I’ve been working with a lot of companies over the past couple of years developing social media platforms and programs.
One trend that seems promising is that I’m dealing with a decreasing number of IT folks acting as gatekeepers for marketing technology projects. I attribute this mostly to the rise of Software as a Service technologies that eliminate the complexities of integration, and allow marketers to focus on marketing strategy and execution.
I’m also seeing a growing number of tech-savvy marketers finding their way into strong influencer and decision-maker roles, which is also promising.
What I don’t see yet, and it’s a little troubling, is a faster pace of agile execution. I know the speed of change in the marketplace is confusing—there are always new platforms, new technologies, new opportunities, and it’s hard to keep up—but it’s been this way for the past 20 years. Today it’s social media, but yesterday it was CRM, and SFA, and CMS, and SEO, you get the idea. It’s time marketers adapted to the environment with strategies for leveraging new technologies in ways that minimize risk and maximize potential. Instead, there’s still far too much paralysis of analysis.
In the last year alone, I’ve consulted on three major projects that included many months of detailed research, planning, long meetings, and zero execution. One company invited me in a year ago to help them react to a competitor that was making major innovations in social media and attracting customers to hang out in their community groups and events. The client was terrified they were losing a major battle front that they hadn’t seen coming. But they couldn’t make a decision about how to respond.
Despite following strong processes to identify business objectives, critical success factors, use case scenarios—everything in the business consulting toolkit—they couldn’t bring themselves to the point of actually doing something. Even something small, which I advocate strongly as a low-risk way to get the ball rolling. Today, the division I was advising is being sold off. Would social media have saved them? No, but I think their approach to the challenge was indicative of the deeper problems that defined the struggling business: an inability to take decisive action and do something.
The two biggest hurdles to taking action that I see among marketers are technology selection and program ROI. These two issues can stall marketers for months while they research vendors and try to come up with a compelling business case for a social media project. So in the interest of speeding marketers along the path to productive development, let’s destroy these two hurdles. It’s easy.
On the technology selection front, just adopt this simple truth. You are going to fail. So get it over with as quickly and cheaply as you can. The more time you spend planning some monumental RFP for an overarching social media platform, the more costly and crushing your failure will be.
Marketers instinctively know this, which is why they get caught in paralysis of analysis—anything to delay the point of impact. But you can reduce the risk and cost substantially by dramatically reducing the scope of your initial project. Instead of buying a platform to serve your entire customer base, start with one component and serve a test group of selected customers.
There are dozens of low-cost, trial and open source social media components. Determine what form of interaction you think might ignite the community you want to build, and choose a low-cost component to test out your assumptions. It could be a blog. It could be a forum. It could be a small social network. Keep your test case on a small scale and use the project to learn what works and what doesn’t for your community. Your failure won’t look like failure, it will look like agile and intelligent prototyping. And because the cost is low, the worst anyone can say about it is that it didn’t work. But now you’re smarter.
Destroying the ROI hurdle is just as easy. If you don’t already have a clear case for ROI on your project, there isn’t one. If you’re planning a social media marketing campaign to drive customer acquisition, then chances are you already know how to calculate the ROI. If you’re trying to build a community, or drive more market engagement, forget about ROI—you’re in the domain of Brand Equity, and it will cost you more to measure it than it will to get started building something on the cheap.
Don’t get me wrong. I’m not saying you can’t measure the value of social media—but ROI is usually the wrong metric, and it’s become a reflexive road block among marketers who are afraid to take action. I don't want to be flippant about this, but marketers need to bring a little balance to the justifiable demand for performance accountability. We do need to be accountable, and we do need to show that we've thoroughly vetted the investments we're making. But when you're in a competitive market that demands innovation, you have to get in the trenches to help innovation along, instead of just throwing up signs to every project that doesn't come with a business case tied up in a neat bow.
The best approach I've seen from a marketing group that needs some space to innovate is to allocate a percentage of their budget to emerging marketing programs—anywhere from 2 to 10 percent depending on your taste for innovation, but I recommend 4 percent as a guideline. Boards that are spouting wisdom about innovative cultures can put their money where their mouth is by sanctioning a small percentage of the budget for programs that may not have a clear cut metric for ROI. Having a dedicated budget then puts a greater focus on how programs are selected, and how performance against business objects should be measured rather than just a slavish devotion to fitting innovative programs into an expected ROI mold.
If your program sponsor or CFO is stuck on the lack of demonstrable ROI, even when you’re putting forward the kind of low-risk, low-cost project we’re talking about here, then let them know there’s another important metric you’ll have to face up to in the future if you can’t find the space to innovate: opportunity cost.
March 24, 2008
What's wrong with a cost-per-lead budget and why less leads is better
A reader asked me to explain why fewer leads are better and why “cost-per-lead” budgets fail. These are two great questions that have the same fundamental answer: quality first then quantity.
The truth is that sales people care very little about the cost of the leads we generate. What they really care about is how many of those leads will actually become viable sales opportunities.
For this reason, I think cost-per-lead measurements are irrelevant unless we can answer another fundamental question first, “What is our rate of lead acceptance (a.k.a. sales pursuit) into the sales pipeline” and then “What is the cost per opportunity?”
Sadly, I find that a lot of marketers tend focus on cost-per-lead because they really don’t know what happens to their leads after they hand them off to their sales team. This is why closed loop feedback and lead management are so important.
B2B Marketers must start measuring cost-per-opportunity now! Why? It’s the one metric that can help you understand how well your sales team accepts and pursues leads. Ultimately, it shows if your leads are actually helping our sales team sell and if we’re positively contributing to their pipeline.
Lead acceptance into pipeline is primarily a function of lead quality. There are other influences such as sales training and refining the lead handoff process, but lead quality stands out as the single largest factor driving the real ROI of our lead generation programs.
In a cost-per-lead model there is a tendency to drive down the cost of each lead by generating more leads, which is good if the quality does not suffer. However, this is rarely the case since there are a finite number of high quality sales ready leads in your target market at any given time.
The real question is, “Are these leads helping our sales team sell more and will these leads become profitable customers?”
In most cases in order to get more leads to sales (as they demand more leads now!), marketing is forced to send early stage leads, often at the inquiry stage in order to meet quota or cost per lead requirements. Of course, the need for more leads does not come with a commensurate budget increase!
Simply sending more leads over the fence to sales will only result in more early stage leads being lost, ignored or discarded. And if your early stage leads are not being cultivated with lead nurturing and given the attention they need, they will go to waste. Unfortunately in a cost-per-lead scenario this waste will not be measured, rather only your lead production costs.
There is no doubt that a cost focused mindset is a lot different than a value driven mindset. The cost focused mindset often drives decisions that are arbitrary to the objectives of a lead generation program. The most valuable leads are those that your sales team can convert to viable sales opportunities, not just leads that drive more activity.
Pushing more leads and creating more activity can give marketers a false sense of security in the short term, but in the long term the cycle of failed campaigns will continue as past failures are dismissed, overlooked or as fingers are pointed. To break the cycle, we must close the loop with sales and start measuring opportunities.
The following are real-world metrics that every marketer should track in their lead generation program:
- # of inquiries?
- # of leads? (qualified as "sales-ready")
- # of opportunities (leads in moved into sales pipeline)?
- # of closed deals from marketing leads?
If you know those metrics you can start to track the following key performance indicators:
- Inquiry to lead ratio
- Lead to opportunity
- Lead to proposal ratio
- Lead to sale (win) ratio
A value driven mindset requires leaders and marketers to plan and budget for the long term and to take a more holistic view that goes beyond cost-per-lead budgets. Cost-per-lead budgets are irrelevant unless you can first measure cost-per-opportunity or cost-per-lead-pursued and lead quality is a key driver in insuring that those leads are pursued.
What do you think about cost-per-lead budgets or sending fewer high quality leads to sales people?
March 19, 2008
The Reason Most Writing Is Never Read
Have you ever wondered, “Who reads this stuff?” Or how about, “Who wrote this awful copy!”
I have to admit that MOST of what I read literally bores me to death (my 1-second attention span doesn’t help!).
However, every once in a great while, I happen across something that grabs me by the eyeballs and won’t let go.
Here’s a few thoughts on why most content is rotten and the elements of engaging writing:
First let’s talk about the rubbish. Here’s what’s wrong:
- Immediate sale: Bad writing gives me no reason to stay engaged. Rather than easing into a topic, it simply assumes the reader is ‘up to speed’ on the topic at hand. “Get the Remco hair remover now by calling 800-We-Need-Your-Money.”
- Long winded: Remember those boring textbooks that had paragraphs that spanned multiple pages. The brain is wired for breaks and that’s why we have a carriage return on our keyboards. Try having a conversation with someone who can’t get to the point and you’ll understand why long paragraphs are boring!
- No logical flow: This may seem simple, but a story has a beginning, middle and an end. Too often poor writing is missing one of more of these basic elements. If you are selling video software, begin with the challenges faced by video folks, talk about how to solve the problem (the middle) and then tell reader’s where to buy the product (the end).
Here’s what is present in great writing:
- Stories: Trends, problems, history, examples and scenarios all help people understand and relate to your writing. Try and weave these throughout your work to keep people engaged.
- Lists: Especially in business writing, a list or bulleted sentences are very easy to read, create lots of white space and help organize complex thoughts.
- A tease: How about opening your work with a compelling statement or a few questions that bring the reader into your document. Works every time for me!
- Shorter paragraphs: Even a single sentence can become a paragraph. Try mixing up the length of your paragraphs, helping the reader speed through your work.
- Simplicity: Saying it with less words is always harder yet appreciated by readers. “She glared at him and said, ‘This is the last time I ask you!’ Little Johnny swallowed hard as the cold rice cereal began disappearing from his bowl.”
Let’s hear from you? What makes writing wretched? What are elements of eloquent writing?
Corporate Integrity and the Role of Marketing
One of the bright spots in IT spending today is enterprise software and services that support the alphabet soup of compliance regulations (SEC, SOX, PCI, HIPAA, FISMA, OSHA, etc.). One of our clients, SAP, is doing a great job capturing share as the market for governance, risk, and compliance (GRC) software is expanding rapidly. Perhaps one of the key motivators for this growth is fear: fear of facing stiff financial penalties and/or even prison sentences for non-compliance.
Examples in the business software industry alone include, Computer Associates’s execs being jailed for SEC violations and McAfee facing a $50M penalty for accounting trickery. But compliance is actually further down the Maslow hierarchy of needs. Corporate integrity would be a higher rung which calls corporate managers to “do the right thing” and elevate the organizations’ contribution beyond its immediate stakeholders.
One new voice on the topic of corporate integrity and accountability is Donna Kennedy-Glans, author of "Corporate Integrity: An Toolkit for Managing Beyond Compliance.” I met her at the SAP GRC conference in Orlando, Florida last week, and found her an engaging and credible speaker. I highly recommend her book because her tools and templates make integrity measurable and actionable. I especially recommend applying her “Integrity Ladder” and “Integrity Grid” tools which can help organizations set clear objectives for integrity and pinpoint areas for organization changes that can help move it up the integrity ladder if that’s an explicit corporate goal.Donna nicely illustrates how each department (finance, HR, legal, operations, etc.) plays a critical role in acting with integrity. What was missing for me in her book is the role of sales and marketing in corporate integrity. Perhaps it’s contained in “operations” or embedded in public relations which is often invoked for damage control after the fact. I would build on her case for corporate integrity by having sales and marketing execs consider the following questions as a checklist for your own corporate integrity contributions:
• Do you just comply with CAN-SPAM laws which protect people from unwanted mail or go beyond by finding ways to build trust with customer prospects through nurturing campaigns?
• How close is your customers’ post-purchase experience to the promise you set in the pre-sales phase? The bigger the gap the bigger the “out of integrity” customers will perceive between what you told them and what you delivered.
• How does your organization handle loss or failure? A company’s true colors often come out in adversity such as in a product failure or loss of a customer to a competitor. How well do you show your management team the links between product performance, customer retention and brand reputation?
• What actions build or diminish brand reputation? How strongly do you advocate for brand building outside the typical marketing tactics of advertising and PR? For instance, do you push for investments in the product development phase that would improve customer satisfaction, your suppliers’ contribution to your brand, reduce warranty returns, etc?Finally, I personally believe that integrity is as much about “being” as it is about “doing.” Donna spends much of her book on “doingness” which is perhaps exactly what we need in this era of leadership lapses, malfeasance, and disappointing behaviors. But I would like to think that corporations and individuals can always be inspired to be honorable. After all, as Donna points out in attributing Socrates, integrity is virtue. It’s time we valued this virtue more. Behaviors will follow.