Partner Marketing Model Webcast

On June 16th, I hosted a live webcast along with Bob Ray, President of GyroHSR's San Francisco office. The theme of the webcast centered on how new technology trends, like the Cloud, and shifting partner business models are opening the door for vendors to redefine the partner relationships.
Other highlights include:

• Tech trends have shifted the focus of executives, and the recession has caused customers to be more cost conscious
• A new focus on professional services/managed services has caused a longer sales process which means reps and partners need help selling.   
• The average ramp time for a productive IT sales rep has gone from 7 to 10 months
• Generally, IT execs do not feel sales reps UNDERSTAND their business
• Engagement through data sharing, pre-packaged marketing solutions, and program planning with partners are ways to create more mindshare.

The rehearsal presentation was recorded and is now available OnDemand Presentation.  
Channel Insights Newsletter To learn more about GyroHSR’s Channel Marketing Practice and subscribe to the GyroHSR Channel Practice Newsletter please visit: Subscribe here 

Inside the Ritz Carlton Customer Experience Model

For years, the Ritz-Carlton has been recognized for its ability to delight customers.  Although I’ve used them frequently as a best in class example for clients, I never truly experienced what makes them so good…until now.

My family and I just returned for our summer vacation where we had the good fortune of staying at the Ritz-Carlton on Grand Cayman in the Cayman Islands for the week.  While we originally booked the Marriott, a special off-season promotion through American Express and the loss of our family pet that week led to a change of plans.  

The experience was memorable even though the weather wasn’t exactly…we now understand why it’s called the off-season.  Nonetheless, during our stay we were continually delighted by the service we received. 

The Ritz-Carlton has created a perception of exceptional quality and service, and the staff delivers on it.    They are in the hospitality industry, and as a result it’s “people” business.  But their model is not just as simple as ‘serve the customer.”  They add interact, engage, and listen to the customer.  So simple and intuitive that it makes you wonder why other companies can’t do the same.   

 

Examples of how they bring this to life:    

•  The Customer Experience – not only do they understand how you might want to spend your time on vacation, they anticipate it.   For example, in the mornings by the front door they had a jogging trail map, cold towels, bottled water, and a sign welcoming back joggers.  They also set up a water cooler at the water sport station anticipating that guests want water given the amount of salt water inhaled while snorkeling…maybe that was just me.

• The Little Things – If you preferred to run indoors, they had a full service health club complete with trainers.   The most interesting thing in the gym was a 2-inch piece of a foam noodle, commonly used to float in a pool, in the cup holder of the treadmills.   It served as shock absorber, and it elevated your bottle making it easier to reach while you where running.  I’ve been in a lot of gyms in my life and none of them have had this…only the Ritz.  Most likely this insightful and accommodating amenity came from listening to customer feedback. 

• Going Beyond the Role –The doorman was our personal tour guide.  He told taxis were to take us for dinner, marked up maps on top snorkeling spots when we rented a car, and gave me directions on where I should run in the morning.  And of course, he inquired about our experiences each time we returned.   Similarly, our waitress at breakfast was also our personal shopper.   She told us the shops with the best deals, the best places for kids, etc.  Despite their title and/or their role, these employees played an essential part in defining our customer experience by going above and beyond the call of duty.

• It’s about the BRAND – They understand and maintain the brand like few others.  The tennis courts by Nick Bollettieri, the golf course designed by Greg Norman, the world famous Silver Rain Spa from Sweden, and for good measure Tiffany’s onsite.   Brand was everywhere, on water bottles, towels, the morning newsletter, etc.   A premier brand that only associates with other premier brands. 

• Creating the Perception of Value – This gets back to understanding what guests want to do during their vacation.   The Ritz charged a $35 a day resort fee.  That fee included the use of water sport equipment like snorkeling gear, kayaks, and paddleboards, but then they charged for other items like Hobbie Cat sailboats, etc.  The nearby Marriott on the other hand had outsourced their water sports to a local vendor that charged $15 a day for snorkeling gear, and $25 dollars an hour for Kayaks, etc.                                                 With a reef just in front of both hotels, guests at both snorkeled almost every day and/or used the gear to snorkel at other locations around the island.   For a family of four, we paid $35 a day for 4 snorkel sets plus the use of the other items listed above.  Marriott guests paid $60 a day simply for the snorkeling gear.  Anticipating that guests would use snorkeling gear daily, The Ritz built it into a daily fee which we learned about at the beginning of our stay, instead of feeling like we were being “nickeled and dimed” to death each time by renting daily.  Packaging “solutions” is a constant challenge for most organizations.   The Ritz understands how customers want to use their products so it can build high value solutions.  

• Technology – the staff on the beach and at the front door wore headsets and microphones.   As I mentioned earlier the staff took the time to personalize your visit and get to know you and your name.  As you went from one location to another they would alert their counterpart that you were on your way.  This provided them time to greet you by name and to anticipate what you might want…towels for the beach, a taxi, etc.  Simple CRM, applied in a very effective manner.

• Constant Collection and Use of Customer Information – Regardless of where their staff came from (France, Bali, England, etc.) they all took an interest in their guest’s stay.  They collected information about what they liked, disliked, and then preserved it to pass along to other guests.  In a sense, staff members built their own internal Trip Advisor based on guest feedback.  For example, one night we wanted to go to a Mexican restaurant for dinner.  I searched in a local restaurant guide and found one.  When I asked the Concierge about it, she said she never heard of it, and recommended another restaurant.  Finally I found a person at the front desk that knew where it was, but he proceeded to recommend the same restaurant as the Concierge.   Deciding that the other restaurant was too far, we went with the one I found. It was terrible.  No one knew of it for a reason.  Even the Taxi couldn’t find it despite having been on the island for 20 years, and it turned out to be only 2.5 miles from the hotel.

Ultimately the secret to their success is simple…they understand, personify, and cherish the brand, and they engage and listen to the customer.

  

Cloud Computing - Vaporware?

The Merriam-Webster’s Online Dictionary defines a cloud as a “visible mass of particles of condensed vapor.”  According to CIOs interviewed for an article in the June edition of the Harvard Business Review magazine, cloud computing might as well be defined as “vaporware.” 

The article includes research by Gartner Group VP, Mark McDonald, who found that CIOs interest in the cloud has grown from 5% in 2009 to 37% earlier this year.  However, three out of four respondents who said they were interested, reported little interest in the three key technologies it entails: server virtualization, service-oriented architecture and SaaS (software as a service). 

These figures may entice you to conclude that this is a great opportunity for a salesforce to provide value in explaining the Cloud and define a company’s solution; a rare situation where the salesforce can be “solution sellers”. Unfortunately, this is not necessarily the case, according to a Forrester’s Technology Buyer Insight Study: Are Salespeople Prepared for Executive Conservations?

IT executives interviewed for the April 19, 2010 study, only 15% of executives believe that their meetings with salespeople are valuable and live up to their expectations.  

Reasons given according to the report:

• Business leaders (24%) don’t believe salespeople are knowledgeable about their specific business.   
• Only 34% of buying executives said salespeople understand their roles and responsibilities. 
• And across the board, only 38% feel that reps are prepared to answer their questions. 

Could this be a case of the blind leading the blind?  Confusion around cloud computing even occurs at the highest levels of leading Information Technology conglomerates. One story accounts for the CEO of a large information technology firm asking his senior executives to explain cloud computing to him. When no one could convey a clear answer, the CEO fired back that if they can’t sell it to him, then their company cannot sell it to customers.

There is no doubt that the Cloud is making as much noise as any good thunderstorm.   Companies are reallocating resources and investments to the Cloud.  Countless marketing dollars are being spent to get companies in the consideration set.  As with any good technology trend the hype exceeds the reality.  

The real challenge seems not to be marketing the Cloud, but rather selling it.   Those companies who best enable their sales people to break through the noise will reap the greatest benefit.   

The New Partner Marketing Model

In the “good old days” companies like IBM built a ubiquitous brand with unique products and then dictated their terms and funds to sales channels. Brand advertising was typically done on one of the three major TV networks aimed at the mass market to create a “pull” that would have customers do whatever it took to get those products regardless of price, location or availability.

Product marketing teams would assemble sales and marketing material, and route it to partners via partner portals or directly to their offices assuming that the partner had everything they needed to sell the company’s products or services. And that worked, especially with those partners who were former employees.

Business was good and predictable, but then things began to change. More channels became available, and as a result, it was harder to reach and influence key customers; the window of having a truly unique product shortened, and partners started gaining a greater choice of products to recommend, with various incentive programs.

Gradually the power of the transaction was shifting further down the value chain leaving companies with less influence over the point of sale. Partners, now armed with options and leverage, became less willing to cooperate with the demands of the manufacturer.

In response, the manufacturers began exploring how to realign themselves as a key influencer and along the way they discovered the following:

• Inconsistencies in communication about marketing programs, incentives, service and who owned the customer, left partners confused and frustrated.
• Partners felt like they were getting little, to no, marketing support from manufacturers despite having piles of marketing material and funds.
• A concerning trend was starting to develop, in which partners were using less of the marketing development funds (MDF) available to them.

The old “push” product and programs through partners and “pull” customers to your products through mass marketing was no longer working. It was time to rethink the model.

To learn more about the future direction of partner marketing request a copy of the Channel Insight white paper by register for the live webcast by June 15th 2010 at www.gyrohsr.com/channelforum.

The webcast is scheduled for 12 PM on June 16th 2010 and will include a discussion of the New Channel Marketing model that is evolving in the Technology Industry.  I will be co-hosted the webcast with Bob Ray, President of the San Francisco office.   Hi-Tech clients managed out of that office include VMware, Sybase, Adobe, as well as others. 

B2B Social Media and the Upside Down Funnel

THIS POST WAS NAMED 1 OF THE BEST B2B SOCIAL MEDIA POST OF 2010, also a TOP 111 POST ON B2B MARKETING ZONE FOR 2010

In my post on 6 Steps to Getting Control of Social Media, I mentioned the concept of an “upside-down funnel”.  I thought I’d spend some time explaining it in this post.  

As with most new technologies, social media is starting to “settle in” and common applications of the platforms are becoming known.   In many large B2B organizations, that means social media is finding a home in the marketing communications group, often landing in PR.  That seems fine for B2C organizations, however, I’m convinced that it’s the right spot, and/or the only spot for social media in B2B companies.  

The Upside Down Funnel

In most B2B organizations corporate marketing’s role is related to driving “top-of-the-funnel” activities.  From advertising,  PR, and now social media,  the focus is on creating awareness…and hopefully, driving consideration and preference. 

There is another opportunity that may not be considered, a part of the funnel where marketing, in particular social media, can play a valuable role.  

It’s at the very bottom of what I’ll refer to as the “upside down” funnel.   To find such an opportunity you have to think about a funnel that starts with once a prospect becomes a customer. 

Just as a sales funnel has stages so does customer relationship management (and I’m not talking about the technology).  Companies should be actively pursuing strategies and tactics to retain, expand, grow and then leverage customer accounts to win business.  This is where I think the “sweetspot” is for social media in B2B.

Here’s why: social media is about “consumers selling to consumers”, or “professional-to-professional.”  If a company does its job of nurturing and retaining customers, it should be able to transition from having a relatively unknown prospect, to a known customer, to hopefully, a well-understood customer advocate…at least that’s the goal.  

                        The Opportunity

If a company enables those customer advocates with social media it gives them a platform to spread the good word.  The potential of this opportunity is huge, and for the most part, being missed at most companies today.     

As we all know, word of mouth is the most effective marketing there is, enabling it with technology creates scale, and the ability to track it. To do this successfully, companies have to first identify this opportunity within their organization;  second, they have to change their current way of thinking about social media beyond its present use in marcomm and PR.  It means finding uses and opportunities within sales and customer service. Yes, listening to customers chat about your service on Twitter is important, but I’m talking about creative ways to use it for: 1) customer-to-customer referrals, 2) community building, and 3) facilitating user groups.  The goal is to find ways to emotional connect avid customers to the company and/or products, and then provide them with an outlet to communicate that passion. 

What to Do

As relationships deepen, customers begin interacting in more personal channels.  Through those interactions they are likely to share more intimate details about themselves, and their relationship with products/services and the company.   Companies have to be able to collect this information across channels to create a complete profile of a customer.  If this can be achieved, an organization will have everything it needs to begin enabling, influencing and studying cusomer advocates.

Finally, watch out for the “silo” effect.   Typically at least three different organizations will be interacting with the customer as the relationship develops.  But it’s only one customer interfacing with what the customer expects to be one company.  The organization has to be “in sync” because the last thing a company wants is to provide a customer with a platform for communicating the wrong message.  Turning an advocate into an adversary is not the goal.