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This week I had the pleasure of contributing an article to the Chief Marketer web site. The article is about using web casts to drive leads and ROI. This is a topic quite familiar to King Fish as we manage over 250 web casts yearly for our clients.
To read the article please click here to go to the Chief Marketer site, and check out all of the great content they have on many other issues relevant to today’s marketer.
This year’s Digital Hollywood conference in Los Angeles has been shedding light on the significant challenges marketers face as they try to lasso prospects online. By and large, the panelists have been candid about the immaturity of this medium, but have been unified in their belief that traditional advertising is waning, and providing prospects with meaningful online experiences is the cost of entry.
The panelists, most of which carried senior executive titles, provided sound bites that had me in complete agreement. Here is a sample.
During a session entitled: The Web, Social Media and Advertising: Transforming and Disassembling the World of Traditional Media and Communications, Matt Rosenberg, Group Director, Organic said that to be successful, “Brands are immersing themselves in the content experience…you need to let your brand take a backseat.” I absolutely agree, and that is a core strategy at King Fish Media, where our job is to help clients engage with prospects and clients on a far more meaningful level than brand advertising offers.
Recommended contacts who spoke at this panel:
Raquel Krouse, VP Social Media, Interpublic Emerging Media Lab
Matt Rosenberg, Group Director, Organic
Mark Lewis, Strategic Planning Director, DDB San Francisco
The next session, Bridging TV and Broadband: Strategic Relationships – Advertising, Technology and Content, took the full customer immersion concept to a different level. A senior executive from the Home Shopping Network candidly evaluated her brand, and said that the universal knowledge of her brand allowed for movement into new media platforms (Interactive TV and .TV), saying, “People at the company worried about these platforms, but with the huge brand loyalty, they go wherever the brand goes and build communities there.” We, at King Fish, describe this phenomenon as owning, not renting your own media channel – Private Media.
Recommended contacts from this panel:
Jeff Miller, President and CEO, ICTV
Fred McIntyre, SVP, AOL Video
On a separate note, I hope to never again hear these words as much as I have during the last three days: “paradigm” (thought we were done with that), “frictionless”, “zero sum game”, “net loser” and “value proposition”.
During each of these sessions, I heard frequent confirmation that intent-based vs. interruption-based communications is the most effective means for clients to communicate with their prospects and customers; custom media provides the single strongest venue to effectively achieve success with this effort.
The proposed take over of Yahoo by Microsoft is a fascinating intersection of marketing, technology and advertising, with Microsoft motivated by its inability to compete with Google in search and online advertising. If I were in Steve Ballmer’s shoes I would probably do the same thing, but this strategy is a classic example of fighting the last war.
Mergers in the tech world never seem to work out for a variety of reasons, but mostly because they forget about the customer or take them for granted. These deals always sound good in the conference room where insulated executives pitch each other on stories of efficiency and synergy. They think that one plus one never equals three, in some cases such as TimeWarner/AOL – one plus one equaled .75.
Trying to merge cultures, technologies, people and rivalries is always a mess, and the needs of and desires of customers always take a back seat. It is always assumed that if “Joe” is a customer of Company B, and it is bought by Company A, then “Joe” naturally becomes a customer of Company A. This is faulty logic – our man Joe has no relationship or loyalty to the new company, and may not even like them (remember the HP/Compaq merger). The market has already selected Google as the de facto search standard by a huge margin. Why they would think that combing the second and third place search engines would get people to switch. The wisdom of crowds has spoken and it is not talking about the MSN network.
I have always been a big fan and heavy user of Yahoo’s content and email, but frankly, their search is not nearly as good as Google’s. I have started the day with my customized myYahoo page and used their email service forever. However, if a Microsoft-owned Yahoo tries to convert me to a Hotmail account, I am gone, and so will others who don’t want an email address that looks like it comes from an adult site.
Microsoft has to be very nervous about Google’s success and plans for the future. According to the New York Times, MS is heavily dependent on sales of operating systems and Office (Word, Excel, PowerPoint and Outlook) for profitability. In the last quarter alone their operating profit from Office was $3.2 billion on $4.8 billion in sales. That is literately printing money and a business model they need to defend.
It is hard to imagine a time when corporate America won’t be using MS Office, but fast forward 10-12 years. Do you really think we will all still be using packaged software that costs $400 a pop, or will we be using some sort of Software as a Service (SaaS) or ASP model? Check out Google Docs and you can see they are moving in this direction. That thought has to scare the heck out of Microsoft. Not to mention mobile computing and other platforms where they are lagging behind.
Technology is a cruel business, where one moment you are the hot new thing, the king of the hill, and a minute later you are yesterday’s news. Google will not be toppled by the combination of Microsoft and Yahoo. However, one day they will likely be knocked off the mountain by a group of brilliant kids who get their start in a garage.
I’ve been talking with marketing managers at vendors and large integrators, and they share a common complaint: their efforts are unappreciated and often dismissed by their sales counterparts.
No shock. Research conducted by VARBusiness last year found that marketing and business development ranked among the least valued items for improving sales and growing a business. Conversely, greater management focus and expanding sales teams was ranked among the best actions to drive growth. In other words, brute force wins over strategic development.
Nothing could be further from the truth. In fact, channel dogma holds that resellers (solution providers, integrators and system builders) generate leads on behalf of their vendors. The reality, however, is solution providers don’t generate leads, are horrible at marketing and don’t do enough to promote their own brands.
What’s to blame? Two of the great evils of the IT industry: compensation plans and vendor brand supremacy.
Innovation and growth require risk taking. Compensation plans, however, counter risk taking. As products become commoditized and markets become saturated, vendors and solution providers will bring new and complex products to create new revenue streams. Sales teams are often compensated on gross revenue of best selling products. When they’re given a goal for sales, sales teams will often devote the bulk of their attention to products that will get them to their goal fastest without consideration to overall growth of the business. This is also why companies create special sales teams when introducing new products and services; they’re unencumbered by legacy sales and products.
Solution providers don’t do enough to develop and promote their own brands. Instead, solution providers rely upon their vendors’ brand strength to drive sales and the vendors prefer it this way. To draw an analogy to the automobile industry, no one buys a car body, engine, tires, drive train, seats, windows and lights and then builds a car; they buy a car that is the final product of scores of suppliers. Nissan Motors, for instance, has more than 10,000 suppliers that feed parts to the manufacturer for the assembly of its various cars. Yet, the general public knows few of those suppliers even if they are the best parts makers in the industry. The contrary is true in the IT industry, where vendors want brand supremacy over the brands of their resellers, integrators and solution providers. No one buys an IT system; they buy the pieces and then pay someone to assemble them.
Vendor brand supremacy has the unfortunate effect of creating partner reliance upon the vendor for marketing and lead generation. So long as vendors continue to promote their brands over the brands of their channel partners, the solution providers will look to their vendors to either supply marketing or underwrite their marketing efforts.
To achieve real growth, businesses must be willing to take risk. Corporate leaders may understand the risk imperative; what they need to do is remove the obstacles to risk and structure their channels and compensation plans to encourage their field teams to embrace the challenge of risk rather than just maintaining their personal revenue streams.
Send Larry your thoughts and feedback: lmwalsh@twentyonetwelve.biz or at www.twentyonetwelve.biz
Everyone talks about the midmarket as some magical land of endless riches. It’s as if technology vendors and solution providers will be blessed with pots of gold if they catch the midmarket leprechaun—lucky charms included.Few technology companies are cracking the midmarket or anything below the “enterprise” level because they’re incorrectly sizing up the segmentations. Part of the problem is how they’re defining the various market bands.
The most common market segmentation model is the following:
The market breakdown is far more complex and segmented. Business consumers cannot be unilaterally placed in arbitrary bands based on their number of employees or gross revenue because even though “we” may say they’re midmarket, some very small companies have the IT infrastructure and support needs of very large organizations. Likewise, very large organizations may have thousands of employees, but very few “knowledge workers,” or people who use the IT infrastructure.Some vendors and analyst firms have subdivided the midmarket into upper and lower midmarket; midmarket and SMB; or midmarket, small enterprise and enterprise. Regardless of how they carve up the midmarket, they continue to treat the customers in this aggregated band as the same type of customer. This monolithic thinking typically results in unfocused marketing, higher cost in sales and lower revenue returns.
Technology companies should adopt a more flexible market segmentation model that approximates the position of customers in more realistic bands that reflect the maturity of their business and then adjust their position based on their unique characteristics.
In general terms, 2112 segments the market in the following bands:
Some may dispute designating the midmarket in the 50 to 249 seat band. Conventional thinking would say that it’s simply too low. The reality is far different. According to Internal Revenue Service reports, there are 31.3 million businesses in the United States, of which 29.9 million gross less than $1 million a year. If you assume that a million-dollar business can only support five to 10 employees, the bulk of the identifiable market actually falls below the SMB level. Once a company gets above the 50 seat level, they start to take on the characteristics of a formal business, but they remain informal and entrepreneurial. Once they peak above the 250 seat mark that they start to take on the characteristics of an enterprise. They have more formal departments, management hierarchy and purchasing policies. In other words, they look and act like an enterprise on a smaller scale. More importantly, they want to be treated like an enterprise.
Because many technology companies don’t understand that size doesn’t matter when you’re talking to a customer, they fail to engage with their prospects on a level that is meaningful to them. Don’t try to tell a $50 million company with 300 employees that they’re a small or midsized business. They may be small compared to ExxonMobil or Goldman Sachs, but they’re the big dog on their block and expect to be treated that way.
Correctly segmenting the market has a direct impact on go-to-market strategies, sales planning and cost of sales. Technology vendors and service providers should reassess whom they consider to be SMB, midmarket and enterprise, and then apply a right-sized products, focused market strategies and appropriate sales models to successfully reap the greatest return with the lowest cost of sales.