be on the sidelines, passing comment.
It’s why I’ve never been a fan of journalists or critics – far better to be a musician, putting out an average album, than a journalist critiquing that album. What positive contribution do you make!?
So, a great speech, given at the right time, with a point-of-view that I strongly support. I just wish I could remember something else from the 100s of hours spent standing around, chewing on Pret-a-Manager almond croissants (definitely one of the “good” pastries)…
What is the essential difference between “Management” and “Leadership”? Are these, basically the same thing – “The stuff you do when you get “Manager” in your job title somewhere? These are both such vague, all-encompassing terms (perhaps the worst job title for this is “General Manager” – it sounds like you “just do stuff” not even specific to a particular domain!) that it can be hard pin down any sort of definition of each. Also note, very few people have “Leader” in their job title, a lot of people have “Manager”. Why the difference?
Completely ignoring job titles, which just confuse the issue, I’ll argue that these are very different modes of operation. In essence, Management is about “Things”, and Leadership is about “People”. This is a mild overstatement, but the difference is important.
What does this mean? To understand this difference, it’s useful to think about some examples of the way the word “management” is used, outside the office – terms like “Pain management”, “Waste management”, “Estate management” and so on. All of these describe jobs that involve looking after processes, performance indicators, co-ordination of activities and so on. I.e. “Things”.
Leadership on the other hand is a very different job. Again, various descriptions such as “Taking people on a path they wouldn’t otherwise take” and so on, but these can be a little vague. The definition I like, from a course I did last year is “Vision, Team and Communication”. It’s about providing a clear vision of where you’re going, getting the right team together and communicating that vision well. I.e. it’s about inspiring and leading “People”.
And I think, therefore, that the skills needed are very different. Leadership isn’t about carefully managed processes and KPIs – measurement, recording, project management. That is all in the arena of “Management”. It’s about inspiring people to believe in what you’re doing, communicating clearly what the path is, and so on. You can be fantastic at managing projects, keeping on top of KPIs and so on, but wanting when it comes to inspiring the people around you. Similarly, you might be amazing at bringing your team along with you, and inspiring people – but absolutely hopeless at managing a project, and keeping on top of things.
I think this is why “Manager” in a job title can be unhelpful. It’s often used to denote someone who is being asked to do both activities – “Manage” everything that’s going on in a given domain in the strict sense, but also “Lead” a group of people. And these tasks are very different – with different skill sets. I’d even suggest these are quite different personality types – management is more attuned to the Introvert type, lovers of process, people who find satisfaction in making sure everything is “In hand” and under control. Leadership is perhaps more appropriate for an Extrovert type – someone who enjoys telling a story, working with people (rather than spreadsheets), talking.
But there’s an advantage here – and why I think so few have the word “Leader” in their job title. Management is, I think, quite a specific role – you need to assign people to these roles to make sure things get done. “Project Manager” is the classic version of this – a specific job needed to make sure projects are run properly (i.e. “Managed”!). But Leadership is something that can be done by anyone. You can have a new graduate come in, inspire the team with some incredible ideas for the future (“Vision”), help get the team coalesced and flying (“Team”) and is constantly re-telling the story of what’s happening internally and externally (“Communication”).
Unfortunately, many job titles are confusing. “Product Manager” is a classic example – though some of this job is about “Managing the product”, really a lot of it is about leadership – inspiring a team to work on your ideas and communicating internally and externally about what’s being done.
So it’s something worth thinking about – regardless of your job title, are you really doing a job of “Management” or “Leadership”? The former is relevant to many people (and the chances are, they do have “Manager” in their title somewhere). But I’d suggest the latter is appropriate for everyone.
Another slightly abstract post today, though based on very real and pragmatic problems. When working on a project, where there are 100s of different options for things you can do and you’re drifting in to option paralysis, often a manager will use a deadline (for example, an event, or a customer demo) as a way of forcing the team to make decisions and progress – aka “helping the team to focus” :-). But I’ll argue that you can go one step further, and just use completely arbitrary deadlines to help bring focus. Why wait for an event in the real world?
I’ve previously mentioned Good Strategy/Bad Strategy by Richard Rumelt – a great book on how to create meaningful and useful strategies. One of the core stories in the book is around the moon landings in the 60s: scientists were worried about how they could design a landing vehicle to land on a unknown surface that would survive. This was leading to paralysis where the teams couldn’t progress because there were just too many unknowns in the problem. So, what did the director do, to aid progress? She set what was, essentially, a completely arbitrary constraint, that the moon surface would look pretty much like a desert in the US. What the director was doing here was setting a completely arbitrary constraint – how could she know if the eventual lunar surface was anything like the surface of the desert? Couldn’t she just have been so wrong that all of the work was a waste of time? My view is that it doesn’t matter – what she gave the team was a way of moving forward, getting something done. Maybe it was a waste of time, but better to do something – and likely learn some things along the way – than just do nothing, paralysed by uncertainty.
There’s another more subtle theme that goes through this book as well – constraints over time. The concept of “proximate objectives” (i.e. setting a short-term objective) relies on a constraint in time – “We are going to achieve this thing in 6 months” (or a year, or whatever). Why 6 months? Why not 9 or 10? Why should your timescales be based on half of the time it takes for the Earth to orbit the sun? Again, completely arbitrary.
One of the great things we’ve implemented at Redgate is the concept of release trains – see http://blog.red-gate.com/success-weekly-releases-occasionally-dont-release-release-wednesday/ for some more info. This is a method for running an Agile project and representing a backlog, by splitting the work for a project up in to separate carriages on a train. Each carriage represents a block of work which will be released. But here’s where it gets interesting – each block of work (or “carriage”) is a pre-decided length. For one project, this is 6 weeks – so every block of work carried out as part of the project needs to be done in 6 weeks. How can the team work with such artificial constraints? What if the work that needs to be done is 8 weeks? Or 4 weeks?
Here’s why this works so well – if you’re adding a new feature to a product (let’s say it’s “Allow user to register on the site”) a large part of what the product manager and team have to decide is “How big is this piece of work? How long are we going to take on it?”. And this is a problem – how do you make this decision? How do you assess the importance of the work and stop at the appropriate point, before moving on to the next feature? This is a real problem – before you do the work, you don’t really know how important it is, so when will you know when to stop?
Now, if we set, what is admittedly, a completely artificial length, to the piece of work we do – say 6 weeks – what does this give us? At least:
A roadmap – we can draw the train (with carriages) on a piece of paper and say, “Here’s what’s happening in the next 6 months – we’re going to do four blocks of work on features A, B, C and D” (four blocks of 6 weeks is approximately a half-year, with time off for good behaviour). So everyone knows what’s coming, internally and if you like, externally. NB: We’re still Agile – nothing is set in stone, we can adjust based on feedback and so on. But you are giving visibility to those that want it.
It forces good decisions in a team – if you want the feature to do everything, then it won’t look beautiful. Or vice-versa – but not both. For example, for our feature “Allow users to register on the site”, well it could integrate with all sorts of authentication mechanisms – Active Directory, 3rd party mechanisms, your own, but it’s not going to do all of those in 6 weeks AND have wonderful usability. The team has to start making grown-up trade-offs – is one sort of authentication okay? Is usability more important that types of registration? Suddenly the discussion is about the real value of each piece of work to customers – and this is good.
I.e. it gives product managers visibility and a great tool for planning, and it gives teams a mechanism for making good decisions. But primarily it stops option paralysis – conversations like “Well, if we did make it look nicer, wouldn’t that be great?” or “Why don’t we add these other three authentication systems as well?”. It allows you to get on with something, do it, finish it, measure its success and move on.
Of course there’s a risk – what if, by just adding that one extra feature, you did the thing that every customer wanted and that made the product a success? Well, may be, but two things:
How would you ever know that, upfront? You can’t.
Opportunity cost – what if the next carriage on the train was the thing that unlocked customers? You’ll never get on to it if you don’t get the current carriage completed.
So I’m a fan of completely arbitrary deadlines – IMHO, don’t even bother looking for a real deadline (or other constraint), just set one at an artificial point in time. The benefits out-weigh the cognitive dissonance caused by working to something that seems somewhat random.
I was fortunate enough this week to go for one of the finest meals of my life. Just incredible food – however, that’s not what this post is about (I believe there are many blogs out there on all things foodie..). It’s about the superb customer service that came with the meal and the elements of that service that made it really stand out.
Everyone understands the importance of great customer service, to the extent that re-iterating that point is like reminding people to breathe. But how to give great service is a more difficult problem. Is it responsiveness? Likeability? Efficiency? Politeness? *
The three things that, for me, make truly great customer service are attention to detail, memory of the relationship and great management. I’ll illustrate with a few examples from the meal..
My wife booked the meal and presumably mentioned it was my birthday. As we walk in, at the mention of the name on the booking, they greet me with “Happy Birthday!” – they didn’t need to look this up, they’d been primed before we got there – great attention to detail.
Then they brought the menus – they knew my wife had booked the meal (and that it was my birthday), so the menu with prices went to her, not me – again, great attention to detail and memory of the booking (and also, top marks of course for not automatically giving the menu with prices to the man..).
We explained that we (only!) had three hours for the meal, so didn’t want to feel rushed as we went through the courses (it’s a long meal). They helped us with this, advising a shorter menu, which was great. But then an hour later, the maitre d’ came by and enquired “Hope you’re not feeling rushed? Do you still feel comfortable about being done in time?”. I particularly liked this – he’d remembered what really mattered to us (that we had a relaxed meal, without feeling rushed, but with a deadline) and asked us about what really concerned us.
There were lots more examples of this – flawless attention to detail regarding our concerns. But the other thing I noticed, was the style of management used by the maitre d’ with the waiting staff, as well as by those staff with each other. The atmosphere with the customer was quite relaxed, informal and really put us at ease. But if you watched the interactions between the people working there it was one of ruthlessly high standards and not letting anything slip. When serving a particular dish, one of the waiters was standing in the wrong position to be able serve easily. Another of the waiters corrected him (with a look – hard to spot unless you concentrated!) so that the service was flawless. Also, looking towards the kitchen, you could see the maitre d’ constantly monitoring what was happening, directing staff, correcting staff and repeatedly striving for improvement.
What I particularly liked about this management style, was that the manager had a relentless focus on improving quality at any cost. No concept here of ROI or cost-benefit analysis. If the service wasn’t good enough, then it wasn’t good enough. Of course this is easier in a smaller organisation (like a restaurant), and not such a simple problem if you’re a multi-national bank trying to service millions of customers. But for me, if you perceive service as a “Cost to be reduced” where you’re trying to make sure the customer gets “Just about good enough service that they don’t get hacked off” then you’re on a downward spiral. This has been seen in banks and other service providers over the last few years, where customer service has been outsourced to reduce costs. Contrast this with the restaurant where the manager, I strongly suspect, couldn’t give two hoots about the cost of his service – if he needs to increase salaries to get great people, so be it. If he needs to discipline and fire someone for repeatedly not reaching the high standards he insists upon, then so be it. If he has an attitude that every day was “Just not quite good enough – I need to do better tomorrow” then great – he might be difficult to work for, but to the customer the end result can make all the difference to whether he or she comes back again.
This does come with challenges in a larger org – how to do you embed “Memory” of a customer relationship with your representatives? They can’t remember every detail of every relationship they have (or can they!?) – so you start to rely on systems like Zendesk or Freshdesk to keep track of customer support problems or CRM systems of course, on the sales side. That’s fine, but it’s how you use these systems that count. A boss of mine from years ago knew the football teams of every customer he ever spoke to – every call to a customer would start with “I saw Stoke City did well against Palace on Saturday – you said you thought Mark Hughes was doing a great job..”. Attention to detail and memory of the relationship. This data is available to you, but are you using it properly? A lot of the practices exhibited in the restaurant can be translated to the larger organisation, though it might need process to embed it.
And the management style can certainly be translated to the larger organisation – my view is that the head of customer services shouldn’t care too much about costs or budgets. Yes he or she might need to be reined in at times (“No, you can’t hand deliver a fruit basket to that customer in Tahiti”), but with a ruthless focus on always improving standards, regardless of the obstacles, the end result will be great for customers, and for your business.
* By the way, things like “Likeability” and “Politeness” are, for me, just minimum requirements. Hiring someone to do customer service who wasn’t a really likeable, positive and genuinely nice person is like hiring an actor who “Doesn’t like getting up in front of people”. It’s the essence of the role!
Every new idea is a bad idea. Well, not quite, but every time you choose to do something new, there always seems to be 100 reasons why it’s going to fail.
Wrong people, not enough people, misunderstanding of the market, can’t extract value from it, too many changes needed, not our core competence, not completely aligned with everything else, too aligned with everything else (“it’s nothing new”), inability to execute on the plan, too many great competitors, too few competitors (so how can there be a market?), and so on and so on.
So what do you do? There is always the easy option – do nothing! If the project looks Herculean, you always have this as a fallback option. By doing nothing you avoid all of the problems and risks listed above in one fell swoop. And think of all the the effort and resource you’ve saved? Sounds like a great option, no?
Before my father retired, he was an architect. Winning business in the architectural profession changed significantly during my dad’s career. When he started most work was obtained through getting to know people in your area, discussing the idea then getting the job. And if you did a first piece of work for someone, then chances are you’d get every subsequent piece of work after that.
But all has changed during the last 20-30 years, to a process of bidding for almost every job, similar to the world of advertising. Almost any piece of work over a certain value involves multiple firms bidding for the project. This is of course, a burden on every organisation leading, in the majority of cases, to completely wasted effort. You can argue it’s inefficient – so much time that could be spent more productively – but that’s the system.
My dad’s approach in this situation was to bid on a lot of jobs. He had specialisms, in types of buildings, size of projects, and location, but he often strayed well outside these specialisms and sunk a great deal of effort in to bidding on all sorts of weird, wonderful and occasionally distant projects. A lot of time and effort was spent in bids that led to nothing, so why take such an inefficient approach?
Whatever the reasons why, it worked. My dad’s firm grew over the last 20-30 years, and in all sorts of unpredictable ways. Where his earlier career covered a lot of factories and industrial work, later he did work for schools, medical centres, and a lot of very interesting housing work.
For me, the secret of this success, which my dad confirmed, was that “You never know what will come of the work you do – the future is unpredictable”. He would often bid on, say, a school extension, lose the bid but then a year later, the school governors would get back in touch saying “We really liked the bid you presented a year ago, do you want to come in and talk to us about a new school building we’re doing?”. And this happened all the time. The point of course, is that if he had never bid on that piece of (rather speculative) work, he would never have made that contact, impressed that board, and ended up with another job a year later (followed by lots of follow-up work..).
When he retired and passed the firm on to others, they took a different, far more cautious approach. Every potential bid went through a rigorous vetting process, questions like “Is this our specialism?”, “Is it too far away?”, “Do we have enough people to cover this if we win it?” (oh, what a good problem to have!) and so on. Through this, they bid on far fewer contracts and, guess what, are not doing so well.
So, whatever the risks, however big the mountain of problems you face, however many countless ways something could go wrong, bear in mind that repeatedly doing nothing inevitably leads to a downward trajectory, particularly given the complete unpredictably of the future. Though it may be a high risk path, taking on all sorts of new and unknown projects, the alternative of doing nothing – though less risky and unpredictable – can be a somewhat sadder affair.
I often find that, when it comes to make certain types of decision in an organisation, this just seems to take weeks. And if you’re unlucky, this can roll in to months. Why? What is it, a lack of decisiveness? An unwillingness to commit to anything? Lack of identification of a “Decision maker”? Just weakness!? I suggest that it’s none of these things, but in fact inevitable, when it comes to a certain classification of problems. More specifically, with complexproblems (definition below), there’s actually very little you can do, but accept the time it takes, and stop worrying.
Here’s an example, of the sort of discussion that’s happening in offices up and down the country. NB: this is purely for illustrative purposes, and not related to any real events!:
Colleague 1 – “We’ve got a problem hiring account managers. Let’s have a meeting to figure out what we’re going to do about it”.
Three colleagues sit and discuss the problem and decide “We’re going to increase the salary on the website, to attract more people”
Colleague 1 tells the HR team. At which point the Head of HR points out “What do you think our current account managers are going to think when they see that salary on the website? We can’t do this – let’s have a meeting”
Colleague 1 and Head of HR have meeting and decide “We’ll increase salary for the role, but we’ll put a very wide range, to keep current employees happy”.
New salary range goes on job ad, on site
Applications start coming in – from lots of junior people who assume it’s a junior role, from the low starting salary
At the same time, account manager colleagues start asking “Why aren’t I getting that top range salary? I did an amazing job last year!”
Various colleagues and HR people sit and have another discussion about the salary range, and decide to tighten it up again, to stop junior people applying and to keep employees happy
Update page goes live
Colleague 1 chips in – “Hang on, we’re back where we started! We still haven’t solved my problem of getting an account manager – what’s going on?”
This isn’t supposed to be an example of the difficulties of hiring. It’s an example of a long decision making process going round and round in circles, leading I suspect, to frustration amongst all of those involved.
But why has this happened? Why is it so difficult? Fundamentally, it’s because the problem of “How will we get more account managers in the building?” is a complex issue – and therefore has different characteristics to simpler problems.
Simple Problems – simple cause-and-effect problems, often with obvious answers. And often something that happens all the time. The example I like best is “What to do if someone comes in to complain about your hotel?”. Is this a difficult problem, requiring a committee of your greatest minds to figure it out? No! Just give the guy some kind words, may be a discount code and keep him happy. It’s a simple problem, and generally “Best Practice” should be applied.
Complicated Problems – again, there is cause-and-effect here, but more expertise is needed to fix the problem. The example in the text is a problem with your car engine. There is a cause-and-effect going on here, but what is it? Can anyone fix it? No, you need expertise and it might take hours to diagnose the problem. Software Engineering can also, often, fit in to this category – okay, you want the website to do X and Y, and it’s certainly possible to do this, but it might take years of experience and expertise to make that happen.
Complex Problems – the key difference between complicated and complex problems is that, for the latter, the domain is simply too complex and unpredictable to undertake a priori analysis and come up with the answer in one shot. There are feedback loops – making one decision impacts other parts of the problem space, which feed back in to the original decision and change the context. In the example above, increasing the salary range on the site causes disgruntlement amongst employees, leading to a revision of the original decision and so on.
Chaos. No-one knows what the hell is going on, and trying to sit back and rationally analyse cause-and-effect is pointless. Your job is to “Stop the bleeding” and manage the problem actively.
So, our example is a “Complex” problem – and I’d argue that a large number of management problems fall in to this category. Why? Because you’re dealing with people, their aspirations, irrationalities, emotions and so on, and these are unpredictable at best. Or even without the need to take peoples’ responses in to account, many problems still fall in to the domain of the complex. We had a recent process to try and figure out a new pricing structure for our products and suites of products, and this took weeks to figure out. Why? Because all of our products, functionality and bundles are weaved together in a web of interdependency – decreasing the price of product X makes bundle A a more difficult up-sell, but that makes the prices of other products in the bundle up for change, which then affects bundles B and C and so on, and so on. This took weeks to resolve as we went round and round trying to reach a stable equilibrium which made sense.
So, making decisions like this are always multi-step. And worse, almost always involve lots of different people (particularly in an org where consensus building is important – a different topic, to come!). Many of whom won’t be available at the same time (people are busy), who often need different levels of information, already have different levels of knowledge of the domain space and so on.
A very large number of problems fall in to this type – where meeting 1 leads to a decision which then affects others, leading to meeting 2, which then affects the decisions in meeting 1, leading to meeting 3 and so on and so on. What you’re trying to do is reach a stable equilibrium point – where, all things considered, most people are kind of happy with the outcome and all of the issues have been considered (many of which won’t have come out till meeting 2 or 3). NB: This is also why these decisions can often feel like compromises – because they are, and the better for it! There is no simple, obvious-to-all answer, a silver bullet which we should have realised on day 1.
So next time you’re getting frustrated with a decision making process, asking your colleagues “Why is this taking so long? Just make a decision already?” take in to account that it’s likely to be a complex problem which can’t be forced.
What you can do of course, is create an environment where the process happens as smoothly as possible – are the right people involved at different points? Are there people making the problem worse? Do you have people who can work through complex problems, with poor quality data, and intangible concepts? Can you yourself facilitate the process (rather than jumping in with the magic answer)? On this last point, I like the comment made by Kishgore Sengupta*:
“Instead of saying ‘Don’t just stand there, do something’ your new behaviour should be ‘Don’t just do something, stand there’”
* I’d like to thank Cambridge Judge Business School for introducing me to these concepts, particularly for the course given by Kishgore Sengupta on complexity – fascinating stuff!
Jeff Bezos’s letters to shareholders are, of course, famous for their insight, not only in to how Amazon functions, but also for their advice on how to run a certain type of business. One of my favourite excerpts, from the 2005 letter is:
As our shareholders know, we have made a decision to continuously and significantly lower prices for customers year after year as our efficiency and scale make it possible. This is an example of a very important decision that cannot be made in a math-based way. In fact, when we lower prices, we go against the math that we can do, which always says that the smart move is to raise prices. We have significant data related to price elasticity. With fair accuracy, we can predict that a price reduction of a certain percentage will result in an increase in units sold of a certain percentage. With rare exceptions, the volume increase in the short term is never enough to pay for the price decrease. However, our quantitative understanding of elasticity is short-term. We can estimate what a price reduction will do this week and this quarter. But we cannot numerically estimate the effect that consistently lowering prices will have on our business over five years or ten years or more. Our judgment is that relentlessly returning efficiency improvements and scale economies to customers in the form of lower prices create a virtuous cycle that leads over the long term to a much larger dollar amount of free cash flow, and thereby to a much more valuable Amazon.com. We’ve made similar judgments around Free Super Saver Shipping and Amazon Prime, both of which are expensive in the short term and—we believe—important and valuable in the long term.
What Jeff is saying here, as he has in many of his other letters is that Amazon is in for the long term, making long term market decisions (essentially, that Amazon is taking a market position that it will always be the cheapest, getting cheaper all the time, whether for a book, a baby stroller, a Kindle or 50 TB of cloud storage) in preference to short term fixes. But more than that, he’s saying that even when he knows that a short term (and presumably, very tempting!) decision will make more cash – because the maths shows it – that will be usurped by their strategy to play the lower-price long game.
This reminded me of a an interesting problem from the world of maths – simulated annealing. Described considerably more succinctly, here on Wolfram, this is method used when trying to optimise a given function, and, because of the complexity of the function, there is a risk of getting caught in local optima, particularly when using standard “hill climber” functions. If a function is too complex, with too many variables to find the optimal solution directly, one has to start from what we know today then use “hill climber” functions to find “What’s the direction I should go in?”. For example, we’re currently charging $x for our product, what should I do next to optimise revenue? Increase slightly or decrease slightly? And if the function your trying to optimise is the “Best price for this particular product”, then this will reach an optimal solution – you’ve optimised when all experiments to change the price just make profits worse. I.e. you’ve used “the maths” to find the optimal solution for this particular problem.
But this is a local optimisation. If what you’re trying to optimise is the bigger, much more complex function of “What is the best set of prices for everything my company offers?” then the danger of this approach is that you optimise the individual cases whilst de-optimising the problem as a whole. Simulated Annealing as a process tries to solve this problem in two ways. Firstly and most relevant here, is that so-called “Bad” decisions are allowed to be made locally if it allows one to explore more of the landscape of possible outcomes. So, for example, if your product currently sells at $1000 – the hill-climber approach would say “What if I charge $1001, or $999 – which is better?”. Keep repeating this till you maximise profits – may be at $783 for example.
However, with simulated annealing, you would allow a test which would be “What if we charge $10? Or $10,000?”. Possibilities that seem ridiculous, but what if these experiments take your business in a whole new direction, reaching new customer types you never dreamed of? What if that, in the long term, led to optimising your business as a whole? You would never realise this success without trying these experiments that fly in the face of what the maths is telling you, and letting those experiments run for a while.
I know, of course, that I’m slightly over-extending an analogy here – in fact what Jeff Bezos is doing is not taking larger, experimental punts to try and jump out of local minima. Instead he has a long term strategy which overrides that – a belief that in the long term, the lower prices for everything is the optimum for his business. A strategy that’s hard to argue with given his success!
But the point really is that, sometimes, taking a strictly data-driven decision in the short term, though it may show nice charts of increased revenue (i.e. you’ve optimised locally), can have longer term implications that you might regret, if those decisions don’t sit well with the position in the market your company is trying to achieve. If you’re trying to achieve the position of “The cheapest”, don’t increase your prices (see Amazon). If you’re trying to achieve the position of “The best”, don’t lower them (see the Apple 5C). If you’re trying to achieve “Pay as you Earn” (i.e. people pay according to ability to pay), then set an intelligent pricing strategy that caters for all wallets and stick to it – see any Atlassian product, e.g. JIRA:
This last example is a good case in point. I’m sure it would be very simple to show how increasing the lowest price point here ($10 – that’s ridiculous, how can they make money on that!?) will make more money in the short term. But there’s a long term strategy here based on Life time Value – today’s startups are tomorrow’s big businesses. Get them hooked on the product now and in the future they’ll be buying at the higher price points.
In the phrase”data-driven” it’s not the term “data” that worries me. It’s the term “driven” – when we are “driven” to decisions, rather than sticking to a long term strategy, instead letting the numbers make the decisions for us. By doing this we’re in danger of optimising in the short term, and not for the long term.
Obviously I’m not saying “Ignore the maths” all the time. Just be very careful when it suggests doing something that doesn’t align with your long term strategy of where you want the company to be in 10, 20 or 50 years from now.
We’re on holiday at the moment, in the Netherlands, but just thought I’d write a short post about a great example of guerilla marketing we spotted today, for something we visited whilst in The Hague.
There’s a great attraction in a small basement near the centre of The Hague, called Amaze Escape – http://www.amaze-escape.com. Essentially they have three rooms – you choose one of these rooms for your “Escape adventure” and are then locked inside. You have one hour to find clues, figure out riddles and puzzles, and work out how to escape the room. It’s absolutely great – we chose the “KGB” room which is really atmospheric (I’m not sure the kids got all of the references to the former Soviet Union, but they loved it anyway!) and they’ve done an amazing job of making in not too difficult, not too hard and really exciting.
Firstly, let me describe the long and complex process we used to decide to go to Amaze Escape:
Open the Trip Advisor app on the iPhone, select The Hague and “Attractions”
Skim through the top few items (it defaults to being ordered by rating) to see what sounds like fun
See that Amaze Escape is the #2 rated attraction in The Hague, and click through to its Trip Advisor page
Read lots of great reviews and the descriptions on that page of what it basically is
Book it
Erm, and that’s it. No “brand awareness”. No Google searches, no “Content marketing”, reading articles about the benefits of “Escape room themed attractions”. Just a search on Trip Advisor, reading some good reviews, and booking made.
When we got there we realised it really was a startup – there were lots of clues, such as: it wasn’t enormously well sign-posted at the building, there were just a couple of people working the exhibit (who were obviously the owners of the business), everything was running off iPods and laptops, and lots of other little clues. But that’s one of the things I really loved about it! It was very “pre-corporate”. One of the guys there was really proud that he’d devised all of the clues for the rooms. And what was particularly great was the amount of effort they put in. They were great hosts, really friendly, and they’d obviously spent a lot of time on the details – the sorts of things that get lost later on, when someone decides to “rationalise” a service, and work out on a spreadsheet what the “Minimal Viable Product” is – i.e. what corners can we cut. So, free drinks when you get there, photos taken of you in the room that get sent through later, flexibility with the booking, lots of time spent with us afterwards talking about his business and how it all works (he wants to open one in London, which sounds great!), an unasked for discount for the kids and so on. All the sorts of nice things that disappear when business like this grow – he was doing things that “don’t scale” while he could.
But what about the marketing? The clue came when I mentioned off-hand “Yeah, I think you were #2 on Trip Advisor” to which he immediately replied “Yes, we were #3 the week before that and #7 before that”. I chatted to him a bit more and as far as I can see his marketing strategy is “Get good reviews on Trip Advisor and one or two other sites, that’s it”. I doubt he’d phrase it like this, but taking the Good Strategy/Bad Strategy model:
Main obstacle – no-one has heard of us in a crowded market
Unfair advantage – we can “do things that don’t scale” providing an exceptional experience – something the big companies can’t
Strategy – use our unfair advantage to get amazing reviews on the sites that people use to leapfrog other attractions
And consciously or unconsciously this has led to the actions/objectives of focussing almost solely on getting good reviews on Trip Advisor.
I.e. they’ve figured out “What’s the one single thing we can do which will make a massive impact on our business this year (they’ve been going a year) – let’s just do that”. May be they have a graph somewhere showing “Rating on Trip Advisor for The Hague” (though I suspect not, as they both seem to have the graph in their heads).
What to learn from this? – only the value of a mono-focus on an intelligently set objective, chosen for maximum impact. They knew what their unfair advantage was (that they could provide an amazing experience), what their problem was (when they started, no-one knew about them – they had no web presence or brand), and figured out a clever way of fixing that.
I’m beginning to think I might need to change the tag line for this blog. One of my earliest posts was about how we needed to apply some scientific rigour to the process of marketing attribution and therefore ROI. How can marketers be getting away with such unproven and unprovable techniques, spending all this money with so little evidence of success?
But I think I might have changed my mind. We’ve actually had a couple of geniuses at Red Gate looking in to the provability, or otherwise, of marketing ROI, and their conclusion? Nah – you can’t do it. More specifically, for our volumes, with our variation in spend (we’re not a company make a thousand sales a day, all at exactly $10 each), it’s not possible to show statistically that a sample and a control group will differ enough to be discernible at any interesting level of significance. I’ll get more details if they let me (as well as writing about the interesting point raised that – does this mean Google’s whole business model is based on FUD? On us be too scared to kill spend on things like Google Adwords? For another time…).
Anyway, I was thinking about this problem – that completely undermines this blog – and thought that actually there’s more to it than the maths. And that actually, trying to measure return on investment for marketing is very much like trying to measure return on investment for an employee.
There are many similarities between these two investments:
They are both investments. I.e. You’re spending money, either on Adwords (or whatever) or a salary. You would only be doing this if you expect to get some sort of return.
So far so simple. Next – In theory, both can be measured in terms of Inputs, Outputs and Outcomes. As I outlined in another earlier post, I try to measure campaign success in terms of Inputs (“Am I getting what I wanted? Does the advert look good and say the right thing?”), Outputs (“What’s the immediate KPI? How many webpage visits did I get? How many clicks on the video? How long did they watch it for?”) and Outcomes (“What’s the headline result – was revenue impacted?”). Similarly we can do this for an employee. Take a developer – what’s the quality of his/her code? How do people like working with him/her? (Inputs). How much code does (s)he write? How buggy is it? How often does it get rolled back from production? (Outputs). And – is the end product something people want and buy? (Outcomes).
Thirdly – there are trivial examples, I guess, of where this ROI is measurable in both situations. For marketing – you’ve never marketed ever in a particular country, say Micronesia, and never sold a single thing in Micronesia. You run some Google ads in Micronesia, and nothing else, then measure sales in 6 months time. I think you could get a pretty accurate ROI here. Similarly, if you employed someone to act as a consultant on your behalf, paid that person $100,000 per annum and, purely through having that person on your books, was able to bill $200,000 in consultancy work, then perhaps you could calculate an ROI here
But, I think these are trivial examples. In most cases, it’s almost impossible to measure the return on investment in hiring someone. Take for example a good product marketing manager, let’s call him Pete. Pete spends a lot of his time researching and thinking about positioning for a set of products. He often has great, innovative ideas and insight (though not always!). Also, he spends a lot of his time with customers understanding their backgrounds, needs, desires and issues. Furthermore, he works fantastically in a team, bringing cohesion and vision to what everyone else is doing and helping to keep those around him motivated. He also helps out with training sessions for others in the company on his areas of expertise, and also helps out with company events both internal and external.
How on Earth do you measure the ROI of Pete? Undoubtedly he’s having a positive impact on his company, but how could you measure it? How could you assess the impact he has on motivating the team around him? Perhaps that stopped someone leaving because “They just love working with people like Pete”. How would you ever know how you saved $10,000 on recruitment fees through that? Or how his work at events helped bring new customers and employees to the company? And more specifically, how would you ever measure the impact of clever product positioning on sales? I’d say impossible!
So really, I’m coming round to the view that, though we might be able to measure Inputs well, both for campaigns and for people (“Is this a great campaign? Did we get it spot on?” and “Is Pete doing well? Is he producing great work, and a great person to have on the team?”) and we can measure some Outputs (“How many page visits did we get?” and “How buggy is Pete’s code? How productive is he?”), Outcomes and therefore accurate ROI are pretty much an impossible requirement.
So what does that leave us with? Well personally, I think it’s an issue both of using intelligent qualitative assessment of work and also some faith that high quality work based on sound judgement will have the desired effect. For example, when thinking of Google Adwords – if we’ve done our research and know that there are lots of customers out there with a particular problem; and we’ve written our search terms to reflect that in an intelligent way; and we’ve worked on the ads so that they really reflect how we know customers are thinking; and of course, we’re checking that the ads are working, and continuously improving them – then, I think it’s reasonable to suppose that this effort (and spend!) will produce some results beneficial to your company. Of course, you have to check the rest of the pipeline – when they’ve discovered you through the ad, can they try your product easily (Validation)? Do they get what it is (Positioning)? Can they buy it in a way that suits them (Pricing and Packaging)? But if these things are also done well, I believe the extra work trying to validate whether or not you’re getting a particular overall ROI from Adwords is a hiding to nothing.
? As you’ll see below, this was the main issue that stopped this being an almost trivial exercise.
re’s a great scene, towards the end of the film 
