Audience Marketing: Death to the Product “Selfie”

Companies may not intend to be narcissistic. But they unintentionally produce a lot of “product selfies.” Marketers start out right. They consider customer needs when answering the question, “Why buy my product?”  Then customer focus stops there. Most companies give only superficial attention to the context in which their audience will consume their message.  However, an IDC study finds that the situation is about to change as leading tech companies ramp audience marketing to a whole new level.

Customers perceive content to be self-serving when it talks only about the features and benefits of the product with insufficient effort to match these to the buyer’s context. What’s missing are the answers to the question, “How can we help the buyer consume this message? What does the buyer need to hear, understand, trust, and accept our value proposition?” When content is offered without a true audience filter, product messages have the same tiresome, annoying, self-centered demeanor as your teenaged niece’s 15th selfie. No matter how cute she looks in her prom dress.
 

Isn’t Audience Marketing Pretty Basic?

While IDC found that almost all tech companies surveyed use some degree of audience marketing (indeed, segmenting customers should be Marketing 101) only about 26% of them can be considered advanced — and even the advanced companies have significant opportunity for maturity.

What is changing in the most advanced companies is the depth, degree, and focus on the audience. Said one expert interviewed by IDC, “Buying a list of hospital CIOs and slapping a photo of a nurse on your website isn’t vertical marketing.”  Audience marketing requires today’s marketing organization to take on a much larger and extra layer of work on behalf of the customer. Leading companies are stepping up to this task by dedicating audience-focused resources as an “ambassadors” for their customers.

Reversing the Effects of Sales Erosion

For B2B companies, it used to be salespeople who primarily filled the customer context gap. It was salespeople who were trained to listen for customer need. Salespeople translated the company offerings into something meaningful to the customer. Salespeople still have this role — but they can only perform it when they have the opportunity. And that opportunity continues to erode. IDC’s annual IT Buyer Experience Study consistently reports that for the average IT purchase, buyers are nearly 50% of the way through their decision journey before talking with sales. The increased percentage of buyer engagement through digital communication channels has also eroded the critical customer context cushion.

Audience marketing is the function that replaces this cushion. By devoting staff and program dollars as audience ambassadors, marketers will identify this gap and execute appropriate programs to fill it.

What Do Audience Marketing Leaders Do Different?

The most distinguishing factors between companies advanced in audience marketing compared to average or beginner companies are the following:

Appointing an Audience Marketing Leader: Advanced companies are about twice as likely as average or beginner companies to have a named leader in charge of audience marketing. When a company puts a leader in charge of an initiative and makes a practice a corporate-wide mandate, the culture starts to change in a big way. Audience marketing gets visibility. Metrics get put in place. People begin to get recognized and awarded for skills learned and for achievements. Investments and resources are allocated.

Branching out to explore many audience marketing strategies: IDC examined the popularity of various audience marketing strategies and found that advanced companies use a broader variety than average or beginners. Overall, segmentation by Functional Role (C-level, IT, HR director, etc.) is the most popular strategy and is used moderately or extensively by 100% of advanced companies and over 80% in the other groups. Vertical Industry is a close second. Buyer behavior segmentation is the hot, up-and-coming strategy — but it is more difficult and more sophisticated than the other segmentation strategies studied and thus is used the most infrequently by companies at all levels. 

However, advanced companies are moving ahead strongly, and IDC expects to see use of behavioral segmentation increase significantly in the next few years.

This blog first appeared on LinkedIn and is a summary excerpt from the IDC research report Audience Marketing: Replenishing Customer Context authored by Kathleen Schaub #257372. Subscription required.

Social Buying: The Importance of Trusted Networks during the B2B Purchase Process

Everyone’s hot to leverage social selling and social marketing. But what about the other side of the equation? Do B2B buyers use social media for purchasing support?  An IDC study says yes! And contrary to common assumptions, it’s the senior executives who are most enthusiastic.

The most senior buyers are the most active social media users. IDC’s Social Buying Study, completed in February 2014 in collaboration with LinkedIn (Slideshare version) studied the online social practices and preferences of B2B buyers. The study concluded that 75% of the B2B buyers studied and 84% of C-level/vice president executives use information from social media and interaction on social networks to make purchase decisions. I’ll be talking about this study at the sold-out Sales Connect conference later this week.

Social buying improves decision confidence.  The operative benefit in social buying is the ability to access trusted networks to increase confidence in high-stakes decision making. When asked about their agreement with various statements about social media, respondents gave these top three answers:
  • They want to use vendors that have been recommended by people they know
  • They want to work with sales people who have been referred to them
  • Their social networks are critical for checking references

Social media make accessing trusted networks easier. Buyers have long trusted their offline professional networks for this purpose. Online social networks improve access to trusted existing networks and open up networks that more easily extend beyond traditional boundaries. The bigger the buying decision, the more important social networks become. The study found that social buying correlates with buying influence. The average B2B buyer who uses social networks for buying support is more senior, has a bigger budget, makes more frequent purchases, and has a greater span of buying control than a buyer who does not use social networks.

B2B buyers use different types of social resources at different stages of the decision-journey. It’s important not to lump all social media into one big stew of a category. “Social” is a media attribute that enables peer-to-peer audience participation. Some media are highly social and others not at all. 

  1. Early Stage: when buyers are exploring whether to solve their problem, they favor news-type resources. Industry-specific media are #1, internet search (a socially-curated information service) is #2, and microblogs like Twitter are #3.
  2. Middle Stage: when buyers are evaluating solution options, 3rd-party experts become #1, industry-specific media are #2, and internet search is #3.
  3. Final Stage: Online professional networks (e.g., LinkedIn) are buyer’s the #1 preferred information source in the final stage of the purchase process, when stakes are highest. This final stage is the riskiest stage because by this time, buyers are teetering on the brink of commitment where they will soon reap the benefits of a great decision or plunge into the abyss.  It’s at this point that they most need the confidence advice provided by their professional network. Online network services like LinkedIn make this easy. Third-party recommendations are #2 and topic-specific communities become #3.
ESSENTIAL GUIDANCE
  • Relationship building, referrals, and recommendations are shifting online, so make social marketing and social selling a priority. Social marketing and social selling are not responsibilities that can be relegated to a special team low in the organization. Marketing executives should consider social aspects to be an integral attribute of all campaigns. Sales professionals and others in key customer-facing roles need to be active on social networks. At best, companies will miss an important opportunity to connect and at worst could incur real damage.
  • Respect the context of social interactions. Understand that when using the digital channels, buyers are seeking access to their trusted networks for information to increase decision-making confidence. Social channels are not simply a new avenue for spamming or cold-calling. Instead, each individual must earn his or her place within the trusted network of people that buyers will invite to participate in the purchase decision.

Are Ad Agencies Keeping Pace with Marketing’s Massive Digital Uptake? (Hint: Maybe Not)

Today, marketing’s equivalent to the Brady Bunch’s “Marcia, Marcia, Marcia!” just might be “Digital, Digital, Digital!” This is with good reason. Since 2009, digital marketing spend within large B2B tech companies has grown, and is growing, at an enormous rate. As you might have seen, IDC expects the entire tech industry to pass the 50% mark of digital spend vs non-digital spend by the end of 2016! This is the client side, but what about on the agency side, are these important partners keeping pace with their clients? At the end of April, Ad Age published their most recent “Agency report”, it shows the agency industry’s digital revenue over the past 5 years. While, agencies’ digital revenues are growing and, as a percentage, these revenues are comparable to what their clients are spending on digital – the lack of substantial growth for agencies’ digital revenue is notable. 
As seen from the image above, 5 years ago agencies were already generating over 1/4 of their revenue from digital, where as tech companies were spending only 13% of their budgets on digital. Since then, these same digital marketing budgets have grown at a CAGR of approximately 21% – agencies’ digital revenue have grown closer to a 6.5% CAGR, a third the rate of tech marketer’s digital budgets. This begs the question, are agencies keeping up with digital innovation? Does the agencies’ slower digital revenue growth give us a glimpse into the future where in-house marketers are the digital experts?
Below are two comments that I think help parse out this story:
  1. Chapter  7 in Scott Brinker’s (AKA: @chiefmartec) marketing book, A New Brand of Marketing, “From Agencies to In-House Marketing”,  lays out the in-house vs agency shift perfectly. Traditionally agencies’ bread and butter is within the advertising campaign – as advertising has moved digitally, ad networks and ad-tech have continued to mature allowing practitioners to work directly with these networks and/or utilizing programmatic ad buying to optimize their spend. In a sense, cutting out the middle man (agencies). This might help explain the large difference in growth between digital revenue growth at agencies and digital spend from the practitioner. While companies are spending more dollars on digital, it is more of a do-it-yourself approach.
  2. Anecdotally, through my conversations with clients and marketing executives, on more than one occasion I have heard marketers bringing core agency work internal. The two main reasons for this action are:
    •  Scope: For marketing executives who are trying to build a full scale demand engine or attribution models, they are finding it very hard to identify an agency partner who can deliver this vision from start to finish, particularly with expertise across the entire project. (A fair caveat is very few companies can do this internally!) They are still utilizing agencies, but typically for projects around high level strategy or vision and/or very specific tactical portions of their larger campaigns.
    •  Speed: To truly compete digitally, marketers have realized that speed is an asset. From content creation, to adjusting advertisements in real-time and to making sure the latest and greatest technologies are being tested and used, speed is a factor. Advanced marketers are often realizing by bringing many of these activities in-house, it is much easier to increase speed – it is also much easier to retain the talent that can execute in the manner necessary to succeed.
The above instances and the overlying data are something for marketers to be aware of and agencies to be concerned about, but, like with most changes this is not a black and white scenario. With agencies, similar to most marketing organizations today, it’s about reinvention. My colleague Gerry Murray, outlines some of this reinvention that IDC expects to happen within the agency (or more specifically marketing services) world in his latest blog post, Marketing as a Service (MaaS): The next wave of disruption for marketing tech. Ultimately, the vendors that continue with business as usual, relying on media buys or traditional agency/client relationships, risk stagnant digital revenue growth and an outdated offering.
What success are you seeing within your “in-house marketing team” and how are you continuing to leverage your agency partners? I would love to hear your opinion in the comments below or by reach out to me on twitter @SamMelnick

Why Business Executives are the New IT Buying Center

Several times a week the IDC CMO Advisory Service gets inquiries from tech company clients about how to shift their company mindset to a new and different buyer.  IDC’s IT Buyer Experience Study shows that business buyers have 53% of buying influence in the earliest part of buyer’s journey and their influence stays high throughout the entire process.  The tech buyer’s influence, while still important, is comparatively waning.

A successful shift to a business-buyer approach will accelerate if you understand what’s behind it.

Front office automation has more business risk than back office automation.  The 2nd Wave (as IDC calls the client-server era) was mainly about automating things inside your company.  The 3rd Wave (as IDC calls the current era of cloud, mobile, social, and big data) is about automating your connections to the outside world (I call it the company “skin”).  When tech problems happened deep in inside your company, it was frustrating but not devastating.  The worst business tech problem of the 2nd Wave was being too slow to adopt new technology leaving competitors or upstarts to sail past you with business process advances.  That problem is still a concern today.  However, add the horror of screwing up in front of customers, investors, influencers, indeed, the whole world!  Just ask the CEO of Target.  Business executives are forced to pay attention to technology today – whether they want to or not. IDC forecasts that business executive budgets for technology will outstrip IT budgets.

Technology is easier and prettier now. Back in the day it took a real expert to understand the ins and outs of information technology products.  The products were intimidatingly gray and beige and filled with exposed wires and chips.  They hummed, got hot, and sparked out with regularity.  No wonder the finance and marketing execs wanted to leave those suckers alone.  Now most of those wires and chips are moving to the “cloud”.  Doesn’t that sound nicer?  Devices you touch are smooth and have pictures. Better design makes technology 99% invisible (to quote the title of one of my favorite podcasts).

Business executives are smarter and more confident about technology.  Back in the day, technology was a startling thing that business people in the prime of their careers had never seen, much less used.  I remember one intelligent, capable, and admired, C-suite executive who used to have his administrative assistant print out his email because he wasn’t quite sure how to use it.  Now, anyone younger than 60 came of age with PCs and programmable everything.  Information about technology is available at everyone’s fingertips and accessing opinions from your professional network is incredibly easy. While a portion of the population will always be skeptical or frightened about the next new thing – it’s not likely to be IT that they are scared of (drones, anyone?).

Here are some steps you can take to accelerate the shift to a business-buyer focus:

  • Bring focus on the business decision-maker up to par with the technology decision-maker.  This is the Goldilocks strategy – not too much but not too little. For most new tech installations, IT will no longer instigate nor approve nor pay.  However, at some point the business executives will want to bring in their IT partner to take over some aspects of the decision.  Keeping adjusting your investments in content, campaigns, training, etc. until you’ve reached a balance in results.  Because this is a change you will have to overinvest in activity to achieve new results.
  • Take clues from the shifts described above. Focus value propositions on front office business problems.  Build in cloud, mobile, social, and big data messages and capabilities (IDC says 90% of IT growth is coming from these areas). Make the “ugly” of tech 99% invisible – in your customer engagement, your sales discussions, and in the products themselves.  But that doesn’t mean be fluffy. Much of what is called “thought leadership” is astonishingly useless.  People are trying to solve real business problems.
The worm has turned as the saying goes. We are never going back to the old way.  Tech companies who succeed will be the ones to step up to investments they need to make to serve the empowered business buyer.

Measuring Sales and Marketing based on Customer Outcomes

Have you ever used Uber X, the freelance taxi service? Half the cost of a cab and twice the level of service. The cars are immaculate. The drivers are almost overwhelmingly nice. They care deeply about your experience. Not because they want a tip. They want your 5-star feedback. That’s so important to their success that they will do almost anything to make sure you are happy. It is a customer first model that works because customers have the ability to give feedback that has direct business impact. It’s the eBay model applied to real world human interaction.
Think of your salespeople as Uber drivers, they interact with customers every day. Your marketing is like the car – is it in the right place at the right time and taking the customer where they want to go? These things matter tremendously to customers and yet we have no means to empower them to drive the behavior of marketing and sales at the moment of engagement. We have customer satisfaction surveys. They are important but lack immediacy and context for sales and marketing.
I recently came across two articles that may be the proverbial starting gun for measuring customer focus. The first from the HBR blog, “Bonuses Should be Based on Customer Value not Sales Targets,” profiles how GlaxoSmithKline no longer calculates sales bonuses based on prescription drug sales but on a basket of metrics related to patient outcomes. The second on the Forbes blog, “The 5-Star Employee, Why we need a Yelp for Business” presents a provocative picture of why employee ratings should be standard practice.
Clearly there are cultural and generational issues at stake and a lot of education needed to make these transformations acceptable and actionable in a way that improves outcomes for everyone. As customer facing technology coalesces around the CX Cloud model, marketers should think about how to get customer feedback more frequently. It will require innovation born of experimentation. Of course, no one wants to rate every piece of collateral. But maybe every third touch or at specific points in the nurturing process. Companies that figure it out will have the great advantage of being able to monitor customer experience and course correct in flight as opposed to relying on satisfaction surveys that are too little too late. Best of all, customers will feel the power of the relationship, something they won’t get from traditional models. Uber X is not better just because it costs less, it delivers more at the same time.

The one framework your CMO must share with your CIO

So many marketing solutions are available that it is very difficult for marketers, chief digital officers, and CIOs to have a holistic view of what they have, what they need and why. IDC has recently created a tool to help – The 2014 Strategic Framework for Marketing Technology. This tool provides a visualization of the different technologies needed to support different marketing organizations no matter how small or large, digital or non digital, modern or not. Pictured below is the whole map which presents solutions in four broad categories:
  1. Interaction: The primary function of these solutions is to be customer facing
  2. Content:  The primary function of these solutions is to facilitate the production and management of marketing content
  3. Data and Analytics: The primary function of these solutions is to store and produce insights from customer, operations, and financial data
  4. Management and Administration: The primary function of these solutions is to provide internal communications, workflows, budgeting and expense tracking.
IDC’s Strategic Framework for Marketing Technology
v1.0 = 78 categories 

We have found that the complexity of technology requirements can be defined around a few factors:
  • Company size
  • Business model (eComm, B2C, B2B direct, B2B indirect)
  • Vertical industry
  • Mission of marketing (awareness, demand generation, etc.)

Using these factors, the map can be easily customized to show the current state, recommended next steps, and long term vision for just about any marketing organization. If you’re a pure eCommerce company the advertising and digital commerce areas will be much more important and sales enablement would disappear. If you’re a B2B direct company digital commerce might be a very low priority and sales enablement would loom large in your plans. Regardless of whether you’re CPG, Health Care, Financial Services, startup or global enterprise, we can build a map to get your marketing, IT, and executive teams on the same page with respect to your marketing technology requirements.

For more information on our framework and the services we offer around it, please contact me at gmurray (at) idc (dot) com. 

Top 3 customer experience challenges for marketers

Customer experience management is fundamentally about providing a seamless and consistent flow as prospects move through different phases of development and points of contact with a supplier. Delivering on this presumes a level of connectedness that many marketing organizations struggle to achieve. The reason for the struggle is that there are three significant forces of fragmentation opposing their efforts: specialization of roles, organizational hierarchies, and tactical technology. These forces threaten every marketing organization with two fatal flaws: they slow everything down and fracture the customer experience.
Three forces of fragmentation that marketers must fight:
1.     Specialization: all areas of marketing execution have become inch wide mile deep endeavors. As a result, there can be many degrees of separation between key roles such as social marketers, event planners, web administrators, technical writers, etc. What do these people talk about when they get in a room together? Does anyone else care how the events person manages food service or logistics?

How to combat the fragmentation of specialization: It is becoming clear that the one thing all marketing roles now have in common is the need to master data and analytics. Each specialized role produces and consumes data from all the others. It is critical that everyone in marketing understand how customer and operational data flows, how others use the data they produce, and the best analytical practices for gaining insight. This should be a key topic of conversation and community building.
2.     Hierarchical org charts: Marketing is no longer a command and control world. Yes, there is an overlay of reporting that has to go “up the chain.” For many marketing leaders that grew up with the traditional B-school approach to management, adding layers to the org chart is a natural approach. However it results in compartmentalization that left untended creates a culture of disconnectedness.

How to combat the fragmentation of hierarchies: Marketing organizations should be defined around processes not activities. Marketing processes must be supported by collaborative environments that foster greater visibility and coordination between contributors. Enterprise social networks are becoming essential for creating a culture of openness and connection. Organic approaches are not enough, marketing leaders need to seed the social network with process oriented communities such as: campaign management, sales enablement, content lifecycle management, etc.
Transforming Marketing From Silos…
… To Systems
3.    Technology: IDC identifies nearly 90 different categories of marketing technology (not including middleware and infrastructure!) That alone should tell you the function and the IT market serving it are unsustainably fragmented. The deployment of highly specialized tools can empower people within their specialties but can leave them on a technology island in the greater scheme of things. Major IT vendors have started to consolidate some of the basic building blocks, but there are still many areas in which niche/best of breed capabilities are needed.

How to combat the fragmentation of technology: The two centers of gravity for your marketing IT infrastructure are your integrated marketing management solution and your website. They should be intimately tied to each other and all other marketing systems/tools should integrate with one or both of them. This becomes a forcing factor for integrating processes and data flows. Marketers also need to demand more of their technology vendors to accelerate the evolution of platforms that tie together the systems of engagement, content, administration and data.

The most successful CMOs will ensure the pervasive deployment and adoption of technology increases collaboration, socialization, and systems thinking. They will design marketing organizations around customer-centric processes and exert deliberate efforts at all levels to combat the forces that threaten the connectedness needed to serve up a seamless customer experience.