B2B Sales and Marketing Knowledge Sharing

What a Girl Scout Can Teach Us About Selling

Original post date January 12, 2009

Last week I had the pleasure…to my surprise…of hearing my 6th grader work the phone selling Girl Scout cookies. She’s been a Girl Scout for a number of years and has achieved “Cookie Diva” (Cookie VIP this year) status numerous times by selling more than 150 boxes of cookies. Although I had helped her over the years by selling some cookies at work, I never actually got to hear her sales pitch, until last night.Sure, it’s hard to resist a Girl Scout selling cookies, but as a sales and marketing consultant for the last 12 years, I was struck by how well a simple, honest approach to selling worked. It was an interesting and enlightening 30 minutes.

Here are some of things I heard:

Niceties/Pleasantries – started every conversation with “happy new year”, and talked about their holiday, children, etc. She invested the time in catching up with them even though she had limited time to make calls between homework and bedtime. She didn’t jump to “getting the order.” It made me think about how often I rush through this important step because of time constraints, pressure on revenues, and/or proposals. If customers think that the only time you call them is when you want something…this certainly confirms it.
Customer Knowledge – no sophisticated databases, profiling or scripts. She did her homework by knowing what they ordered last year, what girls were no longer Girl Scouts, etc. which made it easy for customers to place orders because she knew them well.
Attitude – sometimes people consider sales as a “dirty job” and/or that we may be they are inconveniencing/imposing on someone by pitching them…like a stalker (maybe that’s just me). Could this stem from the fact that perhaps we don’t believe in our product or the value it can deliver to our customers. Listening to my daughter, I heard her talk about how good some of the cookies are and know how much they and/or their children love them, how she likes to put the “Thin Mints” in the freezer because she likes to eat them cold or dunk the “Do-Si-Dos” in a glass of milk before bed. Having seen boxes of GS cookies disappear from our shelves, I can attest to how much she loves her product.She’s not imposing on others, even though she caught some folks at dinner, she’s turning others on to a great product that she loves. What a difference that makes…
Product Knowledge – not only did she know all the cookies, including the new and classics, but also how many where in a box and how they were packaged. The best part was describing how to consume them…see above. I can’t tell you how many marketers I’ve worked over the years that don’t know the products their companies sell. I’m convinced that this lack of product knowledge is the leading reason why sales organizations dismiss or don’t respect marketing/marketers. Want to improve sales and marketing integration, train your marketers on products and see what happens.
Reference/Customer Testimonies – when her personal testimonials weren’t getting the job done she started to talk about others in the family and/or someone they knew. It made me think, do customers really care to hear reps experience with their own products? Maybe not, but do they listen to how convincingly or passionately they’ll testify…you bet! Customer testimonies are always the best –the more relevant the situation the better, but they also judge reps consciously or unconsciously on how well reps make their case (see the bullet above).
Handling Objections & the True Decision Maker – she went after a new customer who told her that they usually buy from a girl in the neighborhood. She then asked for the lady of the house recognizing the dad/husband was not the real decision maker (home schooled on this trick). She got an order but not the full order…the girl in the neighborhood will still get hers…but it will be a couple of boxes short.How often do our reps stop at “no” or get stuck dealing with the first contact vs the real decision maker? We all know that we’ll have to work harder to get the order than in the past, maybe we don’t go for the home runs as often, and settle for few singles instead.
Incentives – simple and straight forward, no complicated % or calculations…sell this much…get this. A compensations consultant’s dream, straight forward and easy to implement. On the order sheet, it lists the prize the girls receive based on their sales. As she reached certain level (25 boxes, 50 boxes, etc) she would tell us what prize she was won and what she was going for next. But the big one, the President Club, the one that screams “I’m the Diva” was the Cookie VIP patch.Good old fashion recognition for a job well done that lasts all year. Oh, how we’ve complicated incentives plans over the years. The search for the ultimate motivator has many times led us down the wrong path. Is it time to simplify, not sure, but I would bet it’s worth investigating.
Connecting it to Social Causes – this is the primary fundraising vehicle for the Girl Scouts and people know it. Can you write off the $3.50 per box as a donation? No, but you do feel good about placing you order, sure. We’re all so socially aware nowadays, are there opportunities to connect your products to the “greater good?” You may have seen the latest ads from IBM and how they’re products and services can help companies “go green.” It’s time to add this to the value proposition…or at least consider it.

Yes, I know that many of us have much more complicated sales processes and products/services, but how much of that is self inflicted? At the end of the day, don’t all customers want the same thing…a good product or service that satisfies a need/want representing good value acquired through a pleasant experience?

During this difficult economic environment, listening to my daughter was a good reminder of how well having a good product, knowing your customers and believing in the value that you’re providing can work. Is it time to simplify our products, value proposition, how we compensate our reps? It may depend on the company, the situation, the market…but I would bet it wouldn’t hurt.

At the end of the night, ten phone calls, 10 closes and over 70 boxes of cookies sold in the matter of 30 minutes (pleasantries, product description, and an order every 3 minutes). Not bad for a junior telemarketer with no training. The GS’s will sell over 200 million boxes of cookies over the next month…more than any cookie manufacturer will sell in the entire year.

Does simple work…for some, extremely well. The question is, can it work for you?

The Myth of the “Foot in the Door”

Given our average deal size we used to think we needed to have a scaled down offer to get a foot in the door. Once in, we could then grow the account. We were wrong.

Considering the current economic situation, I know that many companies may be tempted to come up with a “door opener.” A subscale and/or entry level product/service intended to get a foot in the door with a new client and/or a new business division.

You’re also probably thinking about going down market into smaller accounts. Although this shift may help satisfy short term revenue needs it will do little to nothing in helping grow your business. Most likely those accounts will not expand and/or even be retained next year.

Here’s how I know. Looking back at the new accounts acquired over the last four years we found some interesting trends and confirmed some things that we knew intuitively (click on the image). When we measured the value of customers in their first year against the average time spent engaged with the client a few key insights emerged.

First, three “clusters” of accounts emerged;

Customer that grew to beyond $800K in their first year
Customer who had first year revenues between $350-$600K
Customers who represented under $250K in total billings from the year.

Let’s start with the bottom and work our way up. Customers in cluster 3 had an average value of $150K. Accounts on the lowest end of the spectrum in the “One and Done” zone” (under $10K for example) were “workshop”…our “foot in the door” offer. Guess what, of the 8 that fit that description zero, zippy, nada, grew beyond the initial workshop. The other bad news…only 2 accounts led to follow on work and no company in that grouping was retained the following year.

I was speaking with Larry Emond, CMO of the Gallup Organization the other day and he mentioned that they saw a similar trend; “We found that only 4% of customers who were acquired under a certain price point grew to be substantial customers.”On the other end of the spectrum are the occasional customers who are big right out of the gate. The “Rare Birds” zone in cluster 1 includes those few customers who start big and for the most part remain large customers YOY. The key to success with this cluster is that they had/have a tendency to have a need for multiple service lines and/or desire a complex solution. This group was looking for a strategic partner versus a vendor for an immediate need. Year over year retention was also good at over 50% and if they used multiple services lines it was almost a sure thing they be retained….and grow.

As Larry also mentioned; “Our big customers today came in as big customers…”. We’ve had the same experience and have grown our top 5 largest accounts by an average of 90% over the last two years.

Customers in cluster 2, the “Sweet Spot” represented the best of both worlds. Although their value was not as high as the “Rare Birds” they were more plentiful. They also had higher price points, high percent of follow on work and YOY retention than the “One & Dones.” Retention rates although not as high as the “Rare Birds” was good (a little over 33%). Bottom line – they represent the model that we need to build our coverage and services bundle against. We have also realigned our resources to help account development/retention activities against this group.

Why do low price point and short engagement acquisitions perform so poorly?

We discovered five main reasons for this:

Length of the engagement – too short to learn business/issues/meet folks/create a relationship, etc.
They get the “B” team – the “A” team is on existing accounts, as a professional services firm that measure FTE productivity this will always be the case.
Short term need vs long term problem – we were successful in building a relationship with target buyers within targeted accounts. So much so that they decided to “give us a try.” The problem with that is that it was usually a piece of work that wasn’t strategic.
Size matters – our win rate and retention rate dropped dramatically on companies that had under $1B in revenues. The only exceptions were situations we were able to sell a solution as the first engagement.
Culture/Attitude – some companies just don’t have a culture of working with outsiders. This very difficult to know until you’re in the door.

So as you are thinking about 2009 focus on aligning resources and efforts on;

Retaining and expanding your biggest customers with new lines of business.
Find your “sweetspot” based on this type of analysis…what is the right mix of services and price.
Targeting big companies with big needs…there are many out there now just make sure you have the right offer.

Because at the end of the first engagement…a foot in the door just isn’t enough.

Making the Transformation to Vertical Alignment

On my flight home the other night I sat beside a woman who headed a line of business at an Environmental Waste compnay. She mentioned how they recently realigned the organization to a Verticals, LOB’s and Services model and that they are struggling with the transition…it sounded like I was talking to myself.We made the same decision this year. After advising and helping companies transition their organization to this structure for years, it is only now that we are beginning to feel their pain. And boy, are we feeling it.Some of the common challenges:

Everybody Will Be in EVERYBODY’S business – early on in the transition you’ll experience the “blob.” Everyone involved in the reorg will pretty much be stuck in the same place. Vertical guys will want to define products, LOB’s will want to do their own sales and marketing, etc. It will take time for the “blob” to spread out. Give it time.
Lane Violations – as the “blob” starts to spread out people will begin to find their lane. The challenge will be those who refuse to stay in their lanes. Lane owners will need to be protective of their space and tell others to “get out”…easier said than done.
Learning Curve – just because you’re the new head of a Vertical or LOB doesn’t mean you know how to do the job. You’ll find that it will take time to truly understand what you are supposed to do…try 6 to 12 months.
Marketing, Selling, Scoping Work, Pricing, etc. – all these functions will be debated over and over…where they best fit, who should do what, at what point in the process, etc.
Compensation – the elephant in the room. Yes, it will look easy on paper…Verticals = revenue…LOB’s = profit and/or contribution…Services = customer loyalty/satisfaction, but boy does it get messy. It should create a healthy tension in the organization as long as its proactively managed. This one will take time to sort out and all those lane violators will want to make up their own rules and/or change the ones that exist. At the end of the day, err on the side of the customer and/or what makes best sense for the organization.

Tips on how to survive:

Clear Definitions on the Role/s – almost everyone will get the logic and/or rationale for the change and intuitively understand what they are suppose to do. The challenge is they may not, or most likely will not, know how to do it. I’ve seen this story a dozen times….create the org chart, make the announcement to the company; lay out some targets…now go. The missing piece? No one has given anyone instructions on how to do their job. Invest the time to be crystal clear on what and how you want the job to be done. It will go a long way in keeping the “lane violation” from causing problems.
Hiring From the Outside – it’s taken me a while to come to this but I think you may be better off hiring new blood to run the Verticals, especially if they are new. If your business is product focused and has been aimed at one or two specific industries consider hiring in talent from the industry you want to penetrate.
Verticals Go Forward – the role of the vertical should be to understand the needs of the industry/customers (market sensing), the positioning of competitors, manage pipeline, and position the organization/product/services value proposition to be successful. They may also own account management activities. If they do, a line should be established on how big an account should be to warrant that type of coverage (more on that later). Notice I didn’t say develop products and/or services because they shouldn’t! Vertical folks will be invaluable resources for informing new products/services and adapting existing, but they should not drift into the LOB lane…they own products. If done right they should have an idea of what customers will be 2-3 years out and should challenge the organization to catch up with offers.
LOB’s Go deep – the role of the LOB should be to develop a standard set of products and services that fit common needs of customers across industry and meet a defined profit target. They may or may not own the P&L, it depends on the industry but they should control PRICING. Enabling the sales organization (the Vertical) with good content to support their business development efforts and informing the services/solution organization on their needs is core to their role. LOB’s should also understand which channels support what products/services and provide them with the right funding/incentive model.
Services and/or Solutions Go Long – this group may often feel like the orphan in this new model but don’t neglect their needs, voice or insight. Most likely, they know the needs of the clients as well or better than the verticals, and how well products/services/solutions actually work. This group should focus on serving the needs of existing customers and finding ways to improve, strengthen and expand that relationship.
Not every ‘customer’ needs to be in a Vertical – small and some medium customers don’t need and/or fit into a Vertical. Their needs may not be that unique and/or warrant the type of coverage of other larger customers. Additionally, if you’re deploying a geographic coverage model it just doesn’t make sense in some areas. A dense concentration of customers like the Northeast can support a vertically aligned sales force but in the upper Mid-West…forgettaboutit. Run the territory models on what makes sense.

Direct Marketing Done Right

Original post date November 3, 2008

Click on the image above. Now this is how you market in a down economy. Over the past year I’ve focused on the virtues of Web 2.0, but it’s time to give a “shout out” to ol’ school direct marketing, especially when it’s done this well. It’s from Boden, a children’s clothing catalog company.

This letter is a virtual clinic on how to do DM right. Things to love about this piece:

Quick Service Number – immediately connected to my account info…they know me as a customer…and that I’ve bought (a lot apparently) in the past. Most likely, it also serves as a tracking code. Bonus incentive: if I use it when I call I will receive free shipping, which would probably be the case anyway but they’ve given me an incentive to give them the tracking code.

The Opening Sentence/Paragraph – it’s about me (actually, my wife) right out the gate. You’ve maybe got 2-3 seconds to connect with the reader nowadays, and you can’t start out with what you want or who you are because the reader doesn’t care. I also know what you thinking, how is it that your wife shared a letter like this given the comments that we bought “armfuls” last year and we were “one of their best customers.” Two reasons; 1) she’s an ex-agency person and appreciates a good piece like this, and 2) the letter mentions that we’re not buying as much this year…there’s the positive spin.

Use of Levity/Comedy – this is extremely hard to do well and it is a bit edgy but I love it…makes you want to read more. The use of British humor (this is a UK based company) also adds to it. Folks have been saying for a while that the best creative has been coming out of London. Got to admit I’m seeing more and more evidence of that…but I also have to giving credit to the Geico Gecko (the Martin Agency) for paving the way here as well.

Personalization – from the owner/founder Johannie Boden herself. Have no idea what her first name is or even if she’s even a real person… could be Tommy Bahamas’ sister for all I know, but I like the personalization. Hands down, DM from an individual to an individual always has the best response rates. Writing good copy that sounds likes it’s coming from a real person and not just a signature, that’s another story…maybe even another post.

Customer Buying Behavior – they’re obvious tracking and have noticed a change in my wife’s habits; this is critical in a down market. Watch your best customers and their transactional behavior…probably should have started last year but it’s never too late.

The Solution/Offer – Look up DM best practices and “the experts” will tell you that you should test multiple offers… 50% off, half off, or buy one get one free, and you should, but in today’s economy real dollars savings is a real winner. Simple, tangible and it can be combined with other promotions. “Ol’ whatshername” came up with a custom solutions just for us. She determined that the most likely reason we haven’t been buying lately is price –and she’s dead on…their cloths are on the high end. Back to school this year meant going to Macy’s with a hand-full of 10-20% off coupons.

Limited Time Offer – yep, got to have it. And the time period is getting shorter and shorter. Seeing an interesting trend with the use of limited time offers. This use to be the go to “hook” for PC manufactures and mass merchandisers now I’m seeing it in all kinds of retail situations, and most interesting is it’s use in fund raising. Mobile opens up a whole new dimension look for that next year on Google’s G1 phone. Instant offers feed by GPS that expire very quickly…use it now or lose it.

Creative – notice that the offer gets a third of the page, and is very colorful with offsetting large and small images. The $20 offer is supersized and next to information on where to redeem it. Your eyes are drawn to it immediately and it’s the motivator that determines whether you’ll invest the time to read the text above it. It is also perforated and complete, so if I only read the offer and tossed the top, I would have everything I need to understand and use it. Notice how they personalized the offer…”…I run out soon.” Love it!

At the end of the day the ultimate measure of good DM is performance/results. In my house, it killed but then again we were an easy target…they knew us all too well.

How Process Can Impact the Customer Experience

Pick up any book on Customer Service and the first tip on how to improve or provide a good customer service experience is to “listen to the customer.” This advice is so incredibly obvious and intuitive that you shouldn’t need a book to tell you. Yet putting it into practice is incredibly hard to deliver. Why?

Recently, a transportation company set out to answer that question. Our task was to discovery the key to delivering a “good customer service experience.” We surveyed over 500 customers, conducted multiple focus groups and held one-on-one interviews. And after all that data collection, what did the customers say they wanted?

They wanted the company…are you ready for this…”to know them.” Know them personally and their business. Defined by having an understanding of their business so that you can anticipate their needs, and as a result, be a valuable partner. Doesn’t sound too difficult to deliver, right?

In this case, it was. The company had no customer service standards, and no rules to govern customer interactions. They also lacked a centralized customer database to capture and archive customer conversation and data. To make matters worse they delivered customer service in a decentralize environment with over 100 centers, all operating independently.

Given that scenario you would think that this company could implement some simple fixes that would have a big impact—some simple fixes. But first you must understand how the company got into this situation in the first place.

At its core, this is an operations driven company, and customers can sometimes get in the way of efficiency. Their culture and core operating model was to move a box as quickly as possible from point A to B without damaging it.

Customers who have special needs and/or require assistance slow down the process. In this environment, delivering good customer service can be too costly and/or too inconvenient. The insight was that the (logistics) process was found to be more important than the customer. Internal systems (or lack of), compensations, key performance indicators were all designed to move freight, not to measure customer satisfaction.

The feeling was that if a package made it to it’s final destination on time, and in reasonable shape, customers would be happy, and for the most part they were. It’s when that process broke down that customers wanted more. They wanted the customer service rep to know them, their company, their issue and have a solution.

And with that, the company had its answer. The challenge that remained was to change the corporate culture. Unfortunately, that turned out to not be as easy as going from point A to B.

How US Air Killed the Customer Experience

Original post date October 27, 2008

Last week I took a flight to Orlando. I fly a good bit and have reached a preferred status (whatever that means) on USAir, so I got bumped up to first class. Big deal! No meal, a 30-year-old plane, a terminal and jet port that looked out of a third-world country. I know I sound like a whiner, but hang on, I have a point.

The industry that led the way on defining the customer experience in the glory days of “jetting” and customer loyalty with reward cards has lost its way. In particular, the U.S. carriers are lost in a forest of bankruptcy. As the rest of the world moves towards enhancing customer experiences and building customer advocacy, the airline industry seems to be doing everything it can to move in the opposite direction.

For example, the airline I mentioned above now charges $15 dollars for the first (yes, the first) bag checked. As a result of that brilliant money making idea, we now have flights delayed because everyone is trying to jam their bag into an overhead. Or how about charging for water, tea or coffee? Yes, on this same airline coffee and sodas will now cost you two dollars. On the flight down the price of beer and wine was $6; two days later on the return it was $7. It’s probably close to $10 by now.

Maybe you’re saying that they have to do that because of fuel cost, labor cost, etc. Well then, how is it that Virgin Airlines, in particular Virgin Atlantic in the States is able to make money in this industry despite its new planes, expansion of routes, etc. Because Sir Richard knows it’s about the Customer Experience!

Southwest Airlines has turned this into a whole campaign. The strong, well managed will make the weak pay for this approach. The bottom line is that “nickel and diming” your passengers/customers isn’t going to make the airline profitable again. In fact, it will probably do the opposite.

What will help restore profitability to the airlines? Well I’ve a got a few ideas: how about we start with Innovation…then good management practices…and a decent labor contracts, etc.! BusinessWeek ran an piece on the performance of innovative companies in its September 22, 2008 edition. Companies known for delivering innovative customer experiences have an average stock return of 2.5% and revenue growth of 5.1% from 2004-07. Those with innovative business models were more impressive with a 16.6% return and 7.2% growth.

So I say to the airlines, to get flying again…innovate yourself out of this nosedive…and give me back my free coffee!

Financial Services Melt Down

Original post date September 23, 2008

Wow, what a couple of weeks it’s been for the Financial Services industry. Investment Banks have disappeared, the government owns the world’s largest insurance company and Congress is debating whether taxpayers should foot the bill to get us out of the largest financial debacle since the great depression.So what might all this mean to sales and marketing folks in the industry? Our Financial Services practice and I have spent the last week and a half looking at the changes and have come up with a list of potential areas that may be impacted…negatively or positively. I’ve even gotten feedback from a colleague in Europe on what this might mean internationally. Keep in mind that the crisis is shifting everyday, so this is like trying to look over the horizon while standing in quick sand.

Here we go:

Greater regulation across the industry will reduce the number of ‘innovative” products making it more challenging to differentiate by product. As a result, companies will need to increase the importance on competing through superior distribution, and having an unique segment aligned value proposition.
A greater need for solution sellers vs product pushers – In this environment, sales channels with reps that can sell value will be essential.” Additionally, the need to sell new services “bundles” necessitates more sophisticated reps. Product Pushers” who sell on price will continue to erode already pressured margins. We may also see someone like Progressive uses their direct model to commoditize more products/services perhaps some low end products in the Commercial Insurance market. If you are an agency or broker, move up the value chain to selling sophisticated service solutions. Wholesalers and/or Aggegrators may help facilitate that shift. Relationships are still key but “best price” will continue to be the key consideration driver.
A significant need to lower the cost to sell – Increased regulation most likely will add cost and/or impact margin. Companies will have to find a way to do more with less. They may also look to new lower cost channels to distribute products. Relationships + low cost, self service channels = success. Because solution sellers are hard to find and more expensive, there will be a focus on finding ways to create “leverage” for channels/reps.
Customers will have greater leverage – Good customers will be in the driver’s seat. They will be more cautious, demand greater value and lengthen sales cycles. Profitable customers will be highly valued and targeted, see bullets 6,7, and 8.
New risk models or new underwriters – There may be a need to rethink how companies evaluate, take on, sell and/or manage risk. This may also be impacted by new regulations.
Improved segmentation & predictive modeling – Cost pressure and increased competition will force the need to improve targeting, increase yield of programs and campaigns, and get the most out of existing customers (increasing cross sell and upsell opportunities).
Increase focus on retention and loyalty – Investment banks, now bank holding companies or a part of a Retail bank will now have to fund their activities on customer deposits rather than “funny money”. Look for them to come after your best customers.
New competitors, “Super Banks” & consolidation – Look for the pace of consolidation to pick up with the recent changes. The banking landscape has changed with Goldman Sachs and Morgan Stanley becoming bank holding companies. This sets them up to either acquire banks themselves and/or merge or being acquired. Existing players, such as BofA and Barclays, are picking up the pieces that will help them expand services.

My colleague, Mathew Stewart in our London Office chimes in;

Safety in geographical diversification–Major international banks will seek a more geographically diversified portfolio. Being active in U.S. and Europe is not sufficiently diversified to protect against the crisis, as UBS discovered. Those who were strong in China, India, and Brazil have faired better. For example, HSBC’s huge U.S. write-offs were counterbalanced by spectacular gains in their Asian operations, so their shares have stayed stable. Santander, a European bank, has faired well due to its involvement in Brazil, and is now buying up businesses from cash-strapped competitors, e.g Royal Bank of Scotland. Some of the bigger banks will seek to copy HSBC and Santander – most do not have sufficient reach, and are more likely to merge with a domestic competitor.
Domestic mergers lead to channel rationalization headaches. More domestic banking mergers mean more headaches around how to combine two different sets of distribution channels. These are tough decisions. Huge investment has been sunk into branch networks, a regulated sales forces, broker networks and brands. Exit costs are very high. Banks need a rational basis on which to base their channel rationalization decisions.
You’ve killed your partner channel. What do you do now? Over the past 10 years many of the reputable agents and intermediaries have come to rely more and more on cheap credit deals for their income. When the banks stopped lending they were the first to go bust – not just the charlatans and quacks, but some good people who will not now come back to the market in a hurry. When the bank is ready to expand again, how do they rebuild the partner channel?
Look again at Buy vs. Build. Mergers also present dilemmas for product portfolio managers. There are make or buy decisions for different product categories– e.g. should a bank sell its own general insurance? Difficult to know what will happen here. Will the drive for more transparency in investment products actually extend into all FS products?

Marketing Sherpa’s B2B Demand Generation Conference

Original October 18, 2007

I just returned from speaking at the MarketingSherpa’s B2B Demand Generation Conference in Boston and I came away very encouraged about the future of B2B marketing.

For the first time I am seeing B2B marketing attract top talent. B2C has gotten more than its fair share because of the attractiveness/sexiness of life in Advertising, the CPG industry, and other Brand/Creative centric areas. Top Schools like Kellogg have been sending their best and brightest into those jobs for years while over in the world of B2B, marketing has been seen as the red headed stepchild to the favorite son Sales.

Outside a few companies in Hi-Tech, B2B marketers were usually guys who couldn’t cut it in sales, senior executives who were parked in marketing until retirement, or young attractive women in sales support roles. But the times are a changing…big time.

With the rise in interactive marketing, new digital media, and the need to measure ROI, the world of B2B is now attracting serious talent.

Young marketers are now coming into the space. They understand how to use the tools of Web 2.0 to build communities, how to better communicate concepts and ideas, and how to measure the impact of these efforts. They are now becoming smarter at understanding buyer behavior and how to tap into it, influence it, and measure it with tools. Maybe even smarter than the chosen ones…

CMO Council’s Design & Align Report

Original Post Date April 23, 2007

The Define & Align the CMO report is avaliable to today after 2 years in the making. The report actually turned out to be more interesting than we orignal thought based on our working hypothesis.

The year-long research by the CMO Council and MarketBridge encompassed qualitative and quantitative interviews with CMOs, CEOs, board members, senior marketers and executive recruiters throughout North America. The 80-page report, priced at $295, along with a complimentary executive abstract, is available for download at http://www.cmocouncil.org/.

Here’s a teaser of some the insights coming out of the research:

Confusion over the role – the casualty rate of Chief Marketing Officers can be reduced if CEOs and boards better understood the role, requirements and value of a CMO and empowered the right individuals to architect all aspects of a company’s operations around the customer experience.
“A Fixer Upper” – the report points out that title inflation, unrealistic expectations, flawed hiring practices, talent deficiencies, and lack of requisite business and strategic leadership skills are big contributors to the limited shelf life of CMOs. The research also points to the fact that 50 percent of executive searches are to replace incumbent CMOs who are primarily hired to fix broken marketing organizations, not drive business value.
R-E-S-P-E-C-T – the study uncovers startling contradictions in upper management: most executives consider the CMO a valued member of the executive team, yet they also believe many CMOs lack the background and skills needed to be a top managementplayer – a challenge numerous senior marketers share with their CIO counterparts at many companies. Additionally, in a sharp commentary on the connection between strategic value and performance, most CMOs involved in top-level decision-making get high marks from their CEOs for their overall performance, while those CMOs who remain in tactical mode get significantly lower grades.
Show me the Money! – nearly three-quarters of the C-suite executives surveyed consider the marketing organization “highly influential and strategic in the enterprise.” At the same time, nearly two-thirds also say their top marketers don’t provide adequate evidence of ROI with which to gauge marketing’s true performance.
Getting a Grade – In a clear sign of the strategic role played by marketing executives, nearly 70% of the CMO respondents to this study report directly to their CEO. However, only 40% of that number get an A grade for their performance from the CEO…most likely the ones who could demonstrate their value! For the most part, CMOs get more respect from the boardroom than from the CEO. Most of the board members surveyed, over 80%, believe that within the next two years, the CMO position will gain greater credibility with the rest of the management team. But in another reality check, less than 20 percent also say that an increasing number of CMOs will rise to the CEO position.
Longer Tenure – A majority of the recruiters surveyed believe that CMOs have a shorter shelf life than other C-level executives. The average tenure of CMO respondents to this study was 38 months. (In a past report, the search firm Stuart Spencer pegged the number at 23 months). We had a professor from a top business school involved in our research…he’s a data/analytics guru. He was also familiar with the Stuart Spencer report, here’s a dirty little secret…CMO’s your tenure is longer than what SS reports. Don’t believe the hype…they are an executive placement firm.

The research concluded that the most successful CMOs are aggressively instituting rigorous performance measurement and analytics in every aspect of their organizations, and tying those metrics to revenue and profit growth.

How the Big Agency Model Really Works

Original post on January 5, 2007

Caveat: I wrote this post 2 years prior to joining an advertising agency. It was based on my experience working with clients and their agency “partners.” Having now been “in the business” for close to 3 years now (with a mid-size agency), I wasn’t too far off the mark.

The Big Agency Model

Dissatisfaction with the “Big Agency” business model has recently made the news. Some are calling for a new advertising model, that the old global network model is dead. Here’s one man’s cynical view of why and how the “game” really works.

The Game

Big agency wins account with contract “pitch team”, innovative creative, and a promise of a global platform designed to create consistent communication, production efficiencies, and improve program/people spend, etc. The client drinks the “kool aid” but then quickly comes to realize that it was a sham.

The first play of the game comes with the introduction of the lead account manager, who looks nothing like the person introduced as the account manager in the pitch. Shortly afterward the signed scope of work, they start to doing an impression of the “invisible man.” And the once senior and experienced account team also starts disappearing, only to be replaced by fresh faced staff of kids just out of school.

The account relationships sputters along with marginal program/campaign performance. The client BU’s and regions get fed up with the “Global Platform” (never getting the attention and team promised) and start going outside using smaller, more responsive agencies (who happened to be the talent that left the big agency).

The innovative “creative” shown to win the account turns out to be the only truly creative thing produced in the last few years and it gets recycle in multiple pitches.

Big agency realizes the account is at risk and begins acquiring the smaller agencies serving the client to secure the account. If the client is willing to commit to retaining the agency after all this…they promise to win them an award and get them really good concert tickets.

Again, this is just one man’s opinion…I could be wrong.