Top 5 Ways PR Can Support Sales

This post was also featured on PR News. 
For the most part, sales and marketing view PR/Corporate Communications’ role to be high in the funnel. Some would even say that its focus is on “above the funnel” activities.  But if used strategically, PR activities can be very effective in playing a critical role in supporting sales.  Below are five ways PR can help the sales organization:      

1. Creating an impression – Typically thought of as a primary role of PR, but the ability to create a perception that the company plays in a “space” gets the company in the consideration set and the sales force in the door.  A few years ago, we did some research on the key consideration drivers in Tech.  The research showed that relationship with the rep was not a driver…meaning, if the customer perception is that you don’t have product/solution for their need, the rep is not getting a call. 
2. Damage control – As “they” say, “things happen”, and how the company handles it may be the difference between losing and retaining a customer.  PR can help get out in front of an issue, explain the company’s position, and help the sales force navigate what can be a difficult conversation.  Ford’s handling of the corporate bailout was masterful.  As Alan Mullaly’s peers from GM and Chrysler were taking their corporate jets to Washington to ask for a hand out, he and his team were driving from Detroit.  They said “no” to the handout and walked out with consumer confidence, which later turned into market share gains.  
3. Checking a competitor – A huge concern for sales is having a competitor leapfrog ahead with a new solution or product.  PR can create the impression that the company has a similar product or solution when in reality it may not.  Large established companies, like GE and Cisco, turn up the noise to drown out fast moving smaller competitors. 
4. Building momentum– There’s nothing better for a salesperson than a product that “sells itself.”  Creating excitement in the market for a product or solution helps generate inbound leads, which have the highest close rates.  Do you really think that the new IPhone 5 went missing…again?  It’s all about creating a buzz.
5. Enabling and managing Social Media – In certain industries, such as hi-tech, Social Media is owned by PR/Corporate Communication. This important channel for engaging with customers can provide sales with new insights into customer behaviors, needs, and motivations, but that insight has to be carefully managed as to how it is used. 

And for a bonus example – Virtual Coverage - years ago, I conducted research on how well a medical equipment company was covering small customers.  The results showed that their sales force visited customers about once every three months while a competitive sales force came by about twice as much. 
The company couldn't afford to increase the field sales force but could ramp up corporate communications.  A year later when we did the same research, this time customers said that the reps were showing up twice as often.  They weren't, but the increased communication resulted in the perception that they were seeing the reps more often.  

The Social Media Squeeze in Hi-Tech

After much internal debate and in-fighting among departments you finally decide to put Social Media in  PR.  Well, don’t get too comfortable.  The risk, according to recent research on the technology industry, is that PR may get pressured to turn a vehicle for engaging in genuine conversations into a broadcast channel for generating leads.  

According to research from ExactTarget, close to 40% of Facebook users said that they “like” a brand to share their support of that brand with friends.

Why users “like” brands:

•  40% to receive discounts and promotions


• 39% to show my support for the company to others


•  36% to get a “freebie”


•  34% to stay informed about the activities of the company


•  33% to get updates on future products 

63% of FB users reported that they would “unlike” a brand if postings become excessive, and in particular, if they are too promotional or repetitive.  52% of Twitters users would stop following a brand if their tweets became repetitive or boring.  This is where the danger for hi-tech marketers exists.  

In a report titled Tech Marketers Pursue Antiquated Marketing Strategies, Forrester found that 42% of hi-tech companies have handed over Social Media to PR and Corporate Marketing. 

The research also showed that 76% hi-tech marketers say that lead generation was one of the two most important priorities for marketing compared to 53% of non-tech companies.   Non-tech companies also list customer relationship management to be a priority at 52% versus only 22% of tech companies. 

Because of the pressure for leads, tech has a tendency to want to turn any interaction into a sales conversation, by doing so it risk alienating what could be its best sales voice, the brand advocate.  It doesn't mean that PR organizations in tech can’t successfully execute social media programs, in fact, many of the best practices come from the industry.  But if not carefully monitored and controlled, PR and MarCom will be under pressure to use social media as a one way outbound spam machine aimed at anyone who hints at liking a technology brand.  

That squeeze will come from the product organization, which has P&L targets that will be made or missed according to the marketing team’s ability to produce leads. Forrester found that Product Development and Engineering (35%) has the most influence of any business function in the hi-tech industry. 

To put that into perspective, only 4% answered Marketing.  So you can expect Product to bring the heat.

Where should social media sit? 

The Forrester report went on to say that other industry respondents believe social media plays an important part in other marketing activities, as a result, it could be owned by a corporate marketing/PR (24%), web/interactive group (22%) or a brand or product marketing group (16%).

If you are in hi-tech and PR manages social media remember this - the top measurable benefit of social media, according to a recent McKinsey survey, is that it increases the speed to access knowledge; specifically, to understand the external environment, find new ideas, and experts which has resulted in improved marketing effectiveness.   Note that these activities are collecting information, not distributing. 

Are Existing Customers 8 Times More Valuable than New Customers?

It’s conventional wisdom  that it is “six to seven times more expensive to gain a new customer than to retain an existing customers.”  Given today’s economic uncertainty, could the inverse also be true?  Could existing customers be six, seven or even eight times more valuable in terms of revenue and growth than new ones?

Frederick Reinchheld of Bain & Company coined the phase based his research on customer retention and acquisition in a study published in the Havard Business Review in 2001.  He would later go on to develop the Net Promoter score, measuring the impact and importance of “loyal enthusiasts” on a company’s performance. 

So for many companies, existing customers are a bellwether investment –  such as gold – in times of instability and uncertainty.  But what the research does not address is the potential existing customers represent.  Many are a goldmine of opportunity for incremental revenue growth that is often missed. 

For example, a financial services company found that because it focused on promoting and selling new products, the majority of new customers acquired in the last 2 years had high penetration of new products (75%) and low penetration of older products (40%). 

The inverse was also true: Customers for more than 10 years had high penetration rates of products older than 10 years at 65%, while new customers had penetration of 37% for those same products.

Marketing promotions, and sales compensation incented behaviors that led to new customers only being exposed to new products.  With existing customers, the company focused on retention and spent little time on trying to sell new products.  As a result, the company discovered a host of cross-sell and up-sell opportunities as a result of this segmentation … opportunities that may exist in many other organizations. I would recommend segmenting your customers by date acquired, and the age of the product they own or use to discover your own goldmine.

This incremental revenue potential, combined with the value a customer represents as a brand advocate (Reinchheld’s Net Promoter Score) powered by social media raises the stakes even further.  It is a solid argument for suggesting that existing customers are in fact, even more valuable than Bain originally suggested ten years ago.

Don’t get me wrong; new products, markets and customers are critical for growth.  I’m not advocating that a company abandon these pursuits, however I am suggesting that given the current situation there might be an overlooked, low-cost opportunity for growth right in the backyard.

You just need to mine it.

Need another reason? At this writing, an ounce of gold is trading at about $1,700..  Two years ago, it traded at $1014, appreciating 68% over this period.  

Treat customers like gold and you might see the same kind of return. 

A Communication Company that Lost the Ability to Communicate

When a life-changing event occurs - like the USA’s Olympic hockey team’s Miracle on Ice- many people remember where they were or what they were doing. I was on the couch when I lost my Fios. It was a Sunday morning (10:02 am to be exact) July 3^rd and I was flipping back and forth between watching the Tour de France team time trial (my favorite stage) and the final of Wimbledon between Nadel and Djokovic (also a favorite sporting event).  

While I was enjoying the tour, my neighbor was in his backyard sinking a shovel into my Fios fiber optic cable, cutting the line. His single move was a triple punch; he took out my TV, landline and the Internet (I also happened to be finalizing the details for our vacation the following week). 

Following the disruption, I immediately checked all the known causes and determined it was outside of the house and outside of my expertise.  Verizon said that because of the holiday, the soonest they could send out a Tech person would be Tuesday, July 5^th.  It’s now August 1^st and I’m still dealing with this issue.  I tried hard not to write this post, but the temporary cable that is still in my backyard is a constant reminder of how this “communications company” has lost the ability to communicate with it’s customers. 

Without boring you with the detail of this mess, what I learned is that the company originally built on providing phone service has forgotten how to use the phone.

• Service Tech reps no longer talk with customers - Instead reps send you a text message when they are on the way or when they missed you. And timing of those texts is also not in sync.  Our rep told us that he was at our house at 9:06 am. However, my wife got a text message at 10:20 am saying that our service was scheduled between 8-12 pm. 
• Customer service cannot talk to the Tech reps – The people scheduling your service cannot directly talk with the reps. We waited for the service tech to engage us in their version of an instant messaging. 
• Customers cannot talk to the dispatcher or the Tech rep – After the rep said he came back in the afternoon and no one was home (that is if you don’t count me staring out the window waiting for him), I was desperate to hunt him down, thinking that he was going to the wrong address. 
• One division cannot talk to another – After I called back to reschedule the third time, my call was accidently routed to Verizon Wireless.  The rep told me he could not route my call back to Verizon Fios because “we’re another company.”  
• Contractors cannot talk to the service department – The tech rep placed a temporary cable through my neighbor’s backyard to restore our service, telling us a contractor would come to sink the line.  The contractor did sink the line, however, he left the temporary line in my backyard (partially chewed up by my 9 month old puppy and the lawn mover). 

In my opinion, the reason for the communication loss is directly related to efficiency and scale.  Verizon has now grown so large that it no longer has to care.  Similar to Sprint in the golden days of wireless, it has momentum on the front end (acquisition) and is trying to make the backend (service) as efficient as possible to bring down the cost to service those customers.  

We were one of the first neighborhoods in the country to receive the Fios service.  Direct mail promoted the service and sales reps went door-to-door signing up customers if they didn’t already get you via telesales.  Cost was not an issue and customer service would do anything to make customers happy while it worked out the bugs in its game-changing product.  

But today, Verizon, like Sprint at its peak (which just recorded it’s 16^th consecutive quarter of losing more customers than it has acquired), appears to be driving as much cost out of operations as possible by placing efficiency ahead of effectiveness.  

I can attest to the fact that using text, IM and other non-personal communication vehicles may be efficient, but certainly not effective.  Customers feel the pain and companies have no way to sense it because they have removed the person.

This quest for scalable efficiency also relates to the way technology is configured.  For example, during this ordeal my DVR cable box went out.  I called the service department to report the cable box and to request (again) that they send someone out to remove the cable from my backyard.  The box arrived a few days later, however, the technician did not.

When I called Verizon to find out what happened, they said that they could only enter one trouble ticket per call.  This is another area where efficiency breaks down.  Complex problems with multiple steps do not easily follow a service process designed for speed.  Reps have to work with customers to solve problems and many times it involves multiple steps.  If reps are compensated for how many calls they take, talk time (as little as possible with customers), and one call resolution, reps will pass on anything they view as time consuming. 

The lesson I learned is that bigger is not necessarily better.  I have 3 wireless phones, Internet, TV and a landline with Verizon.  It’s inconvenient and would be somewhat painful for me to switch (and for some services I’m contractually obligated to pay fees if I cancel). All this gives Verizon leverage.  While I enjoy paying one bill, I don’t like being treated as a number.   

Just as Sprint learned the painful lesson of being too big to care, so will Verizon.  And I look forward to that day, but until then, Verizon get your damn cable out of my backyard. 

Why Sex Sells

This post is featured on Forbes.com
Years ago some colleagues of mine built what we thought at the time was the “holy grail” of business marketing.  A sophisticated analytical tool that could tell a marketer where to invest, why, and what the return would be in sales productivity.  It could also tell them where to cut dollars, why and what the impact would be on the business.

It was an incredible feat of analytical modeling and technology.  Built for one of the most respected and well known companies in the world, so the CMO could answer with absolute certainty the CEO’s question: “What am I getting for my marketing spend?” We thought that it was our ticket to the big time and the rocket to ride to explosive growth, but that was not the case.  

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