Tuesday, 27 October 2009

An Indecent Proposal - or how to get your way with Finance

Having put the relationship with Sales right, it is time to turn attention to Marketing’s other tormentor-in-chief, Finance.

We all know that accountants are frustrated marketers. They are dying to have a close working relationship with us: not just on an intellectual level, but up close and personal with real physical contact. Finance might bang on about relevant metrics to demonstrate added value, but the real way to an FD’s heart is to consult him or her on advertising strategy or the need for a new logo. If all else fails, get naked.

Maybe not, but it’s an entertaining thought.

Tempting as it may be, there is no point in treating Finance as an alien race. The harsh truth is that financial management steers many boards away from pursuing a long term marketing strategy towards short term revenue generation and cost control. Marketers need a strategy of their own if they are going to get their way.

In reality, accountants probably don’t want to get involved with the advertising message or logo, but there is good sense in involving Finance early in the planning process and getting them engaged with the strategy behind specific initiatives. Robust, jointly owned forecasts of future value and a willingness to review initiatives together will lead to Finance becoming an ally and business partner.

And it is a partnership we need, for in the current climate, we need shared responsibility when faced with reduced profitability. Marketers must demonstrate good commercial and financial acumen, generating ideas that create financial value, not just creative satisfaction. For their part, the accountants need to recognise that short term sales are too blunt a measure of marketing ROI. Business growth is a long term, multi-dimensional strategy.

As I said in a recent interview, requests for budgets need to be presented in ways that are aligned to the strategic goals of the business - an integrated strategy that builds the brand and moves prospects through a planned engagement process.

If that fails, getting naked might still be an option, but let’s face it, high quality reporting, sharing of data and impartial analysis are likely to be a bigger turn-on for our bean counting buddies.

Sunday, 18 October 2009

Connecting Sales and Marketing in B2B

The following post is a transcript of my responses to a set of questions put to me recently by Adam Needles, Field Marketing Director with US marketing automation specialists, Silverpop.

1.) What strategy have you seen work the best for connecting sales and marketing teams?

Sales and Marketing teams need to communicate often and earn mutual respect. By engaging with Sales and drawing on its knowledge of what customers want and respond to, Marketing can develop buyer-centric campaigns that Sales will want to support. Similarly, Sales can learn to accept the strategic direction set by marketing in terms of key messages and target markets.

In sales-led organisations, I have always focused on developing a rigid process that gives Sales a set period of notice before a campaign goes out. The objectives of the campaign, the key messages and the creative are all communicated, the prospects that are being contacted are circulated and the database carved up and allocated for follow-up. Once the campaign has landed, the Sales function identifies a day to dedicate itself to making 1:1 contact with the prospects that have been targeted. Results are collated afterwards and success is celebrated together.

Sales and Marketing need to combine to form a powerful business development unit that works as one to nurture a prospect from target name through to customer.

2.) What metrics have you seen work best for tracking and measuring the ROI of lead-management programs?

Ultimately, the only true measure of success is sales conversions, but ROI, as measured by sales income, is too blunt a measure of success in the short term. We have to recognise that in B2B, it is rare to convert a business from prospect to customer in one hit: there are several steps along the way and it is therefore necessary to set goals and measures for the degrees of engagement. In the first instance, these goals can be opening rates on email campaigns; click-throughs on links and downloads of product information. Further along the line it is the results of targeted follow-up of the names that have shown the first signs of interest - perhaps agreement to a meeting or a product demonstration.

Lead-scoring and lead nurturing mechanisms are in their early days, but it is exciting to see businesses like Silverpop and The Accuitas Group working towards systems that work.

3.) If you were going to do only one thing, what part of a B2B lead-management program would you implement (demand generation, lead scoring, lead nurturing or ROI measurement)?

Lead nurturing. While we are nowhere without the initial demand, in the scheme of things, generating a contact is relatively easy. The challenge is turning the contact into a client. We have to have systems and methodologies that enable Sales and Marketing to constantly and appropriately increase the level of engagement to the point where the sale is made.

4.) Which business practices are working best in B2B lead generation today, and which would you like to disappear?

The practices and hence the campaigns that work best are the ones that have buyer relevance at their core. This means identify the issues that are important to the prospect and owning the conversation that surrounds them. Whether it is with e-mail campaigns, press releases, blog posts or advertising, the organisations that understand and incorporate buyer relevance into their communications will be the ones that win.

My perpetual hope is that one day we will see an end to the sniping between Sales and Marketing. Too many organisations operate in silos and with a blame culture: Marketing blaming Sales for not backing its campaigns and Sales seeing Marketing as disconnected from the real world, generating no leads or leads it can’t do anything with. Come on guys, we’re all in this together – let’s have a coffee!

5.) What's your advice to marketers working with executives who view marketing as a discretionary budget item during a recession?

Marketers need to present requests for budgets in ways that are aligned to the strategic goals of the business. Unfortunately there are still too many people in Marketing with insufficient commercial acumen. A proposal for an advertising campaign or trade show in isolation can look like a flight of fancy and will be deservedly knocked back. However, presented as part of an integrated strategy that shows the activity as an integral part of moving prospects through a planned engagement process, will make sense to even the most parsimonious CEO or CFO.

These are tough times for many organisations and Marketing can’t spend money that doesn’t exist. More intelligent targeting, for example, by identifying niches or top-slicing prospect pools; better use of lower cost methodologies, such as e-mail campaigns and social media; and, most importantly of all, avoiding the waste that is inherent in generating leads that aren’t effectively nurtured and converted, are all ways of adapting a plan to a reduced budget and maximising the ROI.

How would you answer any of these questions? Please share your thoughts.

Saturday, 10 October 2009

Identify the issue and own the conversation - effective engagement in B2B marketing

The nature of B2B marketing is changing - the evidence is in our pipelines. The decision making process, which has always been slow and complicated, is now even longer and more unwieldy.

The economic climate means that the old adage of 'you'll never get fired for buying IBM' no longer holds true. Now we can say ‘you'll never get fired for deferring a purchasing decision' or 'you'll never get fired for implementing the lowest cost solution’. The shadow of the unseen decision maker- more often than not the finance department - looms large.

Marketers need to rise above the frustration and develop new strategies to generate profitable and sustainable demand.

Adam Needles of Silverpop pointed me to Jolles model of the decision making process. A more sophisticated interpretation of AIDA, it helps us consider our proposed activities in the context of where a prospect is in the buying cycle.

An enlightening finding is that purchasers spend 79% of their time in the acknowledgement phase - deciding whether or not they have a need that requires satisfying at all.

Armed with this information, we can make great sense of the importance of structured and relevant engagement marketing activity. This might include inbound marketing, such as search and social media, or more traditional outbound tactics including sponsorship and advertising. These are all areas where it is hard to show a short term ROI, but, as shown by Jolles model, they need to be in every marketing plan in one form or another.

The key to ensuring the investment is ultimately returned is buyer relevance. Businesses have to commence and maintain a dialogue with prospects on issues that are relevant to the buyer. The mantra must be: identify the issue and own the conversation.

Richard Bush, MD of Base One Group said recently:
"We need to change our traditional approach of: 'Find; Convert; Develop; Keep' to 'Engage; Convert; Develop; Keep'".

How to engage is the tricky bit. Insight is at the heart of building more buyer-centric campaigns and a variety of techniques can be used. There is, of course, the option of formal research, but more economically, a Twitter search is a great way of feeling the pulse of people's reaction and opinion on any topic. A simple Google Alert can do the same job, as can reading the trade press. And let's not forget the basic principle of keeping engaged with sales – talking to the people that are talking to customers every day.

When the central issue is identified, it can be used as the platform for advertising messages, email campaigns, blog posts and press releases that inform and engage. The goal is 1:1 marketing on a mass scale.

There is no denying that it is difficult. The central issue for one audience will be different to the central issue for another. Segmentation, niching and top-slicing are probably the best chances that we have got and, even to get to this point, research, data analysis and an incredibly robust CRM system are essential to delivering the right message to the right prospect at the right point in the buying cycle.

Can it ever be automated? Companies like Silverpop and The Annuitas Group are making immense strides with lead scoring and lead nurturing, but even with great systems, marketing messages that don’t engage are lost in the wind.

The business that can identify and own the topic of the day is the business that will be top of mind when acknowledgement moves to search.

Saturday, 3 October 2009

Cut to grow - a plea to politicians on behalf of small businesses

With the growth of our business being at the top of my agenda, I find myself paying closer attention than ever to the political situation.

Like England's one-day batsmen, Brown and Darling look to be on their way back to the pavilion. Never at their best in public, last week's party conference did little to boost their ratings and confidence.

This is a shame, because in the single most important issue of recent times - the global financial crisis - Brown has proved himself to be the safest pair of hands. The support for the banks and the expansion in public spending has been instrumental in containing the depths of the recession - a model that has been copied across the world. When the dust has settled, this will go down in history as Brown's legacy. As the BBC's Nick Robinson observed: 'Now it seems the electorate will treat him as they treated Churchill in 1945: "Thanks for the help, but now it's time for you to go"'.

These are finally balanced times. Where we see signs of recovery - rising house prices and increasing confidence in the UK; the end of technical recession in France, Germany and Japan - we see signs of a double dip recession elsewhere. Higher than expected unemployment figures from the US pushed the FTSE100 back below the psychological 5,000 level on Friday.

Finally balanced indeed.

Forgive the bias, but one of the principal policies for economic recovery must be a strategy for the growth of small businesses. Small businesses like ours with an ability and ambition to grow have the potential to create jobs and wealth, which in turn will create wages, spending and tax income.

As an advocate of the spending that is happening now, I accept that it has to be met with increases in tax revenues in future. My anxiety is that Brown's strategy is geared to raising revenue with tax increases rather than economic growth. We already have the prospect of £10 billion worth of tax rises next year - amongst them increases that will hit small businesses very hard: fuel duty, VAT rising again, higher business rates and the pending increase in employers' National Insurance contributions. These make me, and I'm sure every other business owner, very nervous indeed. This is not a healthy situation.

Despite my admiration for Brown as a financial manager, there is a worrying lack of logic in many of these rises.

Employers' National Insurance is an explicit tax on jobs. We should be encouraging businesses to employ people, not taxing them more for doing so.

Higher business rates will hurt cash flow and lead to more empty shops and offices. Empty shops and offices depress the nation. Furthermore, as many commercial premises are owned by pension funds, the value of people's pensions and their feelings of security will be hurt, leading to cut backs in spending.

The pointless cut in VAT at the last pre-budget report remains lost on me. The changes required to implement the change are significant and impose a costly and unnecessary distraction on small business owners.

But it is a tax that is not currently flagged for increase that causes me the greatest anxiety. Corporation Tax is the biggest inhibitor to business growth. Like many businesses, we have an impending tax bill based on last year's profits and have had to create a reserve to meet it - a reserve that could be used to fuel the expansion of the business. A cut in Corporation Tax would lead to significant increases in employment and investment in the short term and propel growth and a higher tax take in the long term.

Through the conference season, I haven't heard any party come out with solid policies for small businesses. The party that eventually does will get my vote this time.

What do you think? Let me have your views.