Several weeks ago I wrote about the financial crisis and its likely implications for the business of marketing. Beyond the direct comments on my blog, I got a lot of bemused and even dismissive comments by email. At the time, the Web2.0 conference was in full swing in New York, and most of the chatter was around exciting new technologies, not so much about the stock market. What a difference a few weeks make.
We've had collossal bank failures--WaMu and Wachovia--a $700B Wall Street bailout, and the single largest one-day drop of the stock market, more than 9%, followed by an insane roller coaster of highs and lows. That's just the surface stuff--not getting into interbank lending rates, credit markets, Fed liquidity and foreign capital flight. The past few weeks has seen direct news of the ripples hitting our own industry with layoffs starting in advertising and media.
All of this, of course, is only symptomatic. As the CEO of a social media technology startup, SocialRep, I depend on sales, credit and investor funding to keep the business accelerating down the runway. In the past few weeks, one of my major prospects, a company in the financial sector, went belly up rather suddenly--eating up weeks of energy, time and investment to close a deal. Many of my other prospects are visibly slowing their spending--holding back on any outlay of cash until they can see where things are headed. The limit on one of my credit accounts was cut back, leaving me a lot less breathing room. On the VC front, the impact is also evident--even though many VCs have large funds, they're slowing down dramatically and being more careful in their investments, waiting to see who has what it takes to survive a downturn.
These are all serious signs of a market slowdown that goes way beyond Wall Street--right to our own front doors. When banks stop lending and credit dries up, it's like running out of gas. But I didn't write this post to spread doom and gloom. While we're in the early stages of what may be the biggest market correction of our lifetime, this is all part of the cycle.
It's the nature of systems--part of the very process of organizational advancement and evolution--and many of the most important transformations of social and economic systems can only happen through disruption. The larger the disruption, the greater the capacity for fundamental change. Everywhere you look where we try to control and minimize the natural cycle of systemic disruption, we wind up only delaying--and often increasing the magnitude--of the eventual, inevitable disruption.
Consider the forest fire. We spent decades trying to control and minimize forest fires--Smoky the Bear!--only to discover that we were inadvertently causing a massive buildup of dead underbrush and fuel, making the eventual, inevitable forest fire far more powerful and destructive than the smaller fires that used to happen more frequently.
We've done something similar in our economy. We've leveraged our assets through credit to unnaturally extend and sustain a supposedly endless cycle of prosperity. We used equity and credit to go beyond our paychecks to buy lots and lots of stuff, and the economy grew unnaturally--like some genetically engineered 1000-pound pumpkin. But we leveraged our prosperity on something unsustainable--housing prices. And when we finally reached the headwinds that pushed prices down, the whole thing began to unwind. If you don't have any more equity and credit to buy lots of stuff, the economy slows down. But it's worse than that, because now you have to divert your paycheck from buying even the important stuff to pay down the credit bill, so the economy stalls even more. That we're seriously floating major legislation to try and prop up the underlying housing prices and credit is not surprising, but it's not comforting. It's as if we're saying, uh oh, bigger fires? Let's clone an army of Smoky the Bears, and stop fires once and for all. The whole premise is simply not credible. The decline, the disruption, however painful it may be, however we may be able to attenuate some of its worst effects, is a natural part of the system. Not only can we not avoid it. We literally can't grow without it.
Once you understand that reality, get past the denial, you have a clearer view to what it takes to survive and even thrive in transformational chaos.
Speaking dispassionately, the role of disruption is to challenge the system and eliminate weaknesses--to burn out the deadwood and disease. Once that happens--assuming the system wasn't so diseased that it collapses entirely--there's an opportunity for reorganization and redevelopment, an advancement to a higher order of organization.
From an American perspective, we have seen this cycle play out in marketing for well over a century. Some of the cycles of disruption and reorder have been dramatic, some more subtle. We've seen marketing evolve through cycles that defined marketing by distribution, merchandizing, personal selling, mass markets, mass media, branding, database marketing, internet marketing and most recently social media, just to name some of the most obvious transformations. Some of those cycles were driven most by innovation--radio, TV, computers, networks--others were driven most by disruption--two world wars, the Great Depression, regional wars and countless smaller recessions.
I watched this cycle play out directly during the Dotcom boom and bust when I was president of an agency in San Francisco, and I'm anticipating that we'll watch it all play out again, but this time on a larger scale, with greater disruption, and with greater impact on the reorganization of marketing as we rebuild. The cycle is predictable, but it's not orchestrated. It happens through a process of natural selection, driven primarily by short term business objectives. So here's my 2-cent prediction on the mechanics of this correction.
Companies are already starting to feel the liquidity squeeze, and their first response will be to hold off on any new expenses. This will ripple out and return as a drop in orders and an increase in selling cycles, making the liquidity crunch tighter. After cutting programs, the more aggressive companies will start layoffs. Layoffs ultimately will disproportionately affect marketing, as companies focus more intensely on short-term sales efforts. At this point, we'll see a large number of senior marketing executives and managers retired--they're expensive and their contribution is more strategic than the short-term imperative to close deals. Marketing will be redefined functionally as sales support and lead generation, and marketing directors will take over the day-to-day reins. Most companies will retreat into this relentlessly sales-driven mode until the bleeding stops and markets stabilize.
At this point, the natural selection shifts from who and what gets cut to who and what gets selected for stabilization and growth. Companies still have to compete, and they'll look for ways to gain a market advantage. The focus early on will be disproportionately on demand generation. Budgets will move to more highly measurable marketing programs, fueling a tidal shift towards digital media.
Marketing directors who have grown up with technologies will explore emerging tools that improve lead generation and campaign performance.
Vendors and startups who weren't overly leveraged before the drop will aggressively innovate new technologies to feed the hunger for cheap and efficient lead generation. But all of this will happen against the backdrop of a new, accepted foundation of social media technology. All of the Web 2.0 hype will have long since burned away, and the useful stuff--the components that help companies connect more effectively with customers to provide the products they want and need without all the bloat of inneficient product development and promotion.
This, ulitmately, is the evolution imperative that will be at the heart of recovery. An evolved paradigm of media--no longer a fight between broadcast and social--but an integration at the foundational level based on what allows successful businesses to advance. It won't happen by design. It won't happen by chance. It's the natural direction of the system, and the massive disruption caused by the financial meltdown is only the catalyst.
Personally, I'm convinced social media is going to be woven into the fabric of the new marketing infrastructure. Suffice to say that it's not "true belief" on my part. I've written and spoken about this in the past, that the media paradigm we've known all our lives and accepted as the norm is in fact a bubble that is bursting. The historical status quo has always been word-of-mouth. Technology simply evolved in a way that disrupted the status quo and put control in the hands of a few, primarily because of the expense of technology-based communication. But technology is now commodity.
Communication has returned to a higher level of democratization. And now we're seeing the media bubble burst, right at the same time we're seeing a more acute economic bubble burst along with it.
October 21, 2008
Top 10 Blogs for Writers - The 2008/2009 Winners
This is the year of the writer! With literally hundreds of nominations pouring in, this year’s 3rd annual competition was intense. The 37 finalists have been carefully examined, with the greatest weight on the quality of their content. What follows are the top 10 blogs for writers.
If you’re a writer, you’ll find daily doses of inspiration and discovery at these excellent blogs:
- Copyblogger: As the undefeated champ, this blog has held the number-one spot for three straight years! The baby of Brian Clark, this blog keeps winning because of its excellent and educational articles.
- Men With Pens: James Chartrand and Harry McLeod are the dynamic duo who continue to deliver rich content and community discussion.
- Freelance Writing Jobs: Founded by Deb Ng, this site is the first stop for freelance writers seeking new work and great articles (and it remains a top winner since this contest began).
- Write to Done: This blog delivers a steady stream of excellent articles for all writers and is the product of top blogger Leo Babauta.
- Confident Writing: Looking for encouragement? Joanna Young will help you take your writing to the next level.
- The Renegade Writer: Linda Formichelli and Diana Burell, authors of a book by the same name, help freelance journalists find inspiration.
- Remarkable Communication: One part writing, one part marketing and one part selling, this excellent blog by Sonia Simone will help any writer succeed.
- Writing Journey: Looking for a great stop on your writing journey? Bob Younce’s blog will refresh and energize you.
- Freelance Parent: Two moms, Lorna Doone Brewer and Tamara Berry, provide excellent perspective on writing while balancing time with little ones.
- Urban Muse: Susan Johnston covers a wide range of excellent topics that all writers will enjoy.
- Refine the universal lead definition of “sales ready.” It’s imperative that both marketing and sales agree on the definition of a lead. Each time you hire new staff, use that as an opportunity to visit the definition again.
- Qualify leads based on universal lead definition. When you qualify leads against a universal lead definition you’ll get higher lead-to-opportunity conversion rate and start to overcome some friction.
- Nurture early leads until “sales ready.” This is where marketers can apply a measurable process to create relevant, consistent dialog with viable potential customers. Position yourself as a reliable resource for folks and when they are ready to buy, they will come to you.
- Define hand-off process from Marketing to Sales. Make sure leads are sales ready, confirm that leads are ready to speak with a sales representative, and provide qualification information for each lead. Agree on a turnaround time to get feedback from sales. Study the documentation process chart included in the Webinar. It shows the steps a lead should go through from marketing to sales.
- Close the loop via Sales and Marketing “huddle.” Huddling once a quarter is not enough. Examine often what’s working and what’s not working. Know the status of every single lead at all times.
- If you're promising your customers that you're fast and efficient, make sure your legal contracts don't take months to complete
- If you're promising value, make sure your implementation does not cost them an arm and a leg in IT resources
- If you're promising peace of mind, make sure you're payment terms reflect that as well
Congratulations to the winners. Be sure to check out these awesome blogs!
Of special note: The top 3 blogs in this contest were within 1 percentage point of each other, making this an exceptionally close race. I have been impressed at the quantity and quality of blogs for writers that have emerged since we began this contest three years ago. I encourage all bloggers to take a close look at what the above blogs are doing.
Lead Management Playbook that Increased Sales Pipeline by 200%
Why do so many companies struggle with the lead generation process? Simple. Even the very best lead generation program cannot compensate for poor teamwork and collaboration. You can actually achieve major ROI gains by optimizing a just few key aspects of your lead management process.
I just finished up the MarketingSherpa Demand Generation Summit in Boston where I was given the opportunity to present my ‘Playbook for Effective Lead Management.’ And, we’re doing it all again in San Francisco October 26-28. Check out the full agenda. hope you can make it. Netline (who brings you the Inspire blog and Smart Marketers newsletter) is the "Welcome" sponsor at the Demand Generation summit. I hope you can join us there.
If you attended MarketingExperiments’ recent Web Clinic on September 24th you've already got a glimpse of my five-step ‘playbook.’ By applying the ‘playbook’ as a tool to identify, evaluate, and address the underlying issues, we show how a company benefited from a 325% growth in sales ready leads and a 200% growth in lead-to-sale pipeline rate.
What you need to understand is that this client did not spend any more budget to achieve these results. Rather, a greater focus was put on developing and executing an optimized lead management process
Watch the presentation on demand including slides and audio.
If you don't have time to watch here are summaries written by others:
Hunter Boyle: Lead generation playbook
June Li: Go Beyond Website Conversion: Nurturing Sales Ready Leads
Jeff Ogden: Demand Generation grows up -- finally
We started off the clinic with a poll and got some interesting results. We asked participants to tell us which step of the lead management process was their top challenge. Of the 594 responses, 82% said it was generating, qualifying, or nurturing leads. The other 18% chose processes involving sales.
Here’s a quick look at the process we took the company through:
I’ve already fielded questions from the presentation, but would love to hear from you as well. View the clinic and send me your thoughts.
October 20, 2008
Successfully Implementing Positioning in Organizations
I've now worked on several strategic positioning projects for clients and have come to the realization that the harder part is not developing strong positioning for companies or their products.
The greater challenge actually lies in implementing it successfully. Don't get me wrong. Developing strong, distinctive and meaningful positioning is crucial. And, contrary to popular belief, it actually takes effort and skill to create it.
Sridhar Ramanathan — a dear friend & partner — of Aventi Group wrote a blog entry describing the characteristics of good positioning. He's right on.
But I am sure you've heard the countless stories where a lot of time was spent and a fancy positioning was created only to gather dust. While positioning can be targeted at any stakeholder, for the purpose of this article, I am going to focus on positioning targeted at customers. I want to talk about how and what determines that a positioning will be successfully implemented. Some of it has to do with the development process, some with
characteristics of the output and some with your internal company workflows.
Here are some of the factors I have found to be crucial:
1. Organically Grown: Sometimes people think positioning is a silver bullet that will solve everything. Positioning is simply a promise that needs to be extracted and then articulated in a succinct, relevant and distinctive way to tell customers what you're all about and why they should care. When developing positioning talk to people who touch and reach your customers every day (key people in sales, pre-sales, marketing, marcom agency, inside sales, PR, partners, etc.), those who know the magic of your products (product development, engineers) and those gathering competitive intelligence . And don't forget to talk to any industry sages or evangelists inside the company; often a company will have at least one person who fits this description. What do these folk know about your promise and your perception in the market? What they know about competition? When you talk to them the answer will emerge - organically. The advantage is this answer will be based in reality, take advantage of years of learning in the company and will help avoid false starts. There is another very important advantage of following such a process that I talk about in #2 below. Positioning is a very powerful weapon in your marketing arsenal but it's not something that should be artificially bestowed from outside. That's why clever taglines - based on a couple of superficial interviews with you - simply do not work.
2. Alignment: This is everything. It's related to point #1 above. Make sure that the key stakeholders are bought into the positioning (output). Key stakeholders include not just the management team but also key people in functions that touch customers (see above). These are people you should have talked to when you were creating it (see "organic" above) - this is hugely helpful in assuring buy-in later. If they don't agree with your conclusions, that is usually a bad sign. You need to understand why (is the positioning not credible, too aspirational, undifferentiated?) and you also need to work on getting their buy in potentially by addressing their concerns (or getting help in doing so). If not, you can be sure your message will be lost in translation. Getting buy in does not mean reaching a mindless consensus. That's not a win. It does mean making sure that your work is rooted in reality and you're working off relevant and current data - and are not missing some obvious blind spots. Not everyone may buy in at the end - some because they are naysayers and some because of some other unfathomable agenda. But you have to make sure you've given them a good listen before you make your recommendations - and be prepared to defend them. One of our clients was very happy with the positioning exercise we conducted but I think the real value they got was when we came in and helped them sell it in to the key teams internally. We had already talked to and learned from these teams and that made the "sell in" that much easier.
3. Truth be Told: How do you communicate to customers that your offering is genuinely valuable and different. The key word here is "genuinely". Positioning is not about tricking customers with fancy words or worse, falsehoods. That's the realm of crooks, not marketers. What does your product or your company or the whole experience offer that's meaningful or different? That's what you should talk about. It's OK to be somewhat aspirational vs. where you are today but then you have to be committed to working on getting there. But don't promise something you are not and have no intention of being. Not only will it not work but it will destroy trust and the possibility of customers believing you when you do have something genuinely exciting to offer. And there is another problem - you will have a tough time implementing such a falsehood because internally no one will believe it either. The good news is that there is usually something meaningful you offer - product feature, benefit, proof-point, services, experience, legacy, company history, location, alliances, incumbency, ... — and people in your company even know what it is; it's just a matter of extracting it and articulating it well. If you really think there is absolutely nothing to promise to customers then you have a different problem (innovation?) which is a whole other subject for discussion.
4. Work the Workflow: Once a client called me in to help reposition their products. Half way into the exercise I was told (yes silly me for not having asked before) that the packaging, the online copy and the retail decks had all been done so I could not influence those communication vehicles. My work, they told me, was "valuable" nevertheless since it would go in the next round of "change management". Needless to say it never did because a few months after my work was done all the owners changed. It was frustrating. So now when I am asked to do similar work, I want to first know the timing for all communication and how the repositioning exercise timeline will mesh with their workflows. I tell clients to save their money and not hire me if my work is going to be too late for packaging or retail or online or any other communication. Honest it's the best advice I can give in such a situation.
5. Cross-functional Deployment and Delivery: So now you're probably seeing the pattern that all these pointers are inter-related. This one is related to all of the above but is so important that it merits its own number. When your positioning is done you need to make sure two things -
a. That it's DEPLOYED cross-functionally - so key stakeholders get it, are aligned and can execute on it. I don't think I need to say more here except that this point is crucial for DELIVERY (my next point).
b. That it can DELIVER cross-functionally - what this means is that whatever your promise, make sure it's delivered at all consumer touch-points. Here are a few examples -
Get the gist? You have to deliver on your promise - across the board. Get all the functions involved to help make sure this happens.
Yes positioning exercises are not simple. They take work and thoughtful analysis. But they also take pre-planning and post-selling & delivery so that they can be successfully implemented. That's when positioning can have an impact and moves the needle. This is the kind of positioning that belongs in the category of "marketing that matters".
Please write and tell me what your experience has been and if you agree or disagree with what I've found.
October 17, 2008
Increasing the Effectiveness of Inside Sales
When I worked at Oracle in the late 80s (sigh), the company was one of the pioneers in the use of telesales for selling high-ticket software, on a large scale, over the telephone. Sally Duby was one of the key executives in that organization’s early success, and is now president of PhoneWorks, a sales strategy and implementation consulting firm that helps companies build or fine-tune their sales models.
Sally and her team of expert consultants have worked with more than 270 companies over 17 years, helping to build and optimize in-house lead development, telesales, and hybrid (field + inside) sales teams. I asked her to comment on what she thinks are the keys to a successful inside sales effort.
(HS) What do you view as the primary role of inside sales in today's B2B company?
(SD) We see the primary role of inside sales as driving revenue for the company. Inside sales can do that in two ways: one, using a dedicated sales development team to qualify and set qualified appointments for the field, or two, as a quota bearing sales team.
Sales Development teams help drive revenue by increasing the efficiency of the field organization. Sales Development Reps nurture those prospects that aren’t quite ready to enter the sales cycle, and hand off qualified prospects to the field as appointments. It takes a well-oiled process and metrics-driven team to do this right.
More and more, we’re seeing quota-bearing inside sales teams as the sole channel for technology companies. This is particularly true for SaaS companies and others that target the SMB space. How you use inside sales depends on a number of variables: the market you sell into, how the prospects buy, how the prospects can “touch and feel” your product, and your price point, just to name a few.
(HS) What are the benchmarks of an effective inside sales organization?
(SD) Effective inside sales organizations are metrics-driven and process-oriented. Key to making inside sales work is tracking and measuring key performance activities and steps in the sales process. Companies need to measure everything, document best practices, and reinforce those processes constantly. Training is also key, and not just product training. Some kind of on-boarding program for new reps is essential.
(HS) What are the most common mistakes people make in setting up or running an inside sales organization?
The most common mistake we see is that executives don’t understand how important the details are. Tracking and measuring activities and processes is essential to making an inside sales team successful. Frankly, this is a very different skill set from that of a typical enterprise VP of Sales.
We see companies starting up inside sales teams and providing little more than a call list and a phone. And then they wonder why they aren’t getting the results they expected! There’s definitely a “science” to what transforms inside sales groups into the machines that management expects. The processes have to be defined and documented along with activity goals to produce the numbers that the company needs. Then there’s ramp up time for selling over the phone – there’s no instant success (although it is a shorter ramp up compared to field sales.)
(HS) How do you see the role of marketing automation and automated lead management in the context of inside sales?
(SD) This is one of those areas where Sales 2.0 tools are making an enormous impact in helping to align marketing and inside sales. Automated lead management can dramatically increase the effectiveness of a Sales Development team. Being able to pre-score leads helps Sales Development Reps (SDRs) prioritize which leads to hit first. And leads that don’t merit a SDR’s time can be offloaded into an automated lead nurturing system, and “kept warm” through a series of ongoing touches until that lead meets the necessary criteria to be sent to a rep.
(HS) What do you think of inside sales groups where the reps ring a large bell every time someone closes a deal? There’s one of these groups in my building and it drives me up the wall!
(SD) Ha! This is a topic that will get heated conversation. In the technology world we don’t see this behavior very often. Most inside reps view it as demeaning. It really depends on the corporate culture and the people involved. I certainly understand why some companies do it, but there are other ways to build excitement and enthusiasm and get the competitive spirit flowing that are viewed more positively by the inside reps.
Thanks Sally!