New Year, New Journey

In Mid-December, I joined a new team—which you could probably figure out by the lack of activity on the blog.  Even though I have enjoyed, and learned an incredible amount about sales and marketing during my twelve 12 years with MarketBridge, I came across an opportunity that was too good to miss.  

For years, the Big 4 (WPP, IPG, Omnicom and Publicis Groupe) had rolled up agencies to create vast global networks with a broad spectrum of services to meet the needs of their global client base.  The strategy of following the money and clients had served them well, and it grew the business substantially over the years.  

However, it left a gap in the market. The “big” focused on big and primarily consumer ad budgets, leaving the complex needs of business-to-business companies unmet. For business-to-business companies, having a big ad budget isn’t necessarily as important and/or effective as targeted, highly customized one-to-one communication,…but it does matter to big agencies. 

A few smart folks, including Rick Segal, CEO of the former HSR Business to Business headquartered in Cincinnati, and Richard Glasson, CEO of Gyro International, out of London, recognized this opportunity and the need for a new agency model. 

The group has been busily assembling a collection of best-in-class B-to-2B agencies with services ranging from traditional direct marketing to leading-edge digital shops.   The agency, now called GyroHSR, combines the names of two leading, awarding-winning agencies. 

Customer feedback on the new agency model pointed to the need to add greater expertise and experience in understanding channels.  With the noise and confusion surrounding Web 2.0, and the necessity to increase precision with marketing investments, adding a new team member was essential.        

That’s where I come in. My role on the team is to add a bit of some little left-brain thinking to the right- brain creativity, blending the best of the art and science worlds.   

I’m starting a new practice that will focus on helping clients better understand how customers buy and what channels they prefer to use during that process.  The Channel Marketing practice is going to be based in a new Washington, D.C. office, opening this month.

Over the next few months, I’ll be tweeting and posting about my assimilation into the new world of art.   My “online diary” should provide an interesting view into the agency world through the lens of a left-brain consultant.  I can tell you this already: We definitely do see the world differently, not better or worse. Just differently. Stayed tuned. It should be an interesting journey. 

Growth in 2010...It's Back to the Future

After speaking with a number of companies and I'm starting to notice an interesting trend.  Customers are making their way back to companies and they’re coming after “core” offerings (even those offerings may have been passed over by newer and “sexier” services).

In the boom, companies found themselves venturing into new markets, creating new services , etc. that came with the rising tide, especially in the Financial Services industry. In many industries, these services were build on flawed assumptions on market demand, a companies ability to deliver, etc.,…it happens in every bubble.

What’s interesting now is as the recovery is beginning, companies are starting to see customers return but they’re buying services/products that may not have purchased in years. With budgets smaller and harder to spend, customers are returning for services and products with which they are familiar without the “bells and whistles”…the solid, dependable, low risk “core” products.

For example, a friend of mine, who runs an agency that was built on serving the needs of Fortune 500 Corporate Investor Relations groups, had recently repositioned the firm as a “brand consultancy.” She said that they have recently seen an upturn in their business, and it’s been customers coming back to them looking for the same IR services they offered years ago.

Some companies have already picked up on this trend and have incorporated it into their sales and marketing efforts. Take a look at any Bank website and you’ll see that they’ve jumped in the DeLorean and its 1985 all over again.

So why bring this up now? Well, I’ve also heard folks talking about the path of growth and recovery for them is about “new innovation.” Ah, Ok as long as you’re looking for new innovative ways to sell and market your core products. This is not the time to experiment with “new.”

If you’re looking for growth next year…start by going back to selling what put the “equity” in your brand.

Why Product Companies Can’t Build Solutions - Reason #1

I’m working on my umpteenth “transition the organization from being product led to solution focused…” project. In today’s market environment, I imagine other organizations are pursuing this strategy as a way to improve margins, increase sales, etc.

The challenges facing companies that venture down this path are fairly consistent and complex…and certainly not easily described or solved in a post. With that said, I thought it might be helpful to describe how organizations get themselves into this situation and share some ideas on how to get moving in the right direction.

“Solutions” typically evolve in two ways at product oriented organizations, none of which are strategic.

• Internally - Someone in the product group or sales organization notices a trend - if a customer buys one product they most likely will buy another related one (if this, then that).
• Externally - Customers force the organization to integrate products and/or services (something Lou Gerstner took note of when he was at Amex that eventually led to the greater focus on services when he came to IBM).

The company then realizes (usually late) that this can lead to premium pricing and higher margins, increased share of wallet and customer loyalty, etc., and thus the journey begins. The problem is that they over estimate the ease of scaling solutions because:

• The last mile - no one trains the sales force, or the sales force doesn’t have the skill set, and/or no one has figured out how to comp on selling a “solution”…I’ve seen the last one a dozen times. 
• The solution is TOO customized – really good solutions are typically highly customized, you build the “solution” with the customer.  The challenge then becomes finding another customer and/or group of customers that looks like that one.  As a result, you can’t scale the solution. Put your hand up if you’re heard that one before.

So what do you do about it? The scenarios I described are symtematic of the “dipping the toe” approach to solution development. To successfully transition the first thing has to happen is that the company must make the COMMITTMENT.

It sounds easy but this is where most organization fall down. You will not be successful if you only “half ass” it. Building real solutions that scale requires time, investment, a new group/organization and probably new people. Understand why companies fail now?

 Some thoughts on how to do it right

I've commonly seen two successful approaches to starting the transition. The first is internally focused and involves evolving the product group. Best-in-class organizations that have made this journey start by adding or creating an “application” group.  This is commonly seen in the Hi-Tech industry.

This group begins collecting market data on customer trends looking for broad based technology, competitive or usage trends. The goal is anticipate and understand how the company’s portfolio of products and services can and/or will be used when applied to certain situations (use cases).  This then begins the solution development process.

The upside to this approach is that the products typically “snap together” seamlessly and are easy to install. The downside is that they sometimes miss the mark with customers because products get over engineered and lose sight of customer needs.

The other approach is to evolve from external side and develop a segment marketing group.  In organizations that can’t, or won’t, evolve their product organizations, I have helped companies build a segment marketing group that integrates products into market aligned solution sets.

The group is aligned to unique customer segments and uses customer research, feedback from the sales channels, etc. to develop solutions based on the specific needs of that segment. This approach is commonly seen in the financial services and communication industries. 

The upside of this approach is that solutions developed at the segment level have very compelling value propositions because of the tight alignment with customer needs. The downside is the solutions don’t always live up to the hype.

Whatever path your organization takes is a step in the right direction. It shows that the organization is committed...but it is also only a starting point.

More detail on how to complete the journey in future posts.

Is Web 2.0 Over for Internal Use?

There’s been some tweeting lately about a recent Watson Wyatt Web 2.0 survey published in May. The odd thing about the report is that the headline "Web 2.0 Initiatives Continue to Gain Acceptance at Companies, Watson Wyatt Survey Finds" and the PR spin don’t accurately represent the research findings.

The piece begins, “Despite their relative newness, companies are embracing Web 2.0 technologies such as social networking tools, blogs and webcasts for internal communications and as part of their overall technology mix, according to a new survey by Watson Wyatt, a leading global consulting firm.”

However, looking closely at the research, you’ll see that this is not necessarily the case. The survey actually finds that top technologies mentioned in terms of increase usage in the downturn are all Web 1.0 tools; Intranet, email, and webcasts. Why? Because people revert back to things they know (safety and security) and move away from trying something new and unknown, especially if it requires time to learn.

As for Web 2.0, 13 % are planning to increase the use of social networking tools in the next 24 months, and 12% will increase the use of blogs for communications. We’ve all seen the low numbers before, in fact it’s very similar to the research we did last year and we’ve all said “give it time, it’s new, it will take time to take hold, etc.” We also found that only 12% of marketing budgets were allocated towards Web 2.0 tools. 

The problem now is that those numbers aren’t moving up, and reducing costs (click for a good free McKinsey Economic report, see slide on pg. 4) is the number one issue on CEO’s minds.

Companies adopting Web 2.0 technologies in overall technology mix

The most eye opening slap of reality is that 60%+ of firms say they are not planning to use/implement the following over the next 2 years; Social Networks, Blogs, Wikis, Podcasts, RSS feeds…all Web 2.0 tools. Again, the research was focused on the use of these technologies internally.

The important learning to take away from this is that it’s now time to start looking at the data for what it is really saying. Don’t get me wrong here, I’m big fan and want to believe in the potential of Web 2.0, but it’s time for reality check. If we are going to be successful as marketers we have to start proving the business case for these tools…and back it up with data.

Is B2B Web 2.0 Over Before It Ever Started?

Not yet, but it’s getting close. The potential suspects in its death…the recession, the CFO and the Legal Department.

Suddenly, every legal department around the country has become the de facto Web 2.0 governance committee. What doesn’t get killed, modified, or mangled is left to the CFO to cut. Senior executives, who for the most part lack an understanding of the tools, are growing tired of all the noise around Digital, Web 2.0, Social Media, etc. 

They are now directing their organizations back to what they believe to be proven strategies (as they say in the FS industry "past performance is not indicatve of future results) and tactics (core products, best customers and traditional sales & marketing tactics, like DM). It’s back to the future.

You’re mission, if you choose to accept it, is to find proven “sweetspots” for Web 2.0 in your organization now…and put it in your 2010 plan.  Here are a few “no brainers” and/or proven areas that have shown to be impactful and/or demonstrate measurable value:

• Twitter - customer services applications, awareness building for events, new content, etc….no brainers
• Blogs – thought leadership, using them to help explain applications of products, credibility and audience builders…all winners and measurable.
• VODcast – similar to blogs, keep them short and on point, and work on getting the cost down. 
• Wiki’s – defining internal nomenclature, taxonomy, and knowledge management all winners and well worth the effort.

As for social networks, I have a few thoughts that I’ll share in my next post. Here’s a preview.

Recently I met with David Godes, a professor at the Smith School of Business at the University of Maryland. David and I got together to discuss our shared interest in sales processes, sales & marketing integration and social networks (we first meet when he was an associate professor at Harvard Business School, after he wrote a case study on the work we did with Avaya on managing integrated sales and marketing pipelines).

David and a colleague wrote an article published in the Harvard Business Review in 2006 on Sales Networks.  After reading the article several times, I think it’s a useful guide for leveraging Social Networking tools to enable the sales forces. Although the study of social networks has been around for years, and it served for the development of social networking tools, the application for sales hasn’t really been developed. I believe this holds tremendous opportunity to discover “killer applications” for social media tools.

For now, think about this, the first wave of Web innovation (Web 1.0) was followed by a recession (Dot.com bust) that separated the “winners” from the “losers”.  Successful technology innovations need a “killer app” to take hold. Often times it is very different from what the technology was originally designed to do (Myspace, as an example). We are now making our way (hopefully…and slowly) out of a recession that was preceded by the second wave of web innovation…what “killer applications” have you discovered - are they sustainable, and can you defend your investment in them going forward?

Do it quickly…time is running out.   As Tim Washer said at the B2B Social Communication when asked about IBM's very funny video series "The Art of the Sale"; “things have changed in our social media governance and policies. I don’t think I could do this again given the current environment.”