January 21, 2018

What the slow death of B2B publishing means for marketers

Marketers always struggle with what to do next. There so many channels out there and so little time. But if you step back and think about where the real opportunity is for B2B marketers, it is idea marketing. Start with a good idea and the channel questions will resolve themselves.

B2B buyers are tired of marketing, but they’re not tired of ideas. In fact, buyers are hungrier than ever for good ideas presented in an objective way that target their specific needs. The people who used to do that, B2B journalists, aren’t doing it so much anymore.

This cartoon making the rounds online captures the frustrations of trade journalists--and reveals the opportunity for B2B marketers.

The business model is broken
It’s not that the journalists have gotten lazy; it’s a problem with the business model for B2B publishing. The business side of these organizations is trying to maintain profitability by slashing staff and by maximizing online traffic to make up for lost print ad revenue (and other desiccated revenue streams like events).

But unlike the old print subscription models, where publishers qualified their audiences by setting minimum requirements for things like role in the organization and buying power (which allowed them to justify high prices for advertising), online traffic is essentially random. Today, publishers must substitute traffic quantity for quality of subscribers to get advertisers to buy. That drives publishers to produce a lot of short content designed to reach the broadest possible audience (at least one online story about Apple per day for a technology pub, for example).

Half your ad dollars wasted? Try all of them.
Meanwhile, B2B buyers still hunger for good, specific content just as they always have. But because advertisers don’t believe in print anymore, the economics aren’t there for publishers to provide it. We keep hearing that quote from John Wanamaker about how half of his print advertising dollars were wasted. Trouble is, with online that figure is closer to 100%. Advertisers have abandoned print display advertising that at least had some degree of targeting for online display ads that have no targeting at all.

It’s a no win for everybody except the ad agencies. Publishers are left with a trickle of revenue and B2B companies discover just how uninterested a generic online audience is in their products and services. Meanwhile, Google, which has become the biggest ad agency of them all, gets rich by presenting hungry content seekers with links to JC Penney.

From the ashes of trade journalism, an opportunity for marketers
However, the tragedy that has become trade journalism is an opportunity for B2B marketers.

Providers have the opportunity to fill the content gap themselves. Too bad more of them aren’t doing it. Though most respondents in our How Customers Choose research said the quality of their providers’ thought leadership was pretty good, nearly 40% said it could be better. The number one suggestion for improvement: Focus more specifically on buyers’ particular business segment and needs (which B2B print publications used to be measured on each year in reader surveys).

This longing for personalization isn’t just heard in the context of thought leadership, however. When asked to name the number one factor in choosing a provider, variations on the “know me” theme came through 42% of the time.

Measure relevance, not output
But most marketing organizations don’t measure relevance; they measure output—whether it’s in leads or downloads. Marketers need to invest their money where B2B publications used to invest it—in constantly researching their target audiences and identifying the trends and ideas that are most relevant to them. Then marketers need to provide that relevant content.

When they do, they win business. In our recent survey, How Customers Choose Solution Providers, 2010: The New Buyer Paradox (free summary available), nearly 60% of respondents said that idea-based content plays an important or critical role in determining which providers make it onto their shortlists. But if providers go farther and use thought leadership to help companies clarify their business needs and suggest solutions, 30% of respondents said they are more likely to choose those providers. Even better, more than 50% of this group said they would consider sole-sourcing the deal. And this potential windfall isn’t limited to new prospects. Existing customers are also looking for new ideas. There’s no reason you can’t explore the epiphany stage with them more than once.

Does that help clarify what to do next?

What do you think?

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B2B social media lessons from Steven Slater and Mark Hurd

At first glance, Steven Slater seems like a total crackpot—cursing out a passenger on the intercom and snagging a few beers on the way to a fun-house exit on the inflatable emergency slide (admit it, haven’t you always wanted to slide down that thing yourself?).

But we’re in the era of social media now, so there are breadcrumbs in the forest that lead us to a fuller explanation of who Slater is and why he did what he did. Valleywag did a great piece on the trail of anguish Slater left on a social media site called Airliners.net about how airlines’ absurd baggage fees had caused an explosion in carry-on baggage that pits passengers against crew and puts everyone in danger.

Social media fills in the background to the blowup
Thanks to the site, we discover that Slater has loved flying since he was a kid. His father was an airline pilot and he waxed poetic about seeing planes take off. His posts chronicle the sweeping arc of frustration felt by a veteran flight attendant (he has been flying since 1990) over the steady decline of an industry that he clearly loves.

Following the trail of bread crumbs leads us to a caring, thoughtful person. Of course, he shouldn’t have done what he did, but it’s clear that his slide into the sunset is built on a foundation of heartfelt frustration rather than a crackpot’s whim.

Even the mighty leave a trail
From the yin of Slater we have the yang of Mark Hurd’s implosion at HP. It’s difficult to tell exactly what went on between Hurd and Jodie Fisher, but it isn’t hard to find a breadcrumb trail of what people of HP thought of him. And in the wake of his firing, that’s exactly what journalists and their audiences were interested in knowing. When the mighty fall, we all want to know what those involved really thought about the powerful icons.

You can do that on a social media site called Glassdoor. Go there and search on HP, and you can see that as of today anyway, employees are dissatisfied. And until Hurd was fired, his picture went next to that 2.4 out of 5 rating. The first review I saw listed under the search was entitled, “OK to work for, but watch your back.” Nothing like faint praise.

The data is available to pass judgment
In a piece on SiliconValley.com, they interviewed the CEO of Glassdoor, who was able to offer an assessment of Hurd’s reign based on over 1000 reviews of people who work there. As a researcher, I know that that is a pretty respectable survey sample. And since Glassdoor is a site with a higher purpose than ranting about your employer (people go there looking for job postings and to get a sense of the going salaries in their professions) it’s likely that it represents a fair cross section of HP employees, rather than just the angry ones.

The information from a social site like this changes how journalists can write about a huge company like HP. Rather than trying to craft an objective view of what HP employees thought of Hurd based on a handful of interviews with a few (possibly disgruntled) ex-employees, the reporter is able to build a credible case for the fact that, as it says on the headline, “Few HP workers shed a tear for Hurd.”

So what can we take away from all this as B2B marketing professionals? Here are a few thoughts:

  • We must monitor what’s being said about our companies online. The trajectory of Slater’s postings look a lot like the things that customers say about our complex B2B products and services, which have a much longer arc of relationship than B2C. Our customers aren’t going to do a United breaks guitars on us. They are much more likely to build a reasoned head of steam over a long period in places like message boards.
    Longtime customers look especially like Slater. They may have come on board at a time when your products and services offered more than they do now or worked differently. Like Slater, their expectations may be born of an entirely different era that they think was “better” than today. We need to keep track of the arc of sentiment and reach out to these customers before the blowup.
  • We must be able to engage with customers through social media. It isn’t enough to discover that customers are mad at us online. We need a process and people for reaching out to them. Imagine if someone at JetBlue had reached out to Slater based on his postings and asked him to talk about his growing frustrations? He certainly wouldn’t be facing federal charges and an end to a long career. Similarly, there are many ways we can intervene in our B2B customers’ frustrations. We can invite them to talk with an internal SME, create a session about the issue at the next user conference and invite to attend, etc.

What do you think? What else do we need to do?

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The power of self-regulation in customer relationships

Simple things seem to be the most powerful, don’t they? I think that’s one of the reasons that when people write about an archetypal business, they often use bicycles.

Advertisement for Columbia Bicycles from 1886.
Image via Wikipedia

Clear, simple product that everyone understands, right? Everyone knows what a bike shop does. They sell and fix bikes and they offer accessories.

The bowl of quarters
But Chris Zane thinks of this simple business model differently. He sees it entirely as a service business. And he aims to give away (as in free) as many services to his customers as possible. To bring this across, he uses a simple metaphor: a bowl full of quarters.

In this video of a conference presentation Zane did (don’t bother with the whole thing, just scroll down in the box marked “Chapters” to “Zane’s Cycles”—it’s short and sweet), he offers the bowl to people in the audience and asks them to take from the bowl. He doesn’t tell them how many to take, he just puts the bowl in front of them.

The power of self-regulation
As you might suspect, nobody digs a paw into the thing and scoops out all the quarters. They each take one. This is the power of self-regulation.

The bowl represents the lifetime value of the customer. Zane did research on the bike industry and figures that the average lifetime value of each of his customers is $12,500—from the first bike they purchase to the last, as well as all the accessories. At a 45% margin, that translates to $5600 in profit.

When Zane started out, he faced competition from much larger bike shops, so he couldn’t afford to compete on price of the product.

Can you afford to hand out quarters?
Instead, he started handing out quarters. First, it was free one-year maintenance with each bike. Then when competitors matched it, he made it two years, and then finally, lifetime.

When a customer needs something small, like a nut or bolt, Zane trains his staff (and training is important) to just give them away. If a customer tries to fix a flat himself and screws it up, they get a new tube—no questions asked. After all, what’s a $5 tube when you have $5600 to spend?

For those of us struggling with B2B marketing and all its complexities, this will help clarify some core issues.

Watch the video and you will come away inspired to rethink how you relate to your customers and what your true costs are in serving them. You may even create your own bowl of quarters.

Please say what you think of the video in the comments section.

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Six ways that marketing needs to lead the organization in social media

Social media creates the need for marketing to lead within the organization.

At least that’s the conclusion we reached at ITSMA recently when we did our social media survey (there’s a free summary if you’re interested).

Now what do we mean when we say that? We mean that within the organization the leadership of social media is falling to marketing. We think that’s because social media is seen primarily as a tool for marketing. Therefore, the marketing group is becoming the default center of social media, right?

I’m really excited about this because it’s rare for a function like marketing to get an opportunity to lead the entire organization. But think about it. Marketers are the not the only ones who are going to be doing social media. Our subject matter experts (SMEs) are talking to customers. We’re seeing HR departments using social media for recruiting. We’re seeing companies use social media to bring customers into the product and service development processes to collaborate on new ideas and improvements. We’re seeing companies use social media for customer support. (Shameless plug here: My favorite B2B blogger Paul Dunay is going to talk about how Avaya uses social media for customer support at ITSMA’s Marketing Leadership Forum on May 25-26.) The entire organization needs to get involved in social media and marketing needs to lead that effort.

I have to say that we were pleasantly surprised and I have to admit a little shocked when we discovered that many marketers seem to get this intuitively—67% of marketers said they are taking on the responsibility of identifying the appropriate subject matter experts and assigning them to engage with their target audience and influencers in the online conversations that are happening out there.

But if marketing is truly going to be the catalyst for social media in the organization, many things are going to need to change. To be a leader, you have to have your own house in order. That means that marketers need to integrate social media with the larger marketing and business strategies. That’s why at ITSMA we’re calling 2010 The Year of Marketing Transformation (sound the bugles!—a little portentous, I know, but we really believe it and the data really shows it). And social media is the main driver behind the need for this transformation. We don’t think marketing can afford to continue doing more with less. With marketing budgets as percent of revenue being an all-time low — less than 1% — social media can’t just be another add-on to everything else that marketing is already doing.

Remember that marketing can’t do this alone. Social media gives us the opportunity to bring the rest of the organization into our efforts. But to do this effectively, we have to define new processes, roles and competencies for marketing and we have to play a large role in leading social media for others inside the organization.

So in our research and our discussions with members and influencers on social media, we’ve identified six major areas that marketers need to focus on to lead the rest of the organization effectively.

  • Research. We have to figure who we want our SMEs to talk to so they don’t waste their efforts.
  • Ideas and content. We need to create an idea engine within the organization to help SMEs come up with things to Twitter and blog about.
  • New roles. We’re seeing a role that is sort of a director of ideas and content emerge. Someone who helps identify smart ideas and people within the organization and makes decisions about how to develop them. We’re also seeing directors of community—Jeremiah Owyang tracks these people on his blog.
  • Governance. Social media policies are the foundation of social media governance. And even small companies can benefit from having a social media council. Listen to IBM’s Sandy Carter talk about how she set up a social media council in her group at IBM.
  • Training. We shouldn’t just turn employees loose without helping them learn about the tools. But we also need to teach them about the strategies for using those tools. Telstra has a cool example of social media training that anyone can watch.

What do you think? What have I left out here? Anything to add?

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Top B2B marketing posts for 2009 (hint: social media)

Who says B2B marketers are lagging in social media? If they are out there, they aren’t reading this blog. Of the top ten posts on my blog this year, only one did not involve social media. Though I’m supposed to be an objective researcher, I have to admit bias here. I think the social media phenomenon is the most exciting and important thing to hit communications in my lifetime. So writing about this stuff is fun. I hope you enjoy reading it as much as I do writing it.

Thank you so much for your comments, links, and tweets this year. I’m happy to say that traffic to my blog has quadrupled (I’ve gone from a D-list blogger to a C-list, I think) in 2009 thanks to you. I look forward to collaborating even more in 2010. Have a happy and safe New Year!

Check out these top posts if you haven’t already:

  1. Six factors driving B2B social media marketing adoption
  2. The four components of social media management
  3. Want proof that the C-suite is into social media? Here it is.
  4. How to create B2B social media policies
  5. Why B2B marketers hate social media
  6. Social media strategy for B2B: what’s required and what’s optional
  7. Why bother with thought leadership? Five questions and answers.
  8. Eight reasons to monitor social media and a list of tools for doing it
  9. Where should your corporate blogs live?
  10. Why B2B marketing will become more visual, vocal, and mobile

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Want to understand your customers’ business needs? Give them an award.

Like most marketers, I spend most of my time desperately seeking to understand my target audience (B2B marketers) and delivering content that they find relevant and engaging. It’s a struggle.

But once a year around June, my life gets a little easier. That’s when I get to sit back and watch the submissions for our Marketing Excellence Awards (MEA) roll in. It’s a beautiful thing. Marketers from around the world tell us in great detail about the campaigns and programs that have netted them the most business results.

We have five different categories for the awards that cover important areas of focus for B2B marketers. The number of entries we receive in each category and the quality of those entries give us a sense of marketers’ shifting priorities from year to year and reveal general strengths and weaknesses of the profession (for example, we’re great at sales enablement and demand generation; we suck at metrics—just not in our blood, it seems).

Everybody wins with the MEAs. For us, it’s an opportunity to build a closer relationship with the winners and generate some great thought leadership. The winners get serious recognition for their work that helps their companies and their careers. If you haven’t considered creating an awards program for your target customers, you should.

I wish I could take credit for the MEAs, but it was developed long before I got to ITSMA. I also wish I could take credit for the excellent eBook that oozes with best practices from this year’s winners. You have to check it out. It was developed by my ITSMA colleagues Pam O’Rourke and Maria Lindberg.

However, I can share some of the best practices we’ve developed for separating the wheat from the chaff in the MEAs. The guiding principles we use to determine the winners are the same ones that guide the success of any marketing program: innovation, execution, and business results. We ask a series of questions designed to reveal how well the entrants have fulfilled those three key principles:

  1. What is the story? We humans are wired for stories. What is the narrative that explains what you are trying to accomplish with this program? Creating the narrative helps project members focus their efforts and will help sell the effort to others inside the business and with customers.
  2. What are the motivating factors? Successful marketing programs always have a compelling call to action. But marketing programs are themselves calls to action. There should be an important business justification that causes marketing to create the program. That justification can come from inside, such as wanting to enter a new market or shore up sagging sales, or outside, such as a new competitor entering the market.
  3. What is the customer need? The depth and creativity of your research can be the deciding factor in whether the program rises above the noise in the marketplace. Research provides the supporting evidence for a new insight into customer or market needs. For example, segmentation could reveal a market that you never knew existed. Role-based research can help personalize your message to the needs of the specific buyers and influencers involved in the purchasing decision.
  4. How do you quantify the need? Research also provides the quantification of the need and the benefits of your solution that are most worth highlighting for customers, such as:
    • Improve efficiency
    • Increase customer satisfaction
    • Increase profitable revenue
  5. Where is the innovation? To be sure, one of marketing’s primary roles is to support sales. But marketing should also be helping drive the business strategy and execution of the company. One of the ways to do this is through programs that challenge the current ways of doing things, both internally and with customers. Marketing programs should help the business stand apart from competitors in the segment. The best signal of success is when competitors feel compelled to respond.
  6. What are the constraints? Of course, all marketing programs come with constraints. Budget is the overriding limiter, but it’s important to quantify as many constraints as possible because the limiters help define the ambition of the project.
  7. How do you measure success? Establishing clear metrics before you start provides guard rails for the project and makes it easier to provide progress reports. Of course, knowing the metrics before you start also makes the data gathering process much easier.

Do you have an awards program with your customers? If you already have one, are you asking the right questions to find the best of the best (and make your life as a marketer easier)? Please comment with a link to your awards program and tips for making the most of them.

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Want to launch a new product or service faster? Do some research.

I helped host an ITSMA round table this week and a near universal complaint from our B2B technology clients was how difficult it is to launch new services in a fast, efficient way. One client summed it up by saying that there are two points of resistance in the process of bringing new things to market. The first comes at the beginning of the process—the “why” battle—where everyone takes pot shots at the new idea. The second comes after everyone signs off on the new offering and they are suddenly confronted with all the things they need to do to make it happen—the “how” battle. The organization goes into a kind of collective amnesia as all the interested parties begin denying that they ever wanted to have anything to do with this misguided thingamajig—what’s it called again?—and complain about not having the resources or the time to make the proposed launch date.

Put more energy into the first battle
Our client said that in the past he has devoted most of his energies to the “how” battle because his company prides itself on seamless delivery. However, this week he said he was going to shift his strategy. “I’m convinced that we put so little into the first battle that we end up spending way more time and money on the second than we need to,” he said.

In other words, companies start trying to deliver new products and services before they’ve adequately answered all the questions about whether this new thing is something customers actually want, whether it’s something that salespeople can actually sell, and whether it is something that operations can actually deliver at a reasonable cost.

Stop relying on human nature
The biggest reason for this lack of investment at the front end is human nature. We’re optimists at heart, and we like to trust that past success will lead to future success. We also like to trust our own instincts and experiences as useful guides. And we don’t like to spend a lot of time weighing our decisions before taking action. Makes us feel weak.

But of course, all we can really ever trust is the data. Good data, that is.

Talk to the right people first
By good data I mean taking a comprehensive research approach during the “why” stage. When we’re thinking about new offerings, we need to consider all the pieces of the business that will be affected by the decision—from customers, to operations, to strategy, to profitability—and factor them into the research.

We need to make sure that we gather the opinions of all the different constituencies that will be affected by the decision. Important stakeholders need proof, through research, as to whether their own experiences, views, and hunches are borne out by the facts. Otherwise, they will fight tooth and nail during the “how” stage because they haven’t really bought into the idea that the new thing is necessary, nor do they want to change what they are doing to accommodate it.

This is why the second fight takes so much time. Those who resist keep going back to the “why” argument and point out that there was never convincing evidence that we needed this new thing in the first place. Meanwhile, the backers of the new thing are convinced that the organization has already invested too much time and money into getting this far and that it’s too late to turn back now. Resistance hardens and it takes much more time and resources to actually implement the new thing—meanwhile, no one’s really sure if it will succeed or not.

It’s tough to work your butt off on something that you’re not sure about. That’s the nut of the problem in delivering new services. Instead of focusing on design and delivery, we’re still wondering—and fighting about—whether what we’re doing is worthwhile.

Do research early and save money on the second battle
It seems like a waste of time to stop and ask everyone what they think before plunging ahead with new offerings, but it will save money in the end.

In working with our clients, we’ve found that it’s particularly important to survey both customers and employees when developing an important new service, because it allows you to put the “why” argument to rest using objective data. You can compare employee perceptions about customer needs and the potential new service with the perceptions and needs of the customers themselves. What a concept, huh?

Now getting customer input isn’t as simple as asking them what they want and then delivering it to them. You need to balance their wants with their willingness to pay for those wants and your ability to deliver on them for a reasonable cost. That’s why the research process needs to be iterative. Here’s a typical progression:

  1. Competitive intelligence. It pays to know what’s available from competitors before you develop your own offering.
  2. Influencer research (analysts, journalists, bloggers, academics, etc.). Get help in determining the need in the market and pla around with options before going ahead.
  3. (Concurrent) Customer research and employee/partner research. Using the competitive and influencer research as a base, develop a survey that asks about the market need and a few different versions of the offering.

If our work with clients is any indication, you’ll be surprised at the gap in perception between customers and employees. For example, one company we worked with was considering offering 24×7 support as a new service, which would have meant a huge investment of resources and big changes in its organization.

On the survey, almost two-thirds of employees said that customers wanted 24×7 support, while just a handful of customers actually wanted and were willing to pay for 24×7 support. What they did want was 12×5 support in their local time zone with the option of 24×7 support for critical issues. The data was incontrovertible evidence that the service offering as originally envisioned was off base. Working with development and delivery people (who took the internal survey), the company worked to modify the offering to meet customer needs—while saving millions in the process.

For marketers, the research becomes great fodder for a marketing campaign that offers rich evidence of listening to customers and developing new services based on their actual needs. Makes our jobs that much easier.

What do you think? Will you share your war stories about new product or service launches?

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Get Beneath the Surface with "Deep Metaphors"

We often complain that B2B products and services don’t appeal to customers at a personal level. But maybe we’re just not trying hard enough.

Jerry Zaltman, a Harvard Business School professor, has an interesting theory about how to reach customers below the surface, called “deep metaphors.” In this excellent interview, Zaltman defines deep metaphors as “fundamental frames or lenses that we use to orient ourselves to the world around us. They work largely below awareness or in our subconscious minds and shape and reshape just about everything we think, feel, hear, say, and do. They are almost a secret or hidden language of thought and action.”

As an example of how to reach the subconscious, Zaltman shows a Michelin tire commercial in which a baby is sitting inside a tire that is floating on water during a light rain. Inside the tire, pairs of stuffed animals surround the baby—any resemblance to Noah’s Ark is purely intentional, says Zaltman. In interviews that Zaltman did with viewers of the commercial, he heard Michelin portrayed as the holder of safety for families.

In all, there are seven deep metaphors, says Zaltman. In this article, they are defined as:

  • Balance (equilibrium)
  • Transformation (changing states or status)
  • Journey (as in life)
  • Container (keeping things in and keeping things out)
  • Connection (feelings of belonging or exclusion)
  • Resource (providing survival)
  • Control

Counted together, these seven metaphors account for 70 percent of our inner feelings, according to Zaltman, who helps companies uncover these metaphors through extensive interviews with customers through his consulting firm.

It’s an expensive process, no doubt. But it got me thinking. Perhaps we could use these metaphors to guide some of our programs with customers in B2B.

I think B2B technology marketers should pay particular attention to the metaphor of connection. In hundreds of interviews with technology people, I’ve always noticed their passion for the profession. Indeed, I think technology people are more loyal to their community of practice than they are to their companies. Anyone willing to work for free (as in the open source movement) is fired by passion.

And two of the passions that fire the open source movement are connection and recognition. In survey after survey of open source contributors, they always cite recognition by their peers—as expressed by downloads of their code—as their main motivation.

I think we in marketing should keep this quest for connection in mind when developing our programs and campaigns. What do you think?

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