Insights

5 Growth KPIs Every Product Marketing Manager Should Know

Author: David Daniels, BrainKraft @ BrainKraft.com

How do you measure the impact product marketing has on your business? It’s a common question I get. Most of those questions are in response to pressure by bosses wanting attribution metrics. That is, data to prove that a given marketing effort has an impact on the business in a positive way.

Measuring a direct correlation is possible but it’s far easier to measure in the aggregate. That way you’re reporting on trends rather than incidents. You want to use KPIs that correlate to the business goals for the products you’re supporting. In other words, don’t measure things that don’t matter.

There are 5 basic KPIs I recommend you monitor. Each one brings something to the table to help you figure out what’s working and what’s not. This is a good starter list of KPIs, but it isn’t a complete list by a long shot. The list is limited in scope to what product marketing should focus on.

Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) is a high-level KPI. It’s a trending indicator, like your weight, cholesterol, or blood pressure. In this case though, a higher LTV is better. It means that each customer, on average, is spending more money with you. It means your business is getting healthier.

A declining LTV could be the result of competitive pressure or there could be excessive discounting. If all competitors are experiencing declining LTV it could be an indicator of a declining product category.

 

LTV = Sum (amount each customer spends until they leave) / # of customers that have left

 

Example:

LTV = ($250,000 + $375,000 + $225,000) / 3 = $850,000 / 3 = $283,333

What I like about LTV is it can be easily calculated from past data. Ask your Finance team to pull the data for you from the last few years and see where it’s trending.

Close Rate

The close rate tells you how many qualified leads actually close and become customers. A higher close rate is better. It means there is a higher efficiency in acquiring customers and it’s being done at a lower cost.

Lower close rates could be an indicator of a poor product-market fit or a sales enablement gap.

You need to decide where you begin the measurement of a close rate. Some organizations use a marketing qualified lead (MQL) as the starting point and some use a sales qualified lead (SQL) as a starting point.

 

To calculate the close rate using SQLs, your formula looks like this…

 

Close Rate = # deals closed / # SQLs

 

Example:

 

Close Rate = 320 deals closed / 1,000 SQLs = 32%

 

Average Cost per Lead (CPL)

The cost per lead is an indicator of lead gen performance. A lower cost per lead is good. A higher cost per lead is not as good. The goal is to generate the best leads at the lowest cost while increasing close rates.

You can calculate CPL based on MQL or SQL. The game for your sales team doesn’t start until there’s an MQL, so that’s the minimum threshold. Take the total cost of marketing programs to get MQLs and divided it by the number of MQLs acquired.

 

CPL = Money spent to acquire MQLs / # MQLs acquired

 

Example:

 

CPL = $500,000 / 850 = $588

 

Average Contract Value (ACV)

The average contract value is the average amount of money per transaction. Think of shopping at a grocery store. There are hundreds of people who go to the grocery store each day. If you take all the sales generated for the day and divided it by the number transactions, you get the average contract value.

 

ACV = Sum (value of deals closed) / # of deals

 

Example:

 

ACV = ($150,000 + $200,000 + $175,000) / 3 = $175,000

 

Customer Acquisition Cost (CAC)

Customer acquisition cost is like CPL only bigger. It adds the cost associated with going from awareness all the way to a close. A higher CAC is generally thought of as bad but that’s not  always true. The CAC can rise as long as the corresponding ACV goes up too.

 

CAC = Sum (all marketing and sales costs) / # customers acquired

 

All marketing and sales cost includes salaries, promotional costs, commissions, and any other costs associated with acquiring a customer. If you calculate your CAC on a monthly basis, you can monitor trends. It’s not an exact science because there’s an assumption that near term  marketing efforts turn into near term customers. It’s not perfect but it definitely trends over time.

 

Example

 

CAC = Sum ($50,000 marketing cost + $25,000 sales cost) / 5 customers = $15,000

 

It’s bad when the CAC is greater than the ACV, like the parody of SliceLine on the TV show Silicon Valley. You can’t make money if the cost to deliver pizzas is $10 and cost to buy them is $9.

In the example, we’ve calculated a CAC of $15,000. If the ACV is below $15,000 then you have a business decision to make. It might be a strategic play to accept deals that are under water to optimize for profit later. It might be a bad business model. Or, there could be leaks that need to be plugged.

 

Putting it All Together

Think of this list of KPIs as basic diagnostics, like when you visit a doctor. The doctor gets measurements from you to evaluate the status of your health. You know from experience the initial collection of data can result in more diagnostic tests to pinpoint an illness.

The reason I’m using this analogy is that I just returned from the doctor’s office. I have a small scratch on my cornea which was diagnosed after a secondary set of diagnostic tests. It occurred to me this is a perfect metaphor for product marketing KPIs.

Using multiple KPIs is important. It allows you to compare how KPIs correlate to each another. One KPI can be great while another KPI is bad.

 

Example:

Assume that you have a Cost per Lead of $300. Your finance team has decided the cost per lead is too high and you need to bring the cost down. Over 6 months your team has dropped the CPL down to $50. High fives are in order because it’s the lowest CPL you’ve ever documented. The CFO is thrilled. But he’s noticed something else.

You now have a Close Rate of 10%, which by any measure is abysmal. It used to be better. In January the close rate was 30% and trending higher. What went wrong?
You can’t diagnose the problem yet, but you have data to analyze. You graph the CPL against the Close Rate from the past 6 months.

Uh-oh. You see where the problem started and can figure out the right treatment to help the sick patient.

We can’t be absolutely certain there is causation to the correlation, but it sure does stink. It requires more investigation but now you have data, not a guess.

If you were tracking CPL against the close rate on a monthly basis, you would have spotted the trend sooner.

Summary

There is an endless supply of relevant KPIs. Don’t get lost in analysis paralysis. Pick a handful of KPIs that are meaningful to your business model and to the goals of your organization.

 

Planning a Launch: Communicate Globally, Execute Locally

By Rich Nutinsky, master instructor at Pragmatic Marketing

Planning and executing any product launch is daunting, but planning and executing a global product launch increases the size and scope by an order of magnitude. Not only are there differences in geography and language to consider, there is also the local calendar. And that’s just the beginning.
First, you have to identify the problem you want to solve. Does it exist for people in other geographic locations? Will your product universally solve that problem?
You will need to conduct market research to answer those questions. But remember, conducting research on your home turf won’t allow you to extrapolate information that is relevant to other geographies; the problem you’ve identified may not be an issue there.

 While there are plenty of variables, global launches generally fall into two main categories: phased and big bang. Big-bang launches, which indicate a simultaneous launch in all markets, are the rarest and most problematic. From a project-planning perspective, the more complex and larger an effort, the higher the probability of failure.
 It is virtually impossible to take a one-size-fits-all approach; most launch activities simply don’t lend themselves to a big centralized push across markets. Ideally, planning should be done locally and integrated into a comprehensive plan. If you plan for a launch in North America and expect to duplicate it in another region, you won’t be successful. It’s important to plan a variety of phased local launches that take into account the unique needs of each region. Here’s a sampling of what to consider in this phased approach.
Regional Considerations
Global launches are often staggered by geography, and the tasks that must be accomplished for each region will drive their launch dates. For example, are there language translations and content modifications to consider? What about legal registrations, trademarks and branding?
When I managed the global launch of a new line of products, something as simple as considering a region’s holidays and buying cycles created immense complexity around timing the launch. Planning and execution of messaging was also a challenge.
Naming the product was another challenge because for every jurisdiction we wanted to enter, we had to make sure that we could use the same product name. If someone had already registered that name or a domain, we’d be back at square one.
These challenges were unbelievably detailed and required assembling a team with global representation, including marketing resources from the different geographies.

“Depending on the geography, product categories may be in different stages of their life cycles.”

tweet

Product Life Cycles
 All products and product categories go through a life cycle: new, growth, mature, decline. Where your product and product category are in their life cycles will affect how you go to market. If your product is in a new, innovative category, your approach to launch will be much different than if you are in a mature product category where a lot of people already have the product.
This is important because depending on the geography, product categories may be in different stages of their life cycles. Therefore, you will want to localize the approach, message and timing of your launch to coincide with the specifics of a particular geographic market. You might include some activities in Asia, for example, that you wouldn’t include in North America.
The Buyer
As you look at global markets, you will find that customers use different decision levers depending where they are. They will buy differently in the Middle East than in North America, and Latin America will be different from Asia.
For example, in some regions companies guard the identity of their actual decision-makers from vendors to gain an advantage during the buying process. In other regions, discounts are a routine incentive. Because the differences can be profound, it’s important to understand whether a strong relationship is required to buy, or whether the decision is a straightforward economic one based on ROI.
Many businesses also discover that buying in a government environment is much different from buying in a commercial market. Not only are the processes defined differently, but the roles and players may change as well. Navigating all the red tape can become as challenging as delivering a compelling value proposition.
Distribution Channels
With all these variables, it often makes sense to employ different distribution channels in different markets. For example, launching a product in Japan through a Japanese channel partner will involve a very different set of steps and activities than if you work with your direct sales force. And if you want to do a regional launch in Europe, multilingual and multi-currency availability are key. But in the U.S. it doesn’t mean a thing. When you go to market, the messages you want to deliver, the value propositions you want to create, must be localized by geography.
Major launches by companies like Apple may appear to be global. But if you look carefully, they usually kick off with a global marketing launch well in advance of the product’s availability. In terms of when customers can get their hands on the new product and how it is delivered, the timing is usually staggered because of the approvals that are required across a variety of jurisdictions.
At a software company based in northern Europe, we twice tried unsuccessfully to expand into North America before determining that we needed to have local resources in North America to be successful. Once we got established in North America, we focused on expanding into the Middle East and the Asia-Pacific region. Finally, we looked at Central America. Through that focus we were successful.
The bottom line?  It makes sense for most businesses to expand their footprint into markets one at a time. You need to consider the risk, complexity and localization involved in your launch. And even when you communicate globally, it generally makes a lot more sense to execute locally.

Product Innovation is Not About Taking Risks; It’s About Reducing them

Author: Cate Zovod from Cognizant Accelerator

And Product Marketers are Key to Risk Reduction

There’s a scene in Steven Spielberg’s epic historical drama “Lincoln” in which abolitionist Thaddeus Stevens is chastising the President for making perceived compromises on the morally unambiguous issue of racial equality. Lincoln explains the means to the end – ensuring the passage of the 13th amendment:

“A compass, I learned when I was surveying, it’ll point you true north from where you’re standing, but it’s got no advice about the swamps, deserts and chasms that you’ll encounter along the way. If in pursuit of your destination, you plunge ahead heedless of obstacles, and achieve nothing more than to sink in a swamp… what’s the use of knowing true north?”

There are known and proven disciplines for building products. A good product manager knows the latitude and longitude of the destination, how many covered wagons they are going to need and how long it will take to get there. But as their product marketing partner, you can map the route that is going to avoid the swamps and deserts – known and unknown. Whether you are in a bootstrapping startup or (in my case) one of the world’s largest technology services companies, you will encounter Terrain, and no matter how good your cell coverage, you will find yourself in places that are not showing up on your GPS.

I am a product marketing startup advisor in a product accelerator in a leading professional services company. I have the privilege of working with deep domain experts who, with a service-delivery mindset, tend to be more customer-centric than their counterparts in traditional software companies. However, repeatable product development and delivery is new territory, and I have learned that where I can provide immediate value is to reduce the risk – or perception of risk – from what we build. How? Through thorough research (quantitative and qualitative), real, meaningful customer conversations and strategic, intentional engagement with the internal and external business partners who are critical to your product’s success.

Risk: Poor decisions are made based on erroneous assumptions

Validate Every Assumption

Think like a VC. What would you personally need to know about this product to invest in it? After all, you will be investing all of your workday time and effort into making it successful.

Establish the urgency of the specific market problem that the product addresses by talking to customers and industry experts. Oftentimes in doing so, you will uncover other, more urgent problems that can feedback directly into product direction and scoping. Scoping not only means pinpointing what particular part of the problem the

product is addressing, but also asking honestly whether your business has the will, expertise and strategic alignment to build it, and just as importantly, to sell it repeatedly. Comb the business and product plans for assumptions, and design your interview scripts to validate – and poke at – anything that is being represented as fact.

Be clear about the intent of the customer conversation going in. What phase of product research and validation are you in? Is this a preliminary meeting to validate that there is pain in this area, are you looking for feedback on feature prioritization, or are you road testing key messages for launch? How would your customers perceive and measure the value you are promising to deliver, and would they pay for it?

Most importantly, are you hearing consistent themes? One customer interview does not comprise product validation. Several interviews with customers all representing different roles or saying different things also doesn’t reduce risk. What counts is finding the same profile of customer saying the same thing, multiple times. Only then can you check the box on that particular assumption.

Assumption Risk Reduction Checklist

· Customer interview questions for assumption validation

o New Product Idea

o Proposed Solution Approach and Roadmap

o Pricing and Packaging, Market Acceptance Criteria

o Messaging

· Database or spreadsheet to capture and analyze feedback in aggregate for team review and pattern recognition

Risk: Just because you build it doesn’t meant they’re gonna sell it

Boost your Signal to your Most Important Channels

An important area of derisking that product marketing can get ahead of is field acceptance of your product. In large, multi-product companies, your field sales organization is bombarded with messages and “to-do’s.” Give them a reason to believe. First and foremost, build a great product that gives them something new, compelling, and problem-solving to talk about.

Assuming all of your company’s products are well-conceived and designed, you need to go a step further to rise above the noise.

Do everything it takes to make the people who own the relationships with your potential customers comfortable selling new products. Engage key field personnel early in your product’s journey so they feel a sense of ownership. Caucus with them prior to customer validations. Bring them with you.

This becomes especially important if you are in the unfortunate but not uncommon position of having to rebuild credibility after a failed initiative or underperforming product performance.

When planning early budget towards a launch, ask for funding to be set aside to spiff your channels. Short of executive mandate to sell, you need to prime the pump, especially if your product is perceived as “harder” to sell because it addresses a new market or leverages new and not well-understood technologies.

Channel Engagement Risk Reduction Checklist

· New Product Introduction Plan

o Field engagement in customer research (invitations and results-sharing)

o Incentive structure including spiffs

o Sales and channel training, enablement and certification

o Proper sku set-up and representation in CRM

Risk: Investment does not translate into immediate outcome

Meter your Asks and Tie them to Successes

The metered ask is a common paradigm in venture capital. The startup receives more funding as key milestones are reached. Both investor and company alike are reducing risk because they are investing in traction.

Your requests for product marketing support, whether pipe generation campaign dollars, PR launches, access to customer communications channels, staffing – can follow this model too. Be thoughtful about when to ask for support from other Centers of Excellence (PR, Events, Sales Enablement), and build in some kind of quid pro quo when you are incorporating their activities into your launch plans. In exchange for their resources, you can provide a list of customer betas; your product briefing can secure supportive analyst quotes around the company’s strategy; perhaps you can make introductions to clients for case study development. Build incremental success metrics into your plans: number of pilots or free trials secured; conversion rates from beta to full contract; customer advocates identified; sales reps certified, etc.

Go-to-Market Risk Reduction Checklist

· Launch Plan and Budget

o Metered Success Metrics (if…then…)

o Marketing resource quid pro quo (give to get)

o Naming and Branding – trademark checks

There are market and operational risks you can prepare for, but can’t control, such as new competitive entrants and macro economic changes. But there are many risks you can minimize. By making a concerted effort to do so, you are also derisking your own job performance. You will be a more effective Product Marketer when you are confidently targeting the right people with the right message. You will be a more trusted partner to sales and marketing when you are quantifying gains in their areas. Most importantly, you can play a central role in ensuring your company’s success with a strategic, high profile initiative such as a new product launch.

Arms tied behind my back, if I could do only one marketing activity it’d be this

Author: Zak Pines, VP Marketing Bedrock

If I was allowed just one marketing activity – it would be customer interviews.

Not just any customer interview – a customer interview process whereby you leverage those interviews as content across all stages of the buying process.

Here’s how I approach these:

Step 1 – Work with customer success team to identify customers to interview – could be as soon as when customers have completed successful on-boarding

Step 2 – Interview the customer over the phone (usually 30-45 mins). Questions go back to how the customer knew they had a problem they needed to solve, who did they involve in the decision, how did they talk about the problem, how did they find your company – straight through to how they implemented it, and what benefits they are seeing or expecting to see.

Step 3 – Edit into a conversation style interview, provide to customer to edit/approve, publish & promote (about an hr, plus promotion).

So in less than 2 hours you have quality content, in the customer’s language, authentically speaking to all stages of the buying process.

These are some recent examples from Bedrock Data:

Now why would I choose this as the one and only?  It just does so many positive things.  Here are eight ways these help you:

#1 – Credibility content for sales

Great content for sales team to use to build credibility around specific use cases – in Bedrock Data’s case you are trying to integrate say, HubSpot and NetSuite – here’s an interview we did with our customer talking about how they approached the project, some of the challenges they faced and how they got around it.

Providing prospects with content that is relevant to specific to their situation – both in the problem they are trying to solve and the types of questions they would like to answer –is the best way to deliver value to your prospect while also overcoming the natural, and ever growing, lack of trust for vendor written content.

#2 – Conversational content to help prospects move through buying process

To that point of mistrust for vendor content, I find prospects are much more likely relate to the conversational style Q&A format of these articles, then overproduced case study templates. There is a true authenticity to the content which helps to break through the skepticism towards vendor content. And, ironically, it’s much faster to pump out these Q&A style articles then it would be to format into “traditional” case studies.

#3 – Proof points for website

These interviews cover every stage of the buying process, including questions around how the company helped the customer. These quotes become great proof point quotes to sprinkle into a website. You get them as a byproduct of conducting the interview and producing the content.

#4 – Quality SEO content

Each of these articles is keyword rich content, speaking to the problems your company solves. Using that word authentic again, they are an authentic way build out quality content as part of your SEO strategy.

#5 – Long form content to mine from / repurpose

Since the articles themselves are approved, published interviews – they create an asset for you for your marketing team to mine and pull from over time. As you add more team members, even interns, they can easily repurpose fro the topics covered in these articles – e.g. a composite piece on a specific topic, or a specific pull quote to address a specific prospect’s question down the road.

#6 – Helps create customer advocates

I’ve found the customers really appreciate the process of being interviewed, and then seeing their experience packaged up into an article. Oftentimes it gives something they can share internally with colleagues as a way to demonstrate the success they have had in the engagement.

Nearly all of the people I’ve interviewed have been happy to serve as reference accounts for Bedrock Data, and have helped to spread positive word about the company through word of mouth – references, webinars, events and social media.

#7 – Build out your buying journey map and customer specific semantics

The interviews also serve as continuous, first-party research to keep your pulse on the customer buying journey, Whether formal or informal, you can continuously evolve your understanding of the buyer journey. This interviews also serve as launching points for keyword ideas, customer stories for sales conversations and topics for other marketing programs.

#8 – It’s fun and rewarding

Lastly this work has been tremendously fun and rewarding. It comes across as a major win-win for everyone involved.

Bedrock Data benefits from the customer stories and customer advocates.

And every time I’ve felt that the customer gets a lot out of it, including as I already mentioned a testimonial of sorts for their own project for them to share.  I’ve been thrilled to see customers being so engaged by the experience that, without solicitation, they continued to spread the word about Bedrock Data. =

For example Luque Wang repurposed his article in this LinkedIn post, and Amanda Daume packaged her interview into an article on her own blog here.

Not too shabby for less than two hours of work, right?

The Quest for Agility Changes Buying Approaches

Author: Hank Barnes from Gartner 

As organizations look to become more agile, we are seeing changing in buying approaches–but all is not well.   In a recent Gartner survey, we discovered that our 506 respondents (in mid-sized enterprises or larger) had considered over 8000 significant software purchases (25K+ or 50K+ depending on organization size) in the past two years.   Most importantly, 43% of them were ad hoc buying efforts—efforts that were not tied to strategic plans or existing budget commitments.

Generally (I will be diving deeper into this in research for clients), the completion rate–that is the license is bought or the SaaS contract is signed–is about the same for ad hoc and planned purchases.   Consider that again.   Organizations are as likely to buy something that they consider on the fly as they are for something that they had planned for.

Is that agility or is that a sign of problems?   We think it may be a little of both.

Certainly, it is a good thing if an organization realizes that their needs have changed or addressing one thing is more urgent than another (I blogged about urgency late last year and now have research published for Gartner clients).   But if the pattern indicates an inability to act and thrashing in their buying efforts, then that is a problem.

Research from CEB (now Gartner) showed that B2B customers (not just for technology) typically experience that buying efforts take twice as long as they anticipated.

BuyCycleTime

And, even when they complete a purchase, many feel regret with the decision (largely that they “settled” for something that was less than ideal).

The implications seem clear.  Even as organizations try to move faster, they often move slower.   A willingness to be agile invites them to consider new ideas, but they have not mastered the process of prioritization.  They have not mastered the process of how to buy (many feel they are in a constant quest for more information–but never really know when they have the information they need).   They have not mastered the art of building consensus–resulting in the perception that pet projects are being pushed rather than what is most important.   And what is most important seems to be nebulous and constantly changing.

This presents similarly mixed implications for providers.  On the one hand, organizations are willing to adapt and change–you don’t have to get your project in the strategic plan to be considered.  But on the other hand, to win, your battling other projects, shifting priorities, and lots of buyer uncertainty.    Providers that can help buyers navigate these waters, prescribing paths to success and value, will experience less frustration, less stalled (or no decision) deals, and more satisfied customers.

There is a lot more in the survey that our team will be exploring in upcoming research (like the urgency note).  It will also be the focal point for one of my presentations that the upcoming Gartner Tech Growth and Innovation Conference, April 30-May 2.  Join us as I explore the issues of “broken buying” and what can be done about it.

HEY B2B MARKETERS—THINK MORE B2C IN 2018

Author: Sanjay Castelino is vice president of marketing at Spiceworks.

Want more success in B2B marketing? Start thinking like a B2C marketer.

Far too often, B2B marketers mistake customers for a business. To influence customers’ purchase decisions, B2B marketers don’t typically imbue any of the personal and emotional qualities that consumer marketers understand so well. As a result, we see too many boring whitepapers, stale websites, and dry content that no one wants to read.

B2B marketers have to understand who the person is behind the business walls, what they care about, and their needs. The customer isn’t some inanimate entity. There’s a real person on the other end of the line.

Spot the problems in B2B marketing

There are many things B2B marketers do that you’d rarely see in B2C marketing—things like sending a cold sales email that says, “Can I get five minutes of your time?” This is the equivalent of robo telemarketing calls in B2C.

There’s also too much control over information—B2B marketers with the attitude of “I won’t tell you the price of this product unless you talk to me in depth.” Imagine walking into a retail store and the staff saying: “We can’t give you a price unless you share your buying habits, tell us you’re interested, and confirm you have the budget to buy our products.”

B2B marketers often create barriers to selling their products because they believe only qualified businesses deserve more information. Sure, B2B marketers can only invest certain resources into prospects who are well-qualified, but we shouldn’t create so many impediments for customers making purchase decisions. That only makes B2B consumers not want to buy from you.

Four B2C tactics to apply to B2B

As B2B marketers, we can adopt some B2C approaches to up our game and better serve our customers.

1.  Get to know your customers based on demographics, not just firmographics.

In B2B, marketers often define customer segments and personas based on firmographics, but the personas within those segments need to include demographic data as well. We have to get to know our customers as people by understanding their roles and helping them accomplish what they need professionally and personally. B2C does a good job of understanding the customer, why they buy, and what they’re getting out of it. In B2B, we typically only talk about business value. We rarely attempt to get to know the person at a level that goes beyond their job. B2B can do a much better job of that.

2. Avoid lazy, robo-calling marketing efforts.

Best-in-class B2C marketing avoids robo-calling and blasting, “Are you the right person?” emails. That’s just lazy marketing. Because B2B marketers view the customer as an entity, not a person, they don’t calculate the brand damage this causes. Meanwhile, B2C marketers are creating brands customers want to be connected to because they have great products, great experiences, or they stand for something they care about. Excluding a handful of brands, B2B does not do that well and should take a page from the B2C playbook to communicate better with customers. And by customers, I again mean people.

3. Measure outcomes, not just clicks.

In B2C, you’ll often find marketers measuring outcomes. For example, TripAdvisor sends an email for a trip to Hawaii, the customer clicks on it, and then makes a booking. That’s a linear transaction driven by marketing efforts. That normally doesn’t happen in B2B, where customers see an ad, click on it, and buy it immediately. So, understanding value in marketing is more difficult. But every B2B business should have a model in place to measure marketing outcomes, such as how you’re influencing customers. Instead of measuring clicks and leads, measure the path to revenue and understand how many people you’ve influenced from your key accounts over a given period of time. There’s no one-size-fits all model, so marketers have to understand what makes the most sense for their business.

4. Get more creative on social media.

When it comes to social media, it’s fair to say that B2C marketers generate more interesting, entertaining, and fun content that customers want to engage with, even when they’re not in a buying cycle. Think about Wendy’s, they’re not just selling their burger, but rather an experience with their brand through humor and light-hearted banter with their competitors. In B2B, we often see self-serving case studies and product information on social media. Rarely do you see content that highlights a company’s culture, speaks to industry trends, or is just simply entertaining. But there’s still tremendous value in activating B2B customers that way. Some B2B brands like Adobe already do this well by taking their content beyond their products.

Ultimately, because B2B marketers think of their customers as inhuman entities, and not real people, they often to fail to activate their brands and influence their customers. That can change if B2B takes a more B2C approach and actually engages with the humans behind the corporate banners.

How SaaS Broke Your Buyer Journey Map and How to Fix It

Author: Dennis Chepurnov

Most marketing and sales professionals are familiar with the concept of the buyer’s journey map. It’s a visual tool that helps align your organization’s marketing and sales tactics to the needs of your target buyers as they go through the process of selecting and purchasing a service or product.

Most buyer journey maps include the following six stages: identify need, determine solution, explore options, select vendor, justify internally and make purchase.

This model has worked adequately for many decades, but lately I find it lacking. This buying model has failed to keep up with changes in the market; specifically, the advent of software as a service (SaaS). Intended to transform how organizations deploy and pay for software, SaaS also has profoundly affected how customers go through the buying process.

SaaS Rocks
Buying enterprise software used to be an onerous undertaking that involved six to 10 months of requirements gathering, business case development, discovery, vendor evaluations and demos. It also entailed negotiations with IT and procurement and budgeting for the capital expenditures needed to acquire hundreds of thousands of dollars’ worth of required hardware and licenses. Several more months of deployment, customization, testing and training followed. During much of this process, customers had to commit key stakeholders to the buying process and deal with the resulting business disruption. Vendors also had to contribute considerable time and efforts from their account teams, professional services and training staff.

This still happens with large enterprise software deployments, but much of today’s business software buying has transitioned to SaaS and other subscription licensing models. This shift impacts both customers and vendors.

SaaS pricing and delivery make it easier for customers to invest in and—unfortunately for software vendors—divest from new software solutions.
The SaaS deployment model reduces the post-sale touch points with the vendor, for better or for worse.
SaaS has altered customer behaviors and expectations, even with non-SaaS products.
Although SaaS often costs more in the long run, buyers like it because it simplifies their lives. Vendors like SaaS because revenue is more predictable and often requires less involvement of professional services, which can be hard to estimate and staff.

The Vendor Trade-Off
It sounds great to have this perpetual subscription revenue, but there is a flip side: The buying process is never really over. With every subscription payment, customers have an opportunity to reflect on the value the software provides, then compare it to the cost they are paying.
The perpetual pricing model places the burden of ROI on the customer after the purchase; SaaS pricing effectively shifts it to the vendor.

This is a fundamental shift in the dynamics of value generation. With perpetual licensing, buyers staked their professional reputations—and sometimes their jobs—on significant investments of time and budget to acquire a technology solution. After the purchase, customers were responsible for ensuring the investment paid off.

With SaaS, a customer’s up-front investment is considerably lighter. Given the lower up-front investment of time and budget, the incentive to stick with a product is also lower. If a customer fails to see rapid value from your product, they are likely to move on to one of your competitors.

It’s often easier for customers to try a new product than to work with an existing vendor to ensure that the product works the way they need it to. I have witnessed many organizations sign on with a SaaS vendor only to drop them several months later and try another.

From the customer’s perspective, signing a SaaS contract doesn’t necessarily mean the end of the buying process. In fact (and this is where the floor drops away), while your sales team is ringing the gong and marketing celebrates another pipeline goal attainment, your customer may still be in an extended stage 3: exploring their options.

“It’s often easier for customers to try a new product than to work with an existing vendor to ensure that the product works the way they need it to.”

What This Means
Most marketing teams disengage from the customer’s journey at the point of purchase, just as the customer embarks on the most important stage of the whole experience: building business value from the product we sold them.

Buyers are our champions inside their organization. As a marketer, it feels somewhat disingenuous to abandon them just as they sign the contract. True, they may now be in the hands of other departments like account management, professional services and training, but those teams engage in tactical endeavors, and they often interact with different
customer stakeholders. But what about the decision makers we’ve catered to throughout the buying process? What happened to the strategic visions we painted for them? The industry insights we shared? Why should the story end here?

The customer’s journey does not end with the purchase, and we have SaaS to thank for making this painfully obvious. Marketers must extend the journey map beyond the purchase, continuing to support buyers as they derive business value from your product.

To that end, updated buyer journey maps should include a seventh stage: derive value.

Any organization that wants customers to succeed (and remain customers) needs to reassess the effort and focus they dedicate to this seventh stage. While many technology vendors promise to be their customers’ partner for success, few have actual programs to back it up, and fewer still engage product marketing—the authority on buyers and technology solutions— to help drive this effort.

Here are four thoughts to consider:

Customer retention is not the refunds department. Sales and marketing professionals are acutely aware that it costs more to acquire a new customer than to keep an existing one, yet many organizations still view retention as a reactive measure used to salvage unhappy customers. Instead, customer retention should be a strategic marketing function to match demand-gen. Customer retention should work closely with product marketing, campaigns, sales and services groups to develop programs and touch points that actively help customers reach their business objectives and move forward.
Don’t stop being strategic after your prospect becomes a customer. Many organizations shift to end-user marketing after the purchase (“here is our feature-of-the-week email campaign”). Facilitating end-user adoption is important, but not at the cost of ignoring decision-makers. After the go- live, your target buyers are still there, evaluating your product for success. Are you confident they will still believe they picked the right vendor when they pay your next invoice? It’s important to stay engaged in their efforts and continue to add value and inspire them. For example, developing and sharing a maturity model can help position your products alongside their long-term strategic business objectives and establish a framework for partnership going forward.

Think of it as a buying cycle within the buying cycle. Many organizations “buy to try” SaaS solutions and look for rapid proof of value as an indicator of success. Think of it as an early proof of concept at stage 3. If your organization can proactively take on some of that burden of proof, you stand a better chance of turning stage 3 into stage 7.

Celebrate the contract. It’s a big deal to sign a paying customer, and a lot of people work hard to make it happen. But for customers, the purchase is just the beginning, and your team should view it as a milestone for your marketing strategy, not the end goal.

We live in an era of seemingly endless options. Consider how many times you have downloaded a new app on your phone, tried it for a few minutes and then promptly uninstalled it when you realized it did not meet your needs. Today’s B2B buyers have a similar mindset. If you fail to help buyers actualize the value of your product after purchase, it won’t take them long to start looking at the next vendor.

 

Branding and Lead Generation: Battle or Balancing Act?

Author: Sheila Kloefkorn, Pragmatic Marketing Inc

It seems there is a never-ending competition for customer mindshare. We all want prospective customers to consider our brand. But we also want them to know who we are and what we offer long before they make a purchase.

For many executives and product managers, the decision to focus marketing efforts on brand awareness or lead generation can feel like a constant wrestling match. On the one hand, brand marketing efforts help expand audience size. On the other hand, lead generation helps pinpoint a group of individuals who are willing to exchange their contact information for your content.

The good news is that you do not have to let awareness and lead generation tactics constantly battle it out. In fact, when used strategically and effectively, the two methods complement each other.

The key to determining the right balance between branding and lead generation is to realize that while each has a certain ebb and flow, the two strategies must work hand in hand to be effective.

Brand Awareness

To achieve the right balance, it’s important to understand the premise behind both marketing strategies. As you know, everything you do drives your brand: the quality of your product or service, the experience of using it, the way your company responds to problems, the way customers feel when they have an issue.

Loosely defined, brand awareness is your company’s visibility to the public. It is the emotions and attitude the public associates with your organization. When someone searches for a product or service within your industry, you want your company to come to mind.

Companies are increasingly focusing on branding via content marketing. HubSpot and Fast Company are two examples of companies that do it well.

HubSpot continuously produces useful branded content that has earned them widespread recognition and trust as an industry thought leader. From videos and white papers to webcasts and ebooks, HubSpot consistently develops content B2B audiences desire, while simultaneously promoting their brand. Even if viewers haven’t invested in the company’s software, it is likely they have downloaded a piece ofHubSpot’s valuable content.

And while it may feel like infographics are a dime a dozen, progressive media house Fast Company has figured out how to use them to inform (and entertain) its C-level audience with original and compelling content. Not only does Fast Company promote their brand by giving readers what they want in the form of powerful, quick chunks of information, but they also use social engagement to boost sharing and drive results.

To effectively increase brand awareness, several factors must first be in place.

Brand Foundation. Your company’s website is your brand’s foundation. Is it functional and user-friendly? Is content fresh, relevant and SEO-optimized? Make sure the landing pages and forms work and that your site is mobile responsive. And what about traditional marketing? Make sure your brochures and other printed materials are up to date so prospective customers can easily learn more about your products or services.

Message and Positioning. Be clear about the products or services you want to sell. What is your brand’s message? Does your product or service provide a solution to customer needs? More important, can you fully understand how your product or service works for the consumer?

Diverse Content. Once you have garnered attention, it’s important to actively engage with your customer. And engagement means content, such as social media, video, blogs, images, graphics, infographics and more. Not all customers look for you the same way, so make sure they can connect with you in a way that’s comfortable and appeals to their preferences.

Thought Leadership. Without question, today’s customers are a research generation. They thoroughly review items, visit multiple websites and scour background information before deciding to buy. As a trustworthy brand, you must prove yourself as a valuable resource and industry thought leader.

Lead Generation

Capturing leads is one of the most crucial parts of content marketing. When done properly, high-quality, relevant content draws users in, enabling lead capture while simultaneously boosting your brand’s SEO rankings.

Lead generation usually results in a specific call to action, as well as a distinct value proposition. And while it does not always require brand awareness, lead generation is far more effective when the two are working hand in hand.

To be successful with lead-generation efforts, start with a solid plan that includes the following steps.

Plan your campaign. What do you want to achieve: leads or product sales? Be sure to further reinforce the purpose behind your content. Create downloadable opportunities for users to connect with you via landing pages, infographics, case studies or white papers.

Provide collateral. As a marketer, it’s important to understand the difference between a pull campaign and a push effort. Use collateral to drive leads and begin a nurture funnel. Remember, simply because someone is not a hot lead does not mean they are not worth the sales-cycle effort.

Gather and analyze data. Any time you encourage customers to sign up for a webinar or interact with one of your publications, you’re engaging them. And that means you are gathering data, plain and simple.

It Takes Two to Tango: A Careful, Yet Strategic, Dance

In this day and age, focusing on traditional marketing approaches to define and shape your brand is simply not enough. The key to any effective marketing plan is to discover the right balance between brand awareness and lead generation.

To further convince yourself, go online and scan through every big brand in the market such as GE, Accenture and Emerson and see how smoothly and seamlessly they have managed to combine these elements to create a perfect marketing plan.

Some Final Thoughts

Today’s brands cannot expect to generate leads and drive conversions for the foreseeable future if they are not also continuously enhancing awareness and building the credibility of their brand.  Brand building and lead generation are interrelated. For ideal growth, you must use the right amounts of both. There should never be two polar sides in the process, but instead, a flexible range to achieve the right balance between the two.

The Most Successful Brands Focus on Users — Not Buyers

Author: Mark Boncheck & Vivek Bapat

What makes a brand successful in the digital age? A joint study by SAP, Siegel+Gale, and Shift Thinking suggests that digital brands don’t just do things differently; they also think differently. Where traditional brands focus on positioning their brands in the minds of their customers, digital brands focus on positioning their brands in the lives of their customers. Furthermore, they engage customers more as users than as buyers, shifting their investments from pre-purchase promotion and sales to post-purchase renewal and advocacy.

As part of our study, we conducted an online survey of more than 5,000 U.S. consumers and asked them about 50 different brands, both digital and traditional. We asked them about their perception, usage, preference, and advocacy for the brands. We also supplemented the survey with well-known brand rankings, Net Promoter Scores (NPS), and an analysis of their marketing expenditures and strategies.

We found distinct differences between legacy/traditional brands and newcomer/digital brands. For example, consider the following “brand twins” – pairs of legacy and newcomer brands that compete in the same industry. In every case, the legacy brand rated higher on the statement “Is a brand that people look up to.” But the newcomer brands all rated higher on the statement “Makes my life easier.”

  • Airbnb vs. Hilton/Marriott
  • Dollar Shave vs. Gillette
  • Red Bull vs. Coca-Cola
  • Venmo vs. American Express/Visa
  • Tesla vs. BMW

There were similar differences in how people’s brand perceptions are formed and reinforced. Respondents were more likely to hear about legacy brands through advertising and traditional media, compared to digital brands which are more often discovered via social media and direct word of mouth.

Overall, we found two distinct clusters, which we have categorized as purchase brands and usage brands:

  • Purchase brands focus on creating demand to buy the product, while usage brands focus on creating demand for the use of the product. Consider the makeup department of a department store. The whole focus is getting you to buy the product with samples and professional makeovers. By contrast, Sephora and Ulta provide instruction, community, and services to help people feel confident in being able to use the makeup themselves when they get home.
  • Purchase brands emphasize promotion; usage brands emphasize advocacy. Vail Resorts remade their entire marketing strategy with a program called EpicMix. It’s a social network for skiers that uses gamification, performance data, and photos as social currencies that skiers want to share with their friends. Most other ski resorts focus on promoting their snow-making abilities and giving discounts on lift tickets.
  • Purchase brands worry about what they say to customers; usage brands worry about what customers say to each other. For example, where traditional hotels put more emphasis on the content in their advertising, Airbnb puts a greater emphasis on the content generated and shared by hosts and guests about their experiences.
  • Purchase brands try to shape what people think about the brand along the path to purchase; usage brands influence how people experience the brand at every touchpoint. Apple Stores are an example of this shift, from the removal of a checkout area at the front of the store to the prominence of the Genius Bar. Where other stores are focused on making a purchase, Apple Stores are about having an experience.

The simple view would be that traditional brands are purchase brands and digital brands are usage brands. But there are exceptions, including brands like Visa, FedEx, Lego, and Costco, which exhibit many of the characteristics of usage brands. We suspect that the nature of their products, culture, and business model leads them to more of a usage mentality. They think of customers less as one-time buyers and more as users or members with an ongoing relationship.

The difference between purchase and usage brands can be seen through the lens of the “moments of truth” method that has become a cornerstone of customer experience design. Purchase brands focus on the “moments of truth” that happen before the transaction, such as researching, shopping, and buying the product. By contrast, usage brands focus on the moments of truth that happen after the transaction, whether in delivery, service, education, or sharing.

The benefits of shifting from purchase to usage are reinforced by our research. Survey respondents show more loyalty to usage brands. They had stronger advocacy in the form of spontaneous recommendations to others. And they showed a higher preference for usage brands over competitors, not just in making the purchase but in a willingness to pay a premium in price. On average, the usage brands were willing to pay a 7% premium, were 8% less likely to switch, and were more than twice as likely to make a spontaneous recommendation of the brand.

Golf coaches have long known what marketers are figuring out: the best way to hit the ball is to focus on the swing and follow-through.

Companies looking to exploit the branding potential unlocked by core digital technologies need to make the shift in their engagement with customers – from purchase to usage. These changes fundamentally require rethinking strategy, organization, investment, and measurement. In many organizations, marketing comes after product development. But a usage mindset requires a closer relationship between marketing and product development because the brand and experience are increasingly one and the same. Typically at purchase brands, customer service and loyalty take a back seat to marketing campaigns and lead generation. Usage brands, by contrast, elevate customer service and loyalty from resource-starved cost-centers to key drivers of growth and profitability.

The role and investments in advertising must also change to shift toward a usage model. Purchase brands try to create differentiation in brand perception in the hope it will influence consideration and purchase. But usage brands are focused on how their products will make a customer’s life better. The role of advertising for a usage brand becomes getting useful content and experiences into the hands of customers. The message becomes “Look how we can make your life better now, before you’ve even spent any money with us. Just think how much more we can do if you become a customer and use our product or service.”

The shift from purchase to usage has implications for measurement as well. Ad impressions are valuable, but what matters most is engagement. Usage brands look at engagement through a much wider aperture. They recognize that some of the most meaningful activity happens outside the sales funnel. Do people find the content created by the brand to be relevant and useful? Are people actually using the product? Are people spontaneously talking about the brand or product? A usage brand marketer would rather have a five-star rating in their online reviews than win an advertising award at Cannes.

More broadly, the shift from purchase to usage suggests that we need to rethink how we measure brand equity. We’ve all seen the annual brand ratings put out by the top firms. But they measure how much a brand is worth to investors more than consumers. Furthermore, their focus is on how people perceive the brand rather than how they experience the brand. Companies that get too focused on winning in the ratings will find themselves ultimately losing in the marketplace.

Although our survey emphasized B2C brands, we believe the Purchase and Usage mindsets are equally, or even more, relevant for B2B brands. Business solutions tend to have longer life cycles than consumer products and there is an even greater opportunity to deliver value outside the sales funnel. In addition, many B2B companies are moving to cloud-based services with membership and subscription-based business models. With these models, the purchase is just the beginning of a long-term relationship. The economics are driven primarily by renewals rather than by initial purchase. In turn, renewal rates are driven not by what buyers think about the brand, but what users experience of the product or service. The key is to think about prospects not as buyers, but as future users.

To review the full blog visit: https://hbr.org/2018/02/the-most-successful-brands-focus-on-users-not-buyers