For those who have studied marketing, you’ll recall the 4 P’s:, Product, Price, Placement and Promotion. Today, however, three out of four of those P’s have often been usurped by other parts of the organization. Product is often managed by a research and development, or product development, group. Price is often set by the sales team, or in some cases by customers. Placement is within the purview of the distribution arm, which leaves marketers with Promotion.
Promotion is often interpreted by other departments as “making it pretty” or is at the service of the sales organization. To make matters worse, organizations are siloed so these different internal organs are not well coordinated or even on same page. With increasing pressure to demonstrate ROI metrics around Promotion, marketers are less empowered and less able to bring value to the organization.
At the same time, the context in which they are operating has become more complex. New technologies offer new communication channels, and has changed the dynamics of communication. Managing the marketing mix, and optimizing it, is increasingly complex. Many traditional marketers not only don’t get the new context, but are still trying to apply a broadcast framework when they need to adopt a conversational one. This reality has degraded marketing’s reputation within organizations. That said, we need marketing more than ever at this moment, and I believe it can bring significant value to companies.
First and foremost, marketing needs to be the voice of the customer within the company. In order to do this effectively, marketers must listen to customers and empathize with them. They must do this through dialogue and by building relationships. Relationships should start with a positive interactions which lead to a sense of consistency. This in turn leads to credibility, and hopefully a sense of authenticity. From there you can start building trust and loyalty. Finally, if you do everything right people will form an emotional connection with your brand that can last a lifetime. The rub is that it’s increasingly difficult to manage this process when organizations are siloed. This is the opportunity space for marketers. Here is a good representation of how relationships are built created by David Armano, whose Logic + Emotion blog is worth checking out …. the only thing I would add to this diagram is a measure of emotional connection that increases as you climb the stairs:
How can you do this when all you’ve got to work with is Promotion? You can’t. So how can marketers become empowered again and start building the relationships that drive business success? I think we have to start small and demonstrate the principles of what makes marketing powerful on a small scale. In the process, we need to repair relationships and open windows between siloes at the organizations we call home.
Optimization projects are often a good place to start, because they are seen as quality improvement rather than as new projects. A simple example might look at optimizing an online communications channel like a newsletter. If there is already something in place, work with the IT team to establish some baseline performance metrics. Talk with the sales team to understand what kinds of challenges they are facing and how the newsletter can support them. Identify some metrics that you could use to track the effect of potential changes. Talk with Human Resources to get access to the resources necessary to make changes, and to provide an incentive to participants. You might need to connect the Human Resources team with the IT team to create a system to track performance to compensation.
The next step is to start doing the work that only marketing can do. Go out and start talking to customers about what they want from the newsletter. You can conduct surveys, have in person interviews, talk with other industry experts, and more. You’ll obviously want to make sure that you can demonstrate that whatever tactical changes you are making tie back to your overall strategy as well. Take the intelligence and insights that you gather and represent them in your new design. If possible, include the stakeholders from other departments in the process to foster their investment in the results.
When the project gets implemented you’ll want to internally market your results back to the organization and to the customers. You’ve started building some relationships that you can take on to your next project, which will be bigger. In essence, internal marketing teams need to go up the same stairway they are trying to bring customers up.
UPDATE: Now you can listen to this post as a podcast:
Ok, so I know I’m on a Burger King binge here …. but I have to write one last post. In my over exuberance for their recent campaign I went out to grab a Whopper for lunch even though I am very much against fast food, and avoid it at all costs.
Burger King has made a HUGE innovation in Fry Technology by taking a page from Apple’s book. Let me introduce you to the FRYPOD!
S'cuze me, could I get those hot and crispy, but not fresh?
As an aside there was nothing in the store representing the online campaigns. There was a separate Apply Fry offering, which consisted of cut apple slices. A packet of caramel sauce, probably made entirely from artificial ingredients, should help wash away any nutritional benefit from the apple. Also, back online, they have a meat flavored perfume called FLAME. But I digress ….
It’s been one day since I wrote about The Whopper Freakout, when I learned about The Whopper Sacrifice. And, I have to hand it to the folks at the advertising agency Crispin Porter + Bogusky for serving up another brilliant campaign.
Here’s the gist of it:
You cancel 10 friendships on Facebook and you get a free Whopper.
Absolutely brilliant, a critique of what “friendship” means in the context of the social network, and provocative. I’m pretty sure everyone in this scenario was a winner. Regrettably Facebook failed it by shutting down the Whopper Sacrifice Application after 233,906 friendships were canceled. Michael Arrington deserves credit for highlighting the fact that shutting Burger King down when you’re trying to find ways to monotize your service is not wise.
I believe Burger King put it best when they wrote this on the shut-down microsite:
Facebook fails it
Because I’ve spent time at both product and service companies, I keep getting asked what the difference is between marketing products and services. For a year, I’ve been saying that they are more similar than you might think. So, I’ve finally collected some of my thoughts on the issue. Since I started in the product space, and because I’ve spent more time there, this is really directed at explaining how product marketing can inform the way services are marketed.
DIFFERENCES BETWEEN PRODUCT & SERVICE MARKETING
– Buyer can experience first hand by trying them out
– Collateral focuses on claims, benefits, features, and price
– Product samples
– Buyers rely on second hand experience (testamonials, case studies, etc)
– Collateral focuses on unique value propositions (quality, speed, flexibility, etc)
– Case studies, testimonials, brown bags
SIMILARITIES BETWEEN PRODUCT & SERVICE MARKETING
– Tell meaningful stories about your product or service.
– Marketing leaders act as an internal advocate for the customer.
– Focus on building an emotional connection with your brand.
ON SELLING SERVICES … LIKE A PRODUCT MARKETER
Service companies must make their intangible offerings feel as tangible as possible. This is one area in which product marketers can inform the development of a services marketing strategy. One way to do this is to focus on developing tangible artifacts that you can embed in your sales process. Include everything from samples of recent work, to case studies, articles, testimonials, and white papers. Use artifacts to foster conversation and build relationships as the primary driver of any service sale. Remember, clients are not just buying work hours or deliverables, they are buying a relationship. That said, the best product marketers go beyond the products they manufacture to build long-term relationships and emotional connections with their brands (think of Brandon Schaur’s Long Wow) …. which means many of the most engaging products enable, you guessed it, services!
To convince prospective customers that a service is different and better on some meaningful dimension, marketing should be focused on the communication of a particular philosophy of service delivery (and benefits of the service to the buyer). This is what gets embedded in communications guidelines, standard collateral, selling points, sales decks, etc.
One significant difference between product and service marketing (at least high-end service companies) is that product-based marketing is typically more price-centric, while most high-end service providers do not compete on price. This is counter-productive because there will always be a cheaper option. Unless volume sales are the driver of your business strategy, price-cutting is probably not an effective approach to attract buyers.
While competing on price is not an appropriate driver for most service companies, it does not mean that the presentation of your pricingÂ cannot have a significant impact on sales. In fact, offering pricing options can garner greater attention during a clientâ€™s bid review process, fosters additional conversation and opportunity to build rapport, and can lead to service up-selling opportunities. For more information on how pricing can have behavioral impacts during the sales process refer to Dan Ariely’s book Predictably Irrational (this link will take you to a series of videos in which Ariely lays out many of the ideas from his book, along with links to the original research papers).Â Some of the research Ariely presents explores the impact that sales collateral, visual presentation, and environment can have on decision-making. This speaks to how making services more tangible can drive decision-making behaviors your way.
If you’re a native service marketer, I’d love to hear your thoughts on this …. there is certainly no question that many product marketers could learn something about building relationships from y’all!
This is a follow up to my earlier post on customer relationship management (CRM) tools. Thanks to all who responded and provided feedback. I’ve followed up on many leads, and am writing to provide a high-level update on what I’ve learned.
The landscape for CRMs is quite diverse in terms of business model, price, and development approach. On one end of the spectrum there are open source tools, which are supported by development communities, such as SugarCRM and OpenObject. These can be inexpensive from a cash outlay perspective but you’ll need a developer to install and manage them on an ongoing basis. They can be hosted by a service provider or on your own, and there are even service options available through partners. Then there are proprietary tools like SageCRM and Goldmine, which position themselves as turnkey solutions that can be hosted or not. They are priced at mid-market and do development internally. SalesForce offers a hybrid approach where they offer a basic turnkey solution that is highly extensible through third party partners, available through their AppExchange. While it is not open source, APIs allow developers to build on the platform. SalesForce is available only through the web and cannot be hosted, and can cost a bit more than the proprietary options depending on the configuration you choose. Finally, at the other end of the spectrum, there is NetSuite. This service goes well beyond CRM as an enterprise solution for running your entire business. From payroll to inventory management, marketing and sales tools, NetSuite is your one stop shop. As a former NetSuite client, I’ve gotta say it’s pretty impressive but it’s also expensive and set up for larger businesses.
Other CRM tools that were sent my way after my last blog included: Zoho, Prophet, Infusion CRM, CiviCRM, Oracle (Sieble), Leads360. Sugar and SalesForce seem to rise to the top if you’re in a small or medium sized business, design consultancy, or consulting practice. To be frank, it’s hard to imagine how the proprietary tools can keep up with the design communities and partners that support these two options.
- The cost of switching CRMs is very high, so if you have something that works, and that is extensible for your needs then you should seriously consider sticking with it. This is why I’ve invested the most research time in SalesForce.
- Make them give you a prototype. This is REALLY important, CRMs are very complex and have to get in there and use the product to be able to evaluate it. I had to twist arms and invest a bunch of time to get a prototype running in SalesForce, but it was worth it. Without doing this you can’t know how well the AppExchange integrations really work, or what the user experience feels like.
- Pick something that’s going to be around for a while, and that has solid partners. Once you’re into a CRM is hard to get out without significant data integration consequences. The CRM provider is a partner, so select carefully. Make sure to look carefully at their roadmap for product upgrades, and work with them building a prototype to get a sense of their service team.
- On pricing, there seem to be three levers they you can negotiate with including, payment terms (monthly, quarterly, annually, or contract term – the latter offering the best price), length of contract, and number of users (there are price breaks to consider).
- Also, if you are a non-profit pay special attention because SalesForce really wants your business (one might say they are artificially deflating the market for non-profits by doing this)!Â They are giving away a 10 license subscription FREE, and major discounts additional licenses. And these are enterprise level accounts with all the bells and whistles. More info here.
The Real Value
- Here is an overview of some of the benefits CRMs can offer. Many of these allow you to work more efficiently, and other’s offer insight into your business.
- Keep track of all communications with your client in one place. This makes things easier when you want to check in later to see if there are new opportunities to work together. This can also help prevent people on your team from stepping on each other’s toes.
- Organization charts make it easy to understand who reports to whom on the client side. Who is your financial buyer? Your sponsor buyer? Your user buyer? And, where are they within the organizational landscape? This can really help when coordinating your internal team, or when partners roll on and off projects.
- If you send out a newsletter, or other online communication, you can see if a potential client has received, and read it, from within that contact’s record. This can help get conversations started, and keep them going.
- Link case studies, deliverables, testimonials, media contacts, contacts, clients and projects together in one place. This makes it really easy to find and share information that a prospective client might be interested in.
- Follow up reminders. Ding, it’s time to get back in touch with a past client. In a busy practice it can be really hard to remember to do this kind of work but it can have a profound effect on smoothing out your pipeline.
- Reporting dashboards show you how your sales process is working in real time. Where are incoming calls trending? How is return business trending? What about outbound sales efforts? Besides saving time (building and updating excel spreadsheets) this makes reporting more accessible, which in turn makes it easier to spot potential opportunities or issues.
- Finally, for those interested in SalesForce, the new Google Docs integration seems to have a lot of potential. It allows folks to work on the documents at the same time, chat inside SalesForce, capture e-mail chains, and more. This is definitely something to keep an eye one, and you can learn more here.
That’s just an overview, and which tool you use will effect which benefits apply most to your business. Ultimately, these tools are about making the client experience better by being able to get them the information they need faster, following up with them in a coordinated way, and staying on top of the details. Of course, it can also make your experience better by saving you time, and providing insights into your business. For example, if you tracked most of your business as coming in through your blog, you might adjust your marketing mix with this in mind.
A Final Word On User Experience.
Many of the tools that I’ve explored could use some help on the user experience front. Considering that user adoption is probably the single largest barrier to the success of these tools, this is a major issue. It seems the software as service industry has been growing so rapidly, and has been so focused on feature sets, that they’ve overlooked the power of user experience to support adoption. CRMs have something of a bad name from this perspective because there is a legacy of clunky and hard to navigate interfaces. At the same time, the real value of CRMs can only be tapped into if people are engaging with the tool and using it regularly. Of the tools I’ve used SugarCRM and SalesForce seem to be the best, but there is defiantly lots of room for improvement.