Understanding your Ideal Customer Profile (ICP). Segmentation, personas, buyer journeys, and tools to connect your marketing strategy directly with the customers who matter most.
If you’re growing a SaaS company, there often comes a moment when success with SMBs isn’t enough. You’re ready to move upmarket. But selling to larger organisations requires more than just a bigger sales target – it means changing how you think about customers, teams, tools, and messaging.
Here’s a straightforward checklist, based on what I’ve seen work, to help you scale from SMBs to enterprise.
1. Hire a Sales Team That Can Sell to Committees
You can’t grow into the enterprise if your sales team isn’t ready for it. Selling to one or two decision-makers in a small company is very different from selling into a team of senior stakeholders with complex buying processes. Even if your organisation is small, make sure you have at least one or two people who can manage enterprise deals properly – structured sales approach, strong qualification, and an ability to drive deals forward across a buying group.
2. Redefine Your Ideal Customer Profile (ICP)
In the early days, your ICP might’ve been simple: one end-user, one pain point. That changes when you move into larger organisations. Now you need to understand who your senior decision-makers are – IT, Finance, Operations—and what matters to them. And you still need to win over the end-users. Most enterprise deals depend on both.
3. Understand Why Your Product Solves Their Problems (What is the “Job to be Done”)
Enterprise buyers won’t connect the dots for you. It’s not enough that your product worked well for a team lead at an SMB. You need to be clear about which problems your target stakeholders are trying to solve, and why your product is the right solution. This takes more than just positioning work – it takes real insight from customer conversations and a solid understanding of the world they operate in.
4. Build a Target Account List
You need a focused list of the right organisations to go after. Use data — firmographics, technographics, and any buying signals you can get hold of. If you’ve already got larger organisations using your product, even in a limited way, start there. Prioritise warm accounts.
5. Set Up Account-Based Marketing (ABM)
You’ll need marketers who can work alongside sales and run targeted campaigns for specific accounts. Whether it’s one-to-one or one-to-few, the key is relevance and coordination. This isn’t cheap or quick to build – but it’s essential.
6. Align Sales and Marketing at the Frontline
If sales and marketing aren’t working from the same account list, or aren’t aligned on messaging and strategy, things break down. Bring in BDRs and SDRs who can work directly with field marketers. Shared goals, shared plans.
7. Build the Right Tech Stack
You’ll need the basics: a good CRM (usually Salesforce) and a solid marketing automation platform (like HubSpot). On top of that, I recommend:
These help you run coordinated outreach and target the right accounts at the right time.
8. Revisit Pricing and Packaging
Your pricing needs to match how enterprises buy. That’s not just about the number—it’s about the model. Whether you go per-user, per-transaction, annual or monthly—make sure your pricing is clear and credible. If pricing becomes a point of confusion, you’ll lose momentum. Tools like ProfitWell can help here.
9. Build Out Case Studies and Thought Leadership
If you’re not already the market leader, your content needs to show that you understand the market better than anyone else. That means writing clearly about customer problems and how to solve them. Get case studies from the best-known companies you’ve already worked with – even if the deals were small.
10. Don’t Forget PR and Analyst Relations
Enterprise buyers do their research. That includes the press, analyst reports, and third-party content. Make sure your message shows up in the places they look.
If you’re moving from SMB to enterprise, I’ve created a detailed checklist in the Resources section.
In most companies — especially SaaS, tech, or B2B — the product is always evolving. New features are added, roadmaps shift, priorities change. But while your product can and should evolve, your messaging to customers, investors, and even your internal team needs to remain consistent and clear.
The risk of constantly shifting messaging is simple: if you’re always talking about the latest feature, your audience struggles to understand what your product actually does, who it’s for, and why it matters.
So how do you create messaging that stays relevant even as your product changes? The answer is to anchor your message in value — not features.
Start with a Clear Positioning Statement
The foundation of any strong product message is a Positioning Statement. This is not a tagline or a piece of marketing copy. It’s a simple, internal declaration that keeps your story focused as the product evolves.
A good Positioning Statement answers three basic questions:
Who is your target customer?
What unique value do you deliver?
How do you prove that value?
For example:
“We help mid-market SaaS companies prevent Microsoft 365 governance risks by giving IT teams full visibility, automation, and control — without adding admin overhead.”
That type of clarity gives you a reference point when you’re briefing the sales team, writing web copy, or speaking to investors. Features may change; the Positioning Statement keeps your message stable.
And of course, positioning isn’t necessarily permanent. As your market, product, or customer base evolves, you can refine it. But changes should reflect major shifts — not minor feature releases.
Define Your “One Simple Thing”
After positioning, refine your core message into your One Simple Thing (OST) — a short, memorable expression of the emotional power your product delivers.
Steve Jobs famously introduced the iPod as:
“1,000 songs in your pocket.”
He didn’t mention storage capacity, file formats, or syncing. The OST made the iPod instantly understandable and appealing.
Your One Simple Thing should aim for the same effect: immediate clarity, emotionally resonant, easy to share. This helps customers, prospects, and even your own team explain what you do.
Test, Refine, and Iterate
Early on — especially during customer discovery — your messaging will need active testing. Present your Positioning Statement and OST to real prospects. Watch what resonates. Pay attention to where they pause, what they repeat, and what confuses them.
Iterative messaging work often makes the difference between early traction and stalled growth. Strong product teams treat messaging as part of product development — not just something for marketing to handle after the product is built.
Use “Social Intents” for Early Conversations
In customer conversations, it can be helpful to use simplified “social intents” — very short, informal versions of your core message that you can test in early calls and pitches.
These are not formal pitch decks or marketing headlines. Instead, think of them as working hypotheses you test in real time:
“We help fast-growing companies stop Microsoft 365 permission sprawl before it becomes unmanageable.”
Social intents are particularly useful in discovery and early-stage sales, where you’re learning as much as you’re selling. Just be cautious where customer data or privacy regulations apply if you’re collecting feedback at scale.
Messaging Stability Is an Advantage
In fast-moving product organizations, stable messaging is a competitive asset. When your team knows how to describe the product simply and consistently, everything else gets easier: customer conversations, onboarding, sales enablement, investor pitches, even hiring.
The product will keep changing. The roadmap will keep evolving. But a clear message anchored in customer value can stay stable for years.
Scaling up marketing is tough. You’ve missed the fun of the early days where you can try a new thing each week and you’ve not yet reached the safety of a well established brand. The board will be on your back, expecting enormous growth yesterday when you know in your heart that building a brand takes time.
Assuming you don’t have infinite budget, infinite resource and a super-experienced team sitting there waiting for their next job, you need to prioritise. And to prioritise you need a strategy. Part of choosing a strategy is looking at your starting point. What are your unfair advantages? Where are you weak? Trying to start from scratch where you don’t have the expertise or traction in the market can be very tough, particularly if the board want results ASAP.
I use the diagram below as a way of focusing efforts where it’s needed:
There are five strategies listed from top to bottom. The further down the list you go, the less targeted the strategy becomes, though of course you are casting a wider net.
From left to right, the diagram provides a summary of what the strategy actually is, a grid showing where the strategy is most effective (is it better for large or small companies? And is it better for companies who already know what they want?), then most importantly, the cost of the strategy both in terms of budget but also in terms of the number of people you need to implement it effectively.
Crucially, when looking at costs you have to look both at the financial cost but also the number of people you need. To take a simple example, Google ads don’t need a large team to implement and maintain. However they cost a lot, whether you believe they are effective or not. In contrast, high quality content is cheap if not free to create. But you need a team of very talented people for this to be effective.
Finally I’ve put in a column of “how to scale”. Not everything can be scaled by pouring more money in. More money won’t give you higher quality content. More money won’t fix your hiring process. More money won’t fix your culture (in fact it does the opposite). When looking at how to scale it’s crucial to do the strategic diagnosis first of what you are capable of doing as an organisation, where the real problems are and so on. Without this you’ll burn everybody out, but also it will take far too long to hit the targets that you have.
This is where the real skill comes in, in senior marketing roles. How do I make an impact soon? What numbers can I show that actually show progress for a long term objective? Where are the quick wins to keep the board onside? What can I do if I’ve got pots of money? What can I do if I haven’t?
When I moved into the CMO role I realised a number of ways in which the position was different to what I had done previously. A lot of these differences are to do with being in a C-level role, but I’ll focus here on the CMO position and the new things you need to learn for that job.
When I first started in this role years ago, it was overwhelming. Suddenly I was responsible for the marketing done by an already successful organisation, and there were 1,000 things I needed to get my head into. Yesterday. I realised then that what I needed was a structure for how to think about this set of responsibilities. After years of trying different models I managed to boil it down to the post-it note above, which is still stuck to my monitor years later. In my view, if you are in a CMO role, you should have a plan for each of these seven things. It might be that your plan is “This isn’t important to us, we’re a different type of business so I’m just going to ignore it”. But that’s still a proactive plan. If somebody asks you “Why aren’t you doing Google ads?” then you should have a well thought through answer, not just “Oh I haven’t really looked at that yet!”.
1. Market research
The core work on which everything below is founded. Market research – who actually wants the thing you sell? Why? What are the problems they are trying to solve? How many potential customers are there? How can you reach them? Who are the competitors? How do they position themselves? How does the market view their positioning vs. yours? And so on and so on. Often a founder knows these things (else you wouldn’t have got to a point where you have a viable company!). But as you mature you need product managers, product marketers and others around the business to understand the market more than anybody else. That last point is important – if there is another company in the market who understands how the market works better than you, then there’s a solid chance that they will beat you. Octopus Deploy is a good example of this. There is literally no company in the world that understands the deployment market better than they do. I believe this is a key reason why they do so well – if you are a customer why would you buy from the second most knowledgeable organisation?
How do you do this in your organisation? Simple, not difficult. You (personally) need to go out there and talk to customers. Yes, surveys are good and there are other ways of getting quantitative data. But you need qualitative data to and that comes from talking to people. If you’re going to write copy for an ad, how can you do that if you haven’t personally spoken to somebody that you’re trying to sell to? It can be difficult finding these people but there are options. Put up a stand at an event. E-mail existing customers offering them £50 for a chat. Run online surveys. Find a friendly industry expert who can give you the lowdown. But as a senior marketer, you or one of your colleagues needs to be doing this task. Oh and buy the book Obviously Awesome by April Dunford!
2. Content
No one likes adverts. Digital ads do work as part of the marketing flywheel, you need great content. What is great content? Simple – it’s content that people actually want to read. 98% of the content out there is bland, copycat, written by people who don’t understand the market and can be generated by ChatGPT. Your content needs to be remarkable in both senses of the word.
This is difficult. Finding people in your industry who can produce great content should be one of your highest priorities, but it will take up a lot of your time. You only need one or two but it’s much better to have one great writer than three average ones. And in my experience, it’s better to have somebody who’s an expert in your field and not the greatest writer in the world rather than vice versa. Most customers don’t mind about your grammatical errors.
But the thing that is so great about having good content is that it’s investment that will last you for a long time. A well written article about your domain can work for you for years to come. And then you’ll start to get people sharing links, commenting on posts and reposting articles. “Marketing” from someone that doesn’t work for you is always far more powerful because it is genuine and authentic.
But again, what can I do other than just writing great content? Well you can place that content on 3rd party sites. You can sponsor articles. You can encourage others to write about you. You can reuse content – if you’ve written a great white paper, cut it up in 20 different ways and use all of your snippets – a short advert, a podcast, a written article, a presentation. if you can get both things right (the creation and the distribution of information), then you’re maximising your use of content marketing as an activity.
3. Sales enablement
There are lots of different parts to sales enablement, particularly if you have a complicated sale that needs support. I’ll just focus here on the part that marketing can play.
But whose job is it to do sales enablement? Sales or marketing? I’ll dodge that question by saying that “You need some group in your company that is worried about sales enablement”. That may sit in sales or it may sit in marketing, or even somewhere else. But you can’t leave this crucial role to salespeople themselves. Without a sales enablement function supporting sales team you’re sending troops into battle unarmed.
There is an exception – where you don’t really have Sales at all! If you’re an online retailer and customers never really talked you during the sales process then sales enablement is less relevant for you. But otherwise, this is a key part of the senior marketing role and it is your responsibility to make sure it happens.
So your job in marketing is to set up the opportunities for the sales team to smash home (and generally they are Opportunities in Salesforce that you want to get to Closed Won). Sometimes of course a salesperson will generate an opportunity themselves, nurture it through and close it. But you’re not doing your job if you’re not enabling them with support, collateral, training, insights, and thirty other things which make their life easier. You may not get the glory when the points are scored, but without that teamwork between sales and marketing, with sales enablement as the bridge, the opportunities won’t close regardless of how good the original lead was.
4. Awareness
As per the earlier image, if you don’t have a large number of people who already know about you then you need to start earlier in the marketing life cycle. Nobody ever went from “Never heard of you” to “Here’s £25,000” in a week. They went through a whole series the complex stages ending with the sale. And this starts with basic awareness. Have they even heard your name? Is there any association between your name and the value you offer? A large part of your job as a marketing person is building the brand awareness, so that when the customer is looking at solutions there’s already a name there that they can trust (at least in part).
Building awareness is expensive, and in almost all cases, impossible to track. Yes you can do brand surveys and ask customers “Where did you first hear about us?”. And this is something you should do, perhaps a little later on. But either way, if you’re starting from scratch then it’s a long road ahead. And yes, there’s no way to go from zero to hero without a very large pot of money/investment.
How do you do this? Depends enormously on the industry. Paid-for advertising is an obvious answer but there are others. If your budgets are low then some ingenuity and creativity is needed. You need a crystal clear value proposition (why should the customer care?), good designers, a “Keep it simple” approach, but hopefully this should be one of the easier things to get going. These are some of the things I’d be thinking about:
5. Demand Gen
This is a tough stage to summarise. Theoretically everything you’re doing above is generating demand. I.e. the demand comes from the accumulation of all the other activities you’re doing.
But, in a senior role, you must know how to measure this even if you don’t know exactly what causes the generation of demand. To measure the performance of demand Gen, I would strongly suggest using “Value of opportunities created” as your KPI. i.e. Take the dollar value of opportunities created in a given month from Salesforce and use this to measure demand Gen performance. There are a few alternatives, but here’s why I don’t think they work:
Number of leads. Anyone can generate leads. You can fool Google it’s giving you lots of leads – but they won’t convert. The goal here is money and without knowing whether the leads are any good this is a meaningless metric.
Total revenue. Of course, this is what we’re all ultimately interested in. But there are so many contributions to this final figure (every department contributes to revenue), that it’s really difficult to pull apart where marketing has had an influence.
Awareness or some other early stage metric. You should know what these numbers are, but they’re just too far away from revenue. And it can undermine your credibility with the leadership team if you’re reporting on “Page visits” in your marketing performance meetings.
So you must show the top level opportunity value generation numbers. But can you show further detail? I’d suggest the following as a starting point:
Split the figures out by region
Split the figures out by sales team (if different to above)
Show the numbers for revenue from existing customers vs. new customers
Show the numbers by different industries or segments
And a final tip – start simple then build up. Start with the super-reliable opportunity value metric, then when you and the rest of the leadership team believe that number, move on to the next one. If you don’t do this then you’ll spend management meetings explaining 20 charts but without actually saying anything useful for the rest of the team.
6. Partnerships
Crucial for reaching customers you simply can’t reach on your own. This could be for a number of reasons, but often it’s a matter of size. If you’re a company of, say, 100 people and you’re trying to sell to Lloyds Bank then it’s very unlikely they’ll even look at you. So your job is to try and find a bigger organisation willing to partner with you. NB: there are also obviously times when you can partner with smaller companies, but that’s not the big win here. Of course the mountain to climb here is convincing then to work with you at all. The prize is worth it, but it can be a long slog (often years). And generally, “Go big or go home” – a single partnership with Apple will provide more value 10 partnerships with smaller firms.
The two main types of partnership where I’ve seen most success are:
Technical partnerships. Someone else provides a bit of technology that you don’t have, something that might take you years to develop and you need to get to market quickly.
Commercial partnerships. Access to customers that you can’t reach on your own. A simple example of this is a new country – if you’re trying to open up Spain as a market, for example, and you know nothing about Spain then you need a partner or you’re going to spend a lot of time and money going in the wrong direction.
Because building partnerships can take a long time and be quite arduous, it is often better to hire a separate “Partner manager” of some sort, not only to get their expertise but because otherwise it can be an enormous distraction from the core business.
7. Customer Retention
I thought I’d end on something slightly controversial. The business that you work for should have a deep understanding and strategy for how customers are retained. You should know why people stick with you.
What’s controversial is what you can actually do about it in a marketing department. I believe most customers stick with the vendor because the product is great. Once you’ve bought from someone do you ever see their marketing again? You were busy using the product and getting on with your own projects and activities. A lot of money is spent on customer success and customer retention teams, I’m just not sure that’s money well spent. The product retains people. What that means, is that if you as a company have a problem with retention I would invest budget in the product rather than marketing. That’s a difficult argument to make if you work in the marketing department (“What do you mean you can’t help!?”). But that’s the essence of good strategy – making difficult calls where resource is constrained.
So I won’t write more about marketing customer retention as I’m not sure it’s something you should spend a lot of time on. But as always, very happy to be proven wrong!
These are the seven categories that I’ve used to try and understand all of the work that is going on in the marketing departments that I’ve been fortunate enough to run. as I say, in a senior role you should know why you are or are not doing something in each of these categories, and what value this work adds.
Of course, really, we all want to build Skynet. However, until Judgement Day comes, we’ll have to make do with ChatGPT. ChatGPT is obviously a Big Deal right now for marketers, so I wanted to find out for myself.
Firstly, as a general point I do think it’s important to try technology out yourself before moving forward with a project. There are plenty of ways of trying out bits of tech if only for your own understanding. ChatGPT is no exception – you can try it online with almost zero effort:
This should start you off on your journey into the world of ChatGPT. For example, here are the results I got when I asked “What is the marketing flywheel model?”:
Definitely not wrong. And if I had to write a short piece on this topic I could do worse than copy and paste this into a blog post.
If your role is something like “content creator” then you can definitely get away with getting a machine to do your work instead. So, what’s the problem?
The issue can be seen in the response above. Though this answer is “not wrong” that is a long way from it being an insightful and useful piece of content. Customers coming to your site want insight, new ideas, new perspectives. They want to hear from industry experts, else why read your articles at all? If your article is just an aggregation of the content on the Internet, how are you differentiating yourself from everybody else out there?
The response above is marketing 101. Perhaps fine for a GCSE paper, but not good enough if you want to attract real customers (our job here). With follow up questions, I could definitely get more out of ChatGPT, but here are some of the things that are missing:
It’s very generic. How would this be different for your industry?
It’s not “Of the moment”. What’s new in the industry? What’s happened in the last month or two?
It doesn’t help with prioritisation. What needs to be done first? For a mature org vs. a startup?
How is the flywheel model different to other models? What is it similar to? Where shouldn’t you use it? Does it work the same in B2C as it does in B2B?
What’s the underlying strategy for this model? If somebody asked you “Why does it look like this?”, could you answer?
How is this different from the funnel model?
And so on. So again, for certain marketing tasks it is great. If I had an afternoon to write an FAQ about content marketing, this is where I’d start. But most of us aren’t under those time pressures – you should be writing quality over quantity. Have talked to some customers. Find out what their pain really is. Ask them why they bought from your competitor instead. Talk to industry experts. What you write from your own expertise will always be better from what ChatGPT comes up with.
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.
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.
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…
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!
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.
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.
“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 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.
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…
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.
“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!)
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!
Marketing budgets are always on the squeeze. Or may be less that money is tight and more that the expectations on Return on Marketing Investment (ROMI) are raised. “I don’t mind spend £50k on this campaign, but I want to know what return I got, or you won’t have £50k to splurge next year”.
The point is – how do we get more return for less investment? Well there is a way, and it’s free – and it’s where the company I work for get around half of our traffic. And they’re good leads, probably the best we get.
What’s the magic formula? What’s the source of these Glengarry leads? It is, of course, being recommended by a friend. We regularly ask our customers “Where did you hear about this product you just bought?” And the two biggest answers are “Recommended by a colleague” and the related answer “Used it in my previous job”. The latter I think of as “Recommended to myself” – if you move job it’s a great opportunity to dump old products you didn’t like using, so to take on the same products again in a new role is a real testament to your product offering.
These two answers add up to more than 50% of responses, with things like “Google”, “Events” and “Ads” (the things we have to pay for) a long way behind.
Now obviously there are significant subtleties here – getting to a point where people recommend your products to colleagues takes years of significant investment in R&D, support, innovation, community work and so on. Also of course, paid-for marketing is generally targeted at getting new people in from new organisations. But once you get this fly-wheel of traffic spinning, you can take your ROMI as high as you like – I suspect we could completely cut our marketing spend for certain products and not see a downward trend in leads for a year or two – some products have effectively reached escape velocity. One of the reasons this source is so effective is that not only do you get a great lead when Frank recommends your product to Joey, but then Joey recommends you to Dave and Kim and the effect, if not viral, is at least self-perpetuating.
But enough of this self-congratulation – what has this got to do with Net Promoter scores? Wikipedia describes Net Promoter scores (NPS) as a measure of customer satisfaction. In essence you ask your customers “How likely are you to recommend our company/product/service to your friends and colleagues? ” on a scale of 0 to 10 (0 is bad, 10 is good). Then add up the number of 9s and 10s (“promoters”) and subtract the number of 0-6s (“detractors”). This expressed as a percentage gives you your net promoter score. Anything above zero is good, anything over 50 is excellent.
So it could be argued – increases in NPS should indicate an increase in customers’ willingness to recommend you to colleagues and friends (assuming they have the channels to do so – a separate question) leading to lower marketing spend required. But how do you impact NPS?
I think this is actually an easy, obvious, yet hard-to-implement question. A dollar invested in marketing a poor product with poor support from a badly run company is a dollar thrown away – because you’ll never fulfill the promise made by your advertising. But a dollar invested in making your product, support, sales support, community groups etc great is a dollar invested in future free marketing and revenue.
But it’s hard to implement this because budgets for marketing and R&D are often quite separate. How do you divert the former to the latter? Not easily. Also note of course you still need to be spending on marketing – as I’ve said before you can have the finest product in the world, but if no-one knows about it you’re wasting your time. But invest that dollar in marketing your world-class product after you’ve made it world-class.
I haven’t said anything about how to increase your NPS but that’s because it will be different for every organisation. In most NPS surveys the recommendation is to follow up the initial rating question with “What didn’t you like about company X?”. Do the things people ask for! If they all love your product but hate your support, then that’s where to invest and so on.
The investment in quality you’re making here is an investment in reduced marketing spend in the future.
As a footnote, we run a big NPS survey once every 6 months with lots of “What do you like about us?”, “What don’t you like?” questions. It’s running as I write this and it’s all I can do not to peek at the answers that are in so far!
Many, many years ago I studied psychology and one of the most interesting courses I did was on development psychology – how we go from babies to infants to toddlers to children to teenagers to adults. The most fascinating lecture series was on Theory of Mind – the notion that, as we grow up we gradually realise that others around us have minds completely separate from our own, with completely independent thoughts (amazingly, this is only really fully developed in most people around age 11). Babies are born completely egocentric – they have no comprehension of entities other than themselves. And even 2-3 year olds are generally incapable of understanding that someone else might have a different point of view to themselves (the classic experiment shows how a 2-3 year old is rarely capable of understanding why an adult can’t see something he/she sees, even if that item is completely blocked from the adult’s view).
Anyway, the point is that there is a gradual shift from a wholly egocentric perspective (“I am everything there is the world”) to comprehending and respecting others’ independent points of view.
What has this got to do with competition and product marketing? Well I think this process (of “growing up” essentially) maps quite nicely on to how many companies grow up in their view of competitors to their products. Many startups and small companies (often in “incubators”!) are very inward-focussed. They concentrate heavily on their products and innovations and, yes, they talk to their customers, but competitors? If you’re lucky, you might see a random email asking “Has anyone tried out competitor X’s product yet?”.
As companies grow, someone might twig that “Hey, perhaps we should see what others are doing in this space!”. So perhaps some “Competitor sheets” get written and you might try out their tools, but you don’t really fear them and this still comes back to an egocentric point of view – the belief that from a customer’s point of view, you are the most important thing in the world – that they will see your products first, and only consider competitors as secondary also-rans. This is the toddler point of view – you know there are other companies out there, but you don’t see them as equals.
But what happens when you grow up? You realise you’re not the only one around. That there are competitors who sell products just like yours that might be better, faster, cheaper and, most importantly, that the customers out there have no inherent bias towards you as a vendor. There is a lot of brand loyalty out there, but this tends to be for specific products rather than a whole company (e.g. I’ll buy a Sony TV, doesn’t mean to say I’ll buy a Playstation).
And it’s dangerous to rely on the brand loyalty, particularly when you’re after new customers. The simple truth is that if someone has barely heard of you before, then that person will weigh up your offering against your competitors equally and you’d better make sure what you’re offering isn’t found wanting. Your competitor’s product is just as valid and attractive as yours.
Which is why we track competitors heavily at Red Gate. This includes things like:
News – announcements, new versions, new functionality and so on (including trying out new features when they arrive).
Company news – has someone just received $50m of funding for a research area you currently operate in? Worth knowing.
Their partnerships. That small player is less easy to dismiss when they’ve just struck a partnership with IBM to distribute round the world.
Twitter – are people talking about them? What are they saying? In what volume? NB: A lot of Twitter activity can be self-generated by publicity-hungry companies, so worth checking where it’s coming from.
Google Alerts – this is a general measure of “web activity” but can show things like:
Are people writing posts about them?
Are they developing a lot of support collateral and documentation themselves?
Is the competitor product very buggy (for example, in the tech world, many ask for answers to problems on Stack Overflow). NB: if there are a lot of questions about a competitor product this means both that it’s popular and that it might have bugginess problems – worth reading what people are asking.
Another interesting point about keeping an eye on activity, is that it gives you a crude measure of where in the hype cycle a particular product is. Gartner produce a very interesting hype cycle each year for emerging tech (in essence, is this product/tech just hype or are people really using it):
(NB: I love the term “Trough of Disillusionment”!).
The following two (anonymised obviously) charts are for two different competitors of ours:
Competitor A
Competitor B
These charts show the number of tweets and alerts for each competitor each day.
Competitor A doesn’t get much Twitter activity – may be the early adopter hipsters aren’t tweeting about it on a daily basis. But, there are lots of alerts for the product, most of which are on Q+A sites, users asking questions about “How do I configure X?”, “How does Y work?”.
Competitor B isn’t doing so bad on Twitter. A steady stream of activity, particularly over the last few weeks. But, for alerts, it’s all very quiet. And, if you look at what the actual tweets are, most of those come from the vendor themselves.
So for competitor A, this is likely to be a product late in the hype cycle – i.e. people are actually starting to use it! Competitor B – it’s all still hype. I’m more afraid of competitor A than competitor B..
Anyway, we as an organisation have grown up and take a lot more notice of the competition nowadays – and we don’t assume a customer will always buy from us instead of them (despite us being better ? ). Would you say the same?
Hard to miss it, but two next-gen gaming consoles were launched just before Christmas – Microsoft’s Xbox One, and the Playstation 4.
Normally this sort of thing would pass me by (I’m not a big video game fan – they just seem like complete time vampires), but something I noticed was how interesting the two launches were as marketing exercises.
Both did very heavy outbound marketing. At the Xbox launch, you could barely turn the TV on without a slick Xbox ad being shown, the advertising was anywhere you looked, there was an extensive roadshow and they had a very heavy Twitter presence (lots of updates about features, events, sneak peeks at functionality, that sort of thing). All this was great, and the PS4 did something similar. But that wasn’t what I thought was so interesting (in fact, both campaigns felt extremely well-honed and professional, as you’d expect – but perhaps a little too predictable and dull?).
What I thought interesting, was how differently the two consoles were positioned. Or more specifically, how differently they were trying to position the two consoles in the customers’ minds. Put simply, the Xbox One is obviously trying to position the console as a unit for the family living room. Yes, it has zombie killing games, but that’s only part of it – there are fun games for the kids and the family, video and music functionality (including film hire), the Kinect (advertised as “Now can detect up to 6 people” – i.e. a family), HDMI pass-through and so on.
Look at the PS4 tagline – “This is for the Players”. They’re going straight for the hardcore gamer. They’re pushing on the processor power, the superb, but adult-focussed game range, it’s reputation as the “player’s” console and so on. There’s an equivalent to the Kinect, but it’s a bit of an afterthought (and doesn’t come in the box – hence why the PS4 is that much cheaper), and of course the PS4 can stream videos etc and play Blu-rays, but that’s barely mentioned in the ads. Additionally they’ve much more of a deal of supporting indie game shops, hoping to get more interesting and diverse a range of games.
That’s why the arguments about “Which console is best?” are rather tiresome. They’re targeted at different groups, and have different functionality to match. If you’re buying the thing so that the kids can play a dancing game on Kinect, do you care if that’s rendered at 1080p or 720p? But if you’re buying something to feel the thrill of hi-octane car chases, that frame rate really matters.
The important point I wanted to draw out here though, is that it’s not just about the marketing – it’s about the product too. If the consoles were more or less the same (and there are sooo many similarities!), then marketing them differently would just be that – fine, but perhaps not enormously impactful.
But in fact, the machines themselves are very different – Microsoft made a big decision to include the Kinect in the box, significantly increasing their launch price. Additionally, the PS4 doesn’t play music CDs in the Blu-ray player (though coming soon apparently). These are two product decisions (amongst others) that I believe would have followed on from a marketing decision about how the Microsoft and Sony wanted to position the consoles for particular markets. By making big product development decisions based on this sort of market research, you end up with a much stronger proposition for the market. It’s not just an ad telling you that the PS4 is better for gamers – this is backed up by what you’re buying. The processor is faster (in certain circumstances ? ).
It’s a simple example, but I think a useful one. For me, personally (not a big video game fan, has kids, wants a way of accessing decent TV through a console) the Xbox One is much more attractive. But when I mention this to the avid gamers at work, I’m laughed at – how can you even consider not buying the PS4? (NB: Microsoft’s terrible PR last year about stopping customers selling games second-hand really didn’t help..). But we’re very different customers looking for very different things.
I think both consoles will do well, but likely in the different markets – both have been positioned cleverly, but most interestingly – they’ve obviously listened to their marketing department to determine that product direction, to make sure each ends up with the best product to actually fit their respective markets.
Everyone who works in marketing and product management should be spending as much time as they possibly can with customers. Period. This is, of course, a bit of a bland and obvious statement (like all those marketing books that promise so much and deliver so little!) – we know this, we don’t have to be told again! But perhaps we do need to remind ourselves of why it’s so important, why it’s so dangerous to let this activity slip.
I’m currently out in the US working the booth on a tour our company runs (called SQL in the City). This is a fantastic series of events which, at a first glance looks like our company just wanting to give something back to the community – free training, free books, giveaways and so on. And this is true: this is what we’re doing, and is a primary motivator for the tour because we believe (and I personally believe this very strongly) that supporting the community in a simple and altruistic way is one of the strongest feeders for the top of the funnel for our company.
But a slightly more cynical person might suggest – “Hang on, isn’t this just a sales and marketing event? You’re just pushing product!”. And this is also true: obviously we’re using this as an opportunity to talk about our latest products, what we’re doing next and to show this to customers. And this is fine – there’s no bait and switch here, customers don’t mind us talking about this because 1) We’ve been upfront that we will do so, and 2) Because our products are great (I was once told that the big advantage of working in marketing for a company with great products is that “You’re just providing the opportunity for customers to find and use your wonderful products – they should be thanking you!”).
But there’s a third reason, which we don’t really advertise and is, for me, the true value of the events – staying at the coalface with customers. Over the last 3 days I’ve probably spoken to around 40-50 customers, and I’ll speak to another 20 or more on Monday. I’m speaking to them about what we’re doing now, what we’re doing next. I’m speaking to advanced early adopters/innovators* about our vision for what’s to come, late/early majority people about current new products (“What do you think of this?”), and skeptics about existing and older products that have been tried and tested by thousands. I’ve talked to people in different industries, at different levels of seniority and there are even variations in viewpoints by geographical location.
And, as ever, this has just been fabulously useful on a very practical level. Every time I speak to customer I adjust, refine and improve my perspective on what we should be doing. Sometimes these are very subtle nudges (“Mm, may be that idea for product X isn’t quite as simple as I first thought”) and sometimes quite big changes (“I’ve really overestimated how sophisticated late majority people in finance are, for these features – I need to re-think our whole marketing approach there”). One very practical and specific example from yesterday – we’re thinking about providing training packages for some of our products and I ran this past someone currently (not) working for the Federal Government. He told me that, for his department he can easily get budgetary approval for training – not a problem. But that he will never get approval for travel and hotel expenses. So for him, all training has to be onsite at his office (for which he can easily get approval), even if it’s more expensive than doing it somewhere else. This was something I had no idea about before yesterday.
But there always tweaks and adjustments, always. And if you’re not speaking to customers all the time, you hit the significant problem of drift. This is the phenomenon where you start with a really great idea for a product (hopefully from talking to customers historically), and then you start to talk about and “develop” the idea back at the office. So you start with a great use-case (“I’ve just spoken to 5 law firms who say they really need something to automatically read paper documents, perform some OCR and store that data in a database”). You take that back to the office and start throwing it around – what if it did more than that? What if it classified documents as well? What if it provided some interpretation on top? What if it worked for multiple languages? What if it could store the data in the cloud? Etc etc. All great ideas I’m sure, but what would the customers think of the final product? Imagine taking this behemoth to a customer and his/her response being “Erm, I just wanted something cheap to scan in my documents – what’s all this complexity?”. Better to find this out earlier rather than later. Better to make small course corrections as you go along by re-forming and re-shaping the offering with customer input than only finding out at the end that you went way of course somewhere. NB: This is actually just a reflection of the standard Agile approach to product development – the second principle of the Agile Manifesto is:
Welcome changing requirements, even late in development. Agile processes harness change for the customer’s competitive advantage.
How can you make adjustments to your requirements if you don’t know what the customers want?
So, nag over – go and see your customers. Go to a conference, call one of them up, take part in forums, email (though it’s a poor substitute for face-to-face), anything.
* for definitions of these groups see Geoffrey Moore’s Crossing the Chasm – the 101 book for tech marketing.
The book Competing on Analytics by Thomas Davenport and Jeanne Harris is a short but very interesting read about the need for organisations to significantly improve their analytical capabilities if they want to compete in the modern marketplace. The argument, quoting directly from the author is that:
In today’s global and highly interconnected business environment, traditional competitive differentiators-like geography, protective regulation, even proprietary technology-are no longer enough. What’s left is the opportunity to execute a business with more efficiency and effectiveness than your competitors, and to make the smartest business decisions possible. Analytics can help do this.
I.e. unless you are implementing and using advanced analytics, you’re going to be left behind because you can’t use some of the traditional differentiators to keep any sort of advantage. NB: I don’t discuss Big Data in this post at all, as it’s more about the why rather than the how. But probably a post there for another time..
One of my favourite quotes from the end of the book is:
Analytical competitors will continue to find ways to outperform their competitors. They’ll get the best customers and charge them exactly the price that the customer is willing to pay for their product and service. They’ll have the most efficient and effective marketing campaigns and promotions. Their customer service will excel, and their customers will be loyal in return. Their supply chains will be ultraefficient, and they’ll have neither excess inventory nor stock-outs. They’ll have the best people or the best players in the industry, and the employees will be evaluated and compensated based on their specific contributions. They’ll understand what nonfinancial processes and factors drive their financial performance, and they’ll be able to predict and diagnose problems before they become too problematic. They will make a lot of money, win a lot of games, or solve the world’s most pressing problems. They will continue to lead us into the future.
What a great place to be! But of course it’s not as simple as that. So below are a number of tips I’ve picked up from trying to implement this sort of thing over the years, or watching clients trying to do this as well.
1. Fit the implementation to your real needs. One of the first things to note is that a lot of the examples of success that they give in the book – Amazon, Netflix, Google and so on – are big companies. These organisations have millions of customers and, at that scale, the benefits of well-embedded customer analytics are obvious – Tesco Clubcard is another great example of significant profits generated through analytics.
So firstly, I think it’s a bit of a struggle implementing many of their ideas when you’re running at a much smaller scale – even if you thought it beneficial. One of the companies I worked at a few years ago had a total potential market of precisely 29 companies. If we wanted to know anything about these companies we didn’t look to data analysis to understand patterns of behaviour, we went to see them and asked!
2. Start Simple. A second more subtle point here though is about making sure you pick off the low hanging fruit before moving on to anything advanced. One of the questions I was asked at a job interview a long time ago now, was to do with detecting fraudulent activity on bank accounts. The question was “If we gave you the data showing the amounts going in and out of a bank account each day for the last 3 months, what’s the first thing you would do to try and spot fraudulent activity?”. I’d just finished a maths course 2 months before, so I launched in to a tirade about algorithms for picking out outliers, spotting complex patterns in the data, weekly seasonality calculations, de-trending the data and so on. After a few minutes of this, the interviewer interrupted and said, “Mm. I’d probably just draw a graph and see what was there”. I did manage to get the job in the end and found out that a reasonable proportion of the “advanced analytics” needed to detect banking fraud was really very simple algorithms to spot outliers, pretty close to what you’d be doing by eye (think “3 standard deviations away…”).
An example from the world of marketing – you might be trying to figure out “What type of customer in our CRM system is more likely to stay with me long term, continuing to buy products? (i.e. high LTV)”. There might be a lot of subtle factors here, but there could be some real no-brainers. For example, I’d suggest that customers who have spent a lot with you in the first 3 months are more likely to spend a lot in the future (because the initial spend is indicative of certain levels of budget and/or appetite for your products) compared to someone who spent very little. Of course you have to test this in the data (because it could be completely wrong – see the quote at the end about the blocks to implementing analytical thinking), but if you wanted a simple model for “Which accounts should we spend more time with?”, a simple binary model of “Spent more than $100k with us” vs. “Spent less than $100k” might be a good first start!
3. Get some early wins. There is always a (not completely unreasonable) objection to analytical marketing along the lines of “This stuff is all well and good, but if we spent more time just putting together some great ads, some great messages, reaching out to the community, running some great promos etc, then the money will flow. We’ll worry about analysing the detail later on”. Sometimes this comes from a certain mindset (again, mentioned in the quote below), about “the power of ideas over data”. Sometimes it comes from seeing failed implementations. I have a lot of sympathy with the latter – it is very easy to spend an enormous amount of time and money on this sort of project – time that could be spent elsewhere in the business – and see precisely no advantage at the end.
One way of combatting this problem is to make sure you get some early wins, even if these aren’t the primary purpose of your project. For example, you may have a vision of an all-encompassing CRM system that knows exactly the right email to send at the right time to the right customer (“Dave, we know you’ve been enjoying our product for 19 days now and that your boss, Helen, is interested in how the product could help her with regulatory problems in the textiles industry – here’s a whitepaper answering her questions and a quote for a price that I know exactly fits her budget for this quarter.”). But if you wait for utopia, without showing some earlier, simpler wins, you’ll be working for years battling off disgruntled executives with other priorities.. So better to pick an early problem where you know you can win. If you’ve never sent any segmented emails at all, then start with a simple opportunity (like sending different emails to new vs. existing customers based on some analysis) then prove that this has had a positive impact on either outputs (such as click rate) or (much) better still, revenue. Once you’ve proven positive return, then move on to the next stage with something a bit more clever. I’d use the phrase “Build success on success”, but it sounds far too cheesy.
4. Analyse off-line first, on-line later. There’s a great model for step-wise implementation of CRM analytics, along the lines of:
a. No analytics – purely transactional CRM system.
b. Offline analytics (e.g. showing that you need to treat new and existing customers differently), implemented manually (sending emails by hand once a week).
c. Offline analytics implemented automatically (e.g. above analysis embedded in to CRM/email system such that different customers automatically get the right emails. Or offline analysis shows that certain types of customers prefer particular products/prices, so these are hard-coded in the system),
d. On-line analytics, automatically adapting based on data coming in. For example, your initial model might say that “Customers who come in from Northern Europe are more likely to purchase product X” but, as data comes in, you find this changing over time. The models in the CRM automatically pick up that Southern Europe is now more likely to purchase product X, so automatically adapts to offer this product to these customers instead.
The last options is, for most, a complete pipe-dream, and can actually be quite dangerous. Therefore I’d strongly recommend a model where analysis is carried out off-line, on sets of data, then the conclusions from that analysis are proven online first. E.g. your offline work shows that customers in China are more price-sensitive than those in India? Implement this by just hard-coding different prices for the two countries and seeing how you get on..
5. Ignore all of the above if you’re working in a SaaS environment! A lot of the caution above stems from trying to run before you can walk. As I say, if you only need to sell 2 widgets this month to break a profit, your time might be better spent phoning up all of your potential clients, rather than analysing their behaviour to the nth degree. But – the SaaS world disrupts this approach. If you’re not analysing behaviour, interactions, price sensitivity, churn rates, click-through rates, conversion rates etc etc etc from the start, then you’re putting yourself in a very precarious position. Customer service and sensitivity to customer needs is everything in the SaaS world and if customers aren’t getting what they want, they’ll leave you and move elsewhere (the downside of easy adoption is easy rejection).
Hopefully some of these tips are vaguely useful. With regard to the book – it describes some interesting principles, and is good at a certain level (quite high level), though is a little short on detail. Nevertheless, I thought I’d end with my favourite quote, about the factors that hinder adoption of advanced analytics in organisations:
Gary cites four common factors that hinder analytical competition: deeply embedded conventional wisdom that has been around for so long, it’s hard to reverse; decision making-especially at high levels-that fails to demand rigor and analysis; employees themselves who are not willing or equipped to do analytic work; and the power of ideas over data.
Many of us will have come back after the Christmas break trying to think of new activities, new ideas and new opportunities for 2013. One of these is – is there some new product, proposition or market we could address, obviously with a view to expanding the addressable market, or creating new revenue streams?
Easy, surely? I’d suggest that getting this right is about the most difficult task for a marketing person. Why? Because there 1,000 factors that affect whether your new idea will fly or not, you can’t possibly hope to think of all of them, the ones you don’t think of could kill your proposition flat, and you might not be able to test the idea properly for some time. NB: I’m a big fan of failing fast with new ideas, but in the real world this is much easier said than done: can you truly test the viability of your product, till you’ve asked people to actually buy the thing?
Anyway, given this, what can you do to give yourself the best chance of success? From my experience of the last few years, your chances are increased considerably by reducing the number of perturbations from your core business, as much as you can.
By this, I mean that, for each new idea, you should consider how many different changes you are making to your core, successful business, with the new idea. The sorts of axes of change I’m thinking about are things like:
The core product,
The business model,
The people you’re selling to,
The type of customer you’re trying to reach,
Region,
Channels
And so on. Many of these have multiple sub-categories of course (e.g. business model covers many areas).
This issue is often described in product management circles as:
“Never propose a new product in a new market at the same time – do one or the other”.
And this is a good summary. But why is this a good idea? If your current business is selling CDs online to UK end consumers, and some bright spark in your company proposes some brilliant new idea, “Why don’t we provide an online data translation service for East Asia – I’ve just read an article about a great opportunity out there!” then, yes, this might be a fantastic idea in the abstract, but you are almost certainly doomed to fail in your attempts to address it. Why? Fundamentally because you don’t know what you’re doing and the number of axes on which you are changing your model are so great that the number of unknowns will be overwhelming. In this example:
The core product has changed from CDs to some new data service. How will this service work? What are the costs of running it? Do you have the skills to create this product?
Business model – you’re currently set up to acquire CDs from somewhere, sell them online then send them out in the post. What do you know about selling a SaaS model? How do you reach these people? How do you even run a business like this – who are the employees you’ll need?
It’s extremely unlikely anyone who might be interested in the new service will have heard of you, so your brand recognition is starting at zero.
You’re currently selling to end customers, B2C. What do you know about a B2B model? And who are the buyers and users in your target companies? What’s the hierarchy? Who influences who?
Region – UK vs East Asia. These are not the same.
Channels – all of your current channels to customers will be obsolete.
And so on, ad infinitum.
One way of representing these changes is with a cube:
What this cube also hopes to represent as well, is the point about the significant increase in potential pitfalls from changing on so many axes. If, conservatively, there were 10 things that could kill your new idea when changing along any particular axis then, if you just changed one of these things (for example, you started selling CDs in the US as well as the UK), then there are 10 obstacles (some you’ll know at the start, some you won’t), which you’ll need to overcome to succeed. But, if you change 6 things (imagine a 6-dimensional hypercube!), then the number of things that can scupper you is 10^6, or 1 million! For example, it may be that the specific way that Japanese customers buy SaaS data services is regulated in some way that you could never guess, and you would have never found this until it was far too late.
This is, of course, a massive over-simplification, which is why the image at the top is of Dürer’s Solid (something more complex than a simple cube*). It’s not nearly as simple as each axis being equal and having the same impact. I would argue strongly that your chances of success if you’re selling something to the same group of people is much higher than if you’re trying to do anything with a new group of people. Even if you’re selling your wholly-unchanged product to a brand new group of people, none of those people know anything about you, they have no trust in you and it’s going to take considerable work to convince them otherwise. In contrast, a group of people who know you well and have had good service from you in the past, will always be interested in what you’ve got coming up next.
Of course, this all shouldn’t hold you back from trying to think of great ways of growing your business, but I now try and confine myself to twists on an existing business. Currently selling in the UK? Try selling in the US. Currently offering a perpetual license? Try selling a monthly subscription (to the exact same people for the exact same product). Or currently selling a version of your product to large banks? Try a version for the tier-2 smaller banks. And so on. Once you get headway in your new market, then push along a 2nd axis, starting from your new stronghold.
* I know the analogy with Dürer’s Solid is weak, but I’m such a fan of Dürer that I had to find some way of crowbarring it in
First of all, I prefer the term “Personas” to “Personae”. Doesn’t “Personae” just seem pretentious, n’est-ce que pas?
Anyway, the point is, I’ve always struggled, over the years, to find personas a useful tool in marketing. I’m specifically talking about marketing here, rather than user-centred design – I know these are two sides of the same coin, but my main concern is with their use in marketing.
The process of creating personas has often been interesting, perhaps even fun, but then when it comes to the next stage – of actually using them in some way to drive marketing effort – they never seem quite right and they never seem very usable. I think they can also be slightly dangerous – if the process for creating personas hasn’t been cast-iron, then you can find yourself making messaging and positioning decisions based on, what – a few Google searches, chats with a couple of customers and a few internal meetings? Not really good enough!
So I thought I’d describe the process I prefer to use. A key part of this, though, is the end goal. For me this is:
Resulting personas should be strong enough that they are believable, simple and genuinely useful for sales, marketing, user experience and any other member of the team.
This seems a little vague, but the point is – the usual problem with personas is that a lot of effort is made, some big pictures of archetypes are printed on the walls… then everyone gets on with their jobs, ignoring the work that’s been done. A persona should be so strong, that the sales team members recognise that person perfectly, have just spoken to five of them that week, and keep referring to the persona, without being hustled by marketing or UX.
So, the process I use is as follows, and is actually very simple:
Start with some market segmentation. Don’t be tempted to jump in to personas yet, but start by trying to figure out a few basic segments for your market. There are lots of ways of doing this but, for me, the key point is to avoid personas at this stage. Why? Because it can bias your segmentation towards familiar and known archetypes, undermining the validity of your segmentation. For example, if you’d worked marketing mortgages for a living, and you’d always worked in the homeowner segment only, then you might be able to come up with a rich and powerful set of personas for types of mortgage owner such as “Young, stretched first-time buyer”, “30s affluent”, “Older, careful-with-money” and so on. These would be based on your biases about people you’ve encountered in your work. But what about Buy-to-Let borrowers? If you’ve never encountered them before, you wouldn’t even consider different BTL personas. It might be (I don’t know) that a quarter of all mortgages are lent to this group, and by missing out this group in your work, you’re forgetting to create personas for a key segment. If you start with a segmentation first, based on some real data, then you’ll be spending your efforts on persona creation in the most valuable areas.
Once you have your segmentation, take the largest ones of most interest (2-4, any more can get confusing) and create personas based on these. NB: It may be, in the above example, that you’re just not interested in Buy-to-Let borrowers. Fair enough, ignore them, but at least you’re doing that based on real data.
There are a lot of well-documented processes for creating individual personas. Your user-experience teams, if you have them, are likely to be of great help here. For me though, a guiding principle is that these have to be based on real people. I know this is obvious, but if the end goal is believable and useful personas, then these will only happen if you’re pulling out traits from people you’ve actually spoken to. In the example above, if you were trying to better define a “30s affluent” persona, you need to speak to some people in their 30s, who are genuinely affluent. Are they actually in their 20s, or 40s? Does age even matter? And do they feel affluent? What’s that based on? Then, when you go in to further characteristics (such as “Where do they go out?”, “What websites to they read?”, “What newspapers?”, “What sort of neighbourhoods do they live in?”, or whatever you’re interested in), these also need to be validated. It’s very easy to fall in to stereotypes here (“Go to the theatre”, “Read The Guardian” etc) but are these true or just projections of our own prejudices?
Once you have some interesting personas, the next stage is to then validate and adjust these with customers. This is why I call this post “Lean Personas”. Rather than spending months coming up with perfect personas, then launching these in your marketing, I think it’s a lot more useful to do an initial, decent job, then to test these against the people you’re talking to, whether on the phone, at conferences, or wherever. Obviously you can’t ask someone “Would you consider yourself a 30s-affluent type!?”. But you can ask, as background, “What papers do you read?”, “Where do you go out?” and so on.
Repeat steps 3 and 4 a few times, perfecting your personas as you go along. Of course you can start using these in early marketing, but the real value can often take quite a few months, if not longer – when you reach a point where your sales and other people are willingly using your personas to help them in sales conversations, and when you can classify people in to personas at the drop of a hat, because they’re so familiar and so right, then at that point, you’ve got some great personas going forward.
Good luck. I’m about to embark on this exercise myself, so I’ll write up how I get on!
