Creating a Corporate Value Proposition

In my experience, one of the most difficult tasks for an organization is defining their corporate value proposition and their key differentiators: The ”Why Us” question.  We were in a meeting recently with a company and they told us that the last agency resigned from the account because they went through 400 iterations (not making this up) on the value proposition and still couldn’t agree on one.  

Organizations fail for many reasons when developing corporate value propositions: too little collaboration yielding no buy-in, a meddling CEO, a lack of a disciplined approach, failure to properly test externally, etc.  But in this particular case, the company’s past success was now causing confusing among executives as they plotted their future course.  

The organization enjoyed 25 years of strong growth and profit performance (prior to the recession).  A portion of this success was attributed to allowing the business units to operate nearly autonomously. However, that freedom came with a price: it formed separate cultures, brand identifies, logos, sales collateral, even the “language” that was used varied when talking about “what the company was, what they stood for, and what it should be in the future”.

As a result, tying the organization together under one umbrella message and value proposition was a huge challenge.  

Defining Value

Michael Treacy & Fred Wiersema, in their ground-breaking book The Discipline of Market Leaders, suggest that there are only three ways an organization can define it’s value and hence, how they define themselves in the market:

Each type requires different operating models, corporate cultures, and marketing communication strategies. While companies may be able to provide value beyond one category, they must first define their primary value definition through a competitive and self-analysis. Part of this review includes an evaluation of an organization’s ability to deliver the value that is defined through its core-operating model.

An assessment revealed the company to have good products, but it was not a product leader, in the example that it employed no Product Managers. It also had strong relationships with customers, but could not be considered “Customer-Centric” since it had just launched an Account Manager role a few months prior.

It was clear.  The company's success was built on a core-operating model that emphasized scale and efficiency.  The model delivered operational excellence, however, too many in the organization equated that with being "Walmart."  Because they were in they were a professional services firm this view appeared to lack the important customer intimacy component, with was true, given their customer retention and satisfaction rates.   

Being presented as “Operationally Excellent” despite the performance it could deliver (EBITA 20+%), wasn’t viewed as “sexy” enough.  For someone who interfaced with the customer on a daily basis to solve complex problems, that value proposition seemed inadequate and incomplete.  While these points were accurate, they were secondary value propositions. 

And this became a key insight.  Treacy and Wiersema point out that to determine the right corporate value proposition you have to look at how the company is delivering scalable and sustainable value to customers.  What we learned was that employees have a tendency to perceive the value the organization delivers through their own experiences (that are generally not scalable), and not based on the core business model.  

In some cases, companies have been able to successfully shift their core value delivery model, for example, from delivering a product to a service, and as a result need to redefine their value proposition and how they communicate it.  In other cases, executives can get caught up in trying to define the company’s value from their personal point of view even though the core business model has not changed.  There is nothing wrong in wanting company to be more than it is, the problem is communicating and delivering on it.  

If you find yourself in that situation, take a look at what customers value and how you are delivering it.  It usually starts with understanding what built the company in the first place.  Starting there will guide you to your destination with most of your colleagues in agreement…and in less than 400 rounds.

The Missing Social Platform?

On the flight to LA the other day I read an article about Evan Williams, cofounder of Twitter and Blogger.com.  In the article, Williams was asked what the difference was between Twitter and Facebook.  He said, “Twitter has information about what’s going on in the world that you care about and that’s different from Facebook’s value proposition, which is a way to stay in touch with people you know.”  Coincidently, The Social Network was the in-flight movie.

As I thought about those comments, and the movie, it exposed an area of our lives that seems to be missing from social platforms.  If Facebook connects us with our friends and family, and Twitter to “the world we care about,” what connects us in our daily lives?  I’m talking about our local area, city and neighborhood, our offline community, the world in which we live everyday. 

The more I thought about the need the more it seems like it’s not as much a social platform as it is a functional tool or in other words, an enabler; how can a platform make our lives easier by linking our social network with practical and time saving tools.

For example, my wife is a “room mother” at one of our child’s schools.  Her role is to plan, organization and host class events…and chase other parents to contribute time, money, food or all of the above.  She uses old Web 1.0 tools like email, a group mailing list, and the phone to accomplish her tasks. 

In addition, our kids are active in sports, which requires carpooling, registrations, getting directions to games, status updates on field conditions all done via separate web sites or portals.  On top of that our lives - thanks to mobile devices - now mix personal and business hours all throughout the day, and they often collide.  

So my hope for Web 3.0 is that it will evolve as specific applications of Web 2.0 tools that provide efficiency.  These applications will be developed through the greater understanding of how we live our daily lives.  The paradigm shift is moving from investing time online to maintain our presence (through FB, etc.) to having online tools that enable us to be more present in our offline world.  

What might that platform look like?  It’s mobile, and it could include any or all of the following:

• Reviews become Recommendations – components of Yelp, Tripadvisors, etc. for local restaurants and merchant, but also, reviews, recommendations and contact information for teachers, coaches, babysitters, etc.
• Groups become Communities – like a Linked-in or Facebook group organized around local groups/clubs you participate in, including church, school, athletic teams, etc.  Communities are built automatically when you register to join. 
• Discounts & Loyalty Programs become Active– a Groupon.com like application for local merchants, GPS and mobile enabled to pop offers in the store and automatically tracks your spend.   Additionally it would allow us to pool and direct our points to local groups (see above).
• GPS locator becomes an Status Alert  –  a mash up of GPS and Foursquare, alerting us to movement and activity of family members (especially teenagers) at any moment.
• Lists with Automated Fulfillment – this is a big one, a digital list builder that sync’s with Peapod (or other Grocery Store home delivery service), with a shopping cart threshold that will automate trip deliveries and credit coupons.
• Reminders become Personal Assistants – voice activated and controlled, adds and reads calendars.  Helping us remember school plays, play dates, birthdays and especially anniversaries. 

In the movie, Zuckerburg asked Sean Parker (co-founder of Napster) his advice about monetizing the site by selling advertising.   Sean tells him not to because FB has a coolness factor about it and advertising would kill; “like going to a really great party and telling everyone it ends at 11 pm.”

I’m sure that if I spent enough time on IGoogle or looking in various Apps stores, I could configure solution for my need, but that would take time, rather than give it.  What we “35-50 years olds” want is a time machine.   Hell, it could include advertising and it would still be cool.   Now that’s a great party…and we might even have the time now to attend.     

B2B Blogging Trends in 2011

Tom Pick and Tony Karrer, Ph.d., the guys behind two great sites: The B2B Marketing Zone and Social Media Informer, asked thought leaders on B2B blogging to answer some key questions:

• What do you see as key trends in B2B Blogging for 2011?
• Will anything be different in 2011 in marketing your business blog?
• What new challenges might exist in 2011 around B2B blogging?

They've pulled together the contributions from close to 25 B2B bloggers and extracted key ideas and trends into the following report:

B2B Blogging Trends in 2011

Some key points from the report:

1. Less than half of B2B companies have started a blog
2. By 2014 more than 160 millions Americans will be reading blogs
3. 50% of web visitors today are reading blogs 

My contribution to the white paper is found on pg.35.

Will the Commercialization of Blogging Kill It?  

Companies and Agencies have taken note of this fact.  Bloggers are constantly fielding calls from Agencies or Companies asking them to blog or mentioned a product or company in their post.  

One of the most popular blogs is totally dedicated to teaching others how to profit from blogging. Other digital “cottage industries” like Business to Bloggers, are recruiting “for profit” bloggers to hawk everything from baby clothing to gift wrap.

The question for 2011 is will blogs lose creditability with readers because of commercialization of the medium?  It is estimated that 900,000 new blogs are created each day, so we have to ask, which ones are only in it for the money? 

Expect new rating sites to come online and for Google to roll out tools that allow readers to rate blog sites. One thing is certain, how blogs are written, used, searched for, and rated will certainly change in 2011.  

Blogs play a vital role when customers are searching for product information: 70% of individuals turn to user or customer reviews or ratings before purchasing a product.  In addition, 90% of online trust recommendations from people they know while 70% trust reviews and recommendation from people they do not know. To understand the context of these figures, a mere 14% of individuals trust direct advertising!

The report is a good and quick read.  A helpful reference source as you evaluated your social media plans in 2011. 

Sales and Marketing Integration Post Recession and Social Media Adoption

For the last few months, I've been leaking sections of an upcoming white paper we've been writing.   Well, it is now ready for prime time and available for download.   To complete the tease, I'm giving the ending away.
OUTLOOK //
With smaller marketing budgets and aggressive user adoption of Web 2.0 tools, social media will continue to make progress on the fringes of the sales process (see Figure 7). Companies will find new application of social media for increasing awareness and opportunity creation with targeted audiences and continue to deploy tools to listen, interact and support customers.

As a result, sales and marketing teams need each other more than ever: Sales needs the customer insight and connection that marketing captures to accelerate the buying process; and marketing needs sales results to be able to show measureable evidence to defend and expand social media deployment and activities.

GETTING STARTED //

Buyer behavior has shifted permanently, and a result, companies need to adapt to this change. Research shows that 70% of companies will increase their social media investments in 2010 and 61% of marketers do not know how to get started . Included below are seven recommendations to consider while responding to the latest economic and technological changes:

1. Recognize that a permanent change has occurred. 

Social media and the effects of the recession are not going away any time soon. Customers are now more likely to start their buying process on a social media site than a company site, and that trend will only continue. Budgets will remain tight and customers will need to know that they are making the best decisions for their respective organization. As a result, they will continue to rely on objective third party experience with products and services.

Figure 7

2. Do not ignore the opportunity. 

The value of social media is not that it fills an existing gap, or breaks new ground, as much as it is an enhancement to something that already exists—for B2B organizations social media enhances word of mouth, customer engagement, and relationship management. To determine the value of social media, business leaders have to experiment with applying social media to those three areas. According to the Marketing Leadership Council, CMO’s who advocate for and lead social media efforts are three times as likely to drive business results as those who do not.

3. Understand the difference between inbound and outbound. 

Customers may share information with other customers, as well as employees in the organization that are not their Account Manager. Enabling the organization to digitally listen to customer conversations can provide the sales force with a whole new view into customer preferences and opinions.

4. Plan and coordinate the Customer Experience. 

Social media offers a host of new channels for customers to interact with the organization and with other customers. Companies will need to determine how they will interpret, filter and aggregate inbound information, and if, how, and where they will respond. According to recent research, the customer experience has four times more impact on preference and intent to repurchase than does the quality of individual touch points.

5. Make it about them. 

Business executives primarily use social media to stay current on news, network with other peers, and to advance their careers. As a result, organizations need to understand how to meet this need, and how facilitating this interaction can help them better understand customer’s behaviors, interests, and motivators. Sales and marketing should work together to determine how the organization’s products and services could support and enhance the customer in their role.

6. Demonstrate the value to sales. 

The sales organization will want to understand how social media activities will create a tangible business impact on leads, sales, and retention. Marketing will have to translate how customer engagement can have an impact—current research will further this aim as leading work is already demonstrating a strong link between engagement levels and retention.

7. Think about Relationship Management 2.0. 

Moving forward, sales,marketing, service and customer communities may all play a role in managing certain components of customer relationships. As a result, organizations should segment and map customer buying behavior and channel preferences on a regular basis, which may challenge the way organizations currently cover and manage their customers.

To download the full report click here.  

Customer Engagement and the Mini-Cooper

Owners of the Mini-Cooper have long been known to be one of the most fanatical and loyal of all owners.  They are likely to custom design their cars online, actively participate in local motoring clubs, and are in general, a passionate and faithful community.  

A new project took me to the mid-west where I finally got a taste of the Mini-Cooper, courtesy of Budget rental cars.   Initially, I was excited by the opportunity to find out what the buzz was about, but after getting in the little red car with white racing stripes, I quickly found myself totally discombobulated.  It was like the car was designed by aliens, nothing was where it is should of been.

I couldn’t operate the windows the first half of the day, drove around with my blinker on for the other half.  The radio settings were in the speedometer, and the tachometer was where the speedometer should have been.  Even the gas gauge wasn’t a gauge at all, but rather a circle of lights.

The “Coop” had all the same instruments any other car has, but they were in different locations and/or in different forms.  I’m still not convinced if the lay out of the dashboard is better, but one thing is true -- I was fully engaged, I had to be.  Even though I’ve been driving for almost 30 years I was a stranger in a strange land.  Suddenly, driving was fun again.

It got me thinking about how we engage customers.  There is a bunch of noise being made about customer engagement; the question for most of us is how to make it happen.  Intuitively it makes sense, but from an execution standpoint, it’s still a bit of a mystery. 

We have seen traditional response rates drop, and have begun experimenting with Social Media with little, to no, payoff.  Although the true upside of customer engagement may still yet to be defined, a Gallup research report points to it as a leading indicator for customer attrition.  In some ways we’re searching for the Holy Grail, but maybe new isn’t the answer, maybe we have what we need.

As I sat at a stoplight and stared at the dashboard trying to make sense out of it, it hit me: It was if the Mini-Cooper engineers intentional redesigned and/or rethought everything, most likely with the intent of keeping the Coop customer base happy and engaged with it’s quirkiness.

It showed me that you could create an engaging experience by leveraging what you already have.  Granted, had I been on a tight schedule, I may not of enjoyed having to “get up to speed."  I was in a city that I had never visited and driving to see a client I’ve never met.  I had my hands full directing the GPS, a stick shift, and a conference call.

I am not suggesting rearranging mission critical assets for key customers but what I am offering is this…maybe we need to rethink how customers engage and interact with our sales people, customer service reps, and the web.  Like the engineers at Mini-Cooper, we need apply our creative thinking skills to reordering our assets to provide customers with what they want, but delivered in new and intriguing ways.

At the end of the day the Mini-Cooper still provides basic transportation - I got from point A to point B, but getting there was uncomfortable, scary, exciting and fun.   Much of what we provide customers is basic "transportation," and "mixing it up" can be scary, but it also may be the key to getting customers’ attention again.