The Problem with Soundbites

Part 2 in a series about the nature and principles of value propositions, positioning, and competitive advantage.

 

Recap - Value Proposition

Firms exist to create value for customers and, in doing so, compete in the market to earn a profit and achieve the goals of the firm.  A value proposition describes the ability of the firm’s offering to provide greater value to its target customers than the offerings of its competitors can.

 

Those last two words are highlighted for a reason.  The same offering can represent different values to different customer segments, depending on the specific needs of each target group.  In fact, what is valuable to one target market may have no relevance whatsoever to another target market.

 

Like beauty, value lies in the eye of the beholder.  Sales people - especially those who sell complex products to B2B customers - readily recognize this.  A good sales person is skilled at eliciting a buyer’s needs and motives, and then adapting the sales presentation to focus on the attributes of the offering that best fit the buyer’s needs.  Other attributes, no matter how appealing they may be to other buyers, are kept in the background.

 

The Problem with Soundbites

There’s a reason mission statements are crisp: so that they clear and memorable. 

 

It’s hard, though, to find a simple statement that aptly and fully describes a firm’s strategy.  For example, one can say that a firm’s strategy is “to be the low price leader in its industry.”  It’s a convenient shorthand device, but it says nothing about the tactics that shape the strategy.  How are costs kept low?  Is quality traded off to achieve low price?  Are assortment and variety constrained as occurred with the Model T - any color you want as long as it’s black?  Or perhaps the offering is only distributed in urban areas, and not outside.

 

The shorthand form can only be correctly interpreted when it is accompanied by a detailed description of the tactics used to achieve the strategy of low price leadership.  It is much the same with articulating value propositions.

 

Marketers are expected to come up with a memorable and effective soundbite that captures the essence of the offering’s core value.  Just like Apple did with the iPod: twenty thousand songs in your pocket.  But, too often, it is left like that - a catchy soundbite with very little back-up substance.

 

A value proposition soundbite left standing on its own, no matter how catchy, is just like a strategic soundbite: leaves a lot open to interpretation.  And it won’t earn any marks with the sales force.

 

From Soundbites to Value Maps

You can be sure that Apple did not print up cards printed with 20,000 songs in your pocket, hand them out to all their retail sales people, and then tell them to sell a boatload of iPods.  And if they have such a card as part of the iPod product intro, you can be certain that it did not stand on its own: there would have been plenty of back-up material.

 

Value maps are like strategic maps.  Value maps show the linkage of every relevant attribute of an offering to the needs of each target market.  If there are 5 target markets, then 5 value maps are needed.

 

A value map relates relevant and strong attributes of an offering (compared to competitive offerings) to the needs of each segment.  In the case of B2B customers, and increasingly consumer targets, detailed profiles are given that describe key purchase drivers along with effective ways to link the offering’s attributes to each of the drivers.

 

Constructing effective value maps takes good research and effort.  But the results are worth the effort.  Your sales personnel will be the first to thank you for them.

 

Social Technologies Change Sales and Marketing

When it comes to understanding and applying social technologies to solve business problems, Sameer Patel is at the head of the class.  He runs Sovos, a company devoted to the task, and writes an interesting blog about connecting the enterprise using social technologies.

We first met in 1999 when I was building a very large sales portal.  It required several technologies to support it.  As I lacked the expertise to make those choices, Sameer came to the rescue.   A year later later he came to my aid again when we embarked on adding collaboration technology. 

A decade ago, social technologies were limited to file sharing, chat, directories and message boards.  Today’s social technologies for internal business have come a long way - SalesForce Chatter and Microsoft Sharepoint, for example.

During the past year Sameer and I have talked through the intersection of social technologies and sell-side business processes - usually over coffee at Peets.  He’s done a fair bit of development work in how to use social technologies to give sales and marketing a boost - enough that he’ll soon present his thoughts in his blog.  I’ll post the link when it’s published.

Just how can an social technologies help organizations improve sales and marketing processes, and make them more effective?

One answer lies in making it easier for employees with complimentary expertise, interests and charters - no matter how geographically or functionally separate they may be - to self-identify and collaborate on common ends.  There are, however, less obvious ways of applying social technologies to help businesses accomplish the impractical - if not the impossible.

Consider this: the way large firms choose markets, and allocate sales and marketing resources to them, has not changed in 70 years.  Large firms achieve economic scale by mass producing the goods - and services - they sell.  A firm may have thousands of SKUs on its price list but, as with automobiles, these represent economically manageable variations on a handful of product lines (color, horsepower, memory, disk drive capacity).

However, variation is the enemy of scale economics.  

As Henry Ford said of his Model T, “You can have it in any color you want as long as it’s black.”  Product line managers work the trade-offs between unlimited choice and financial sense.  Engineers and designers devise ingenious ways to offer choice and variety at minimal cost (e.g. 250,000 apps for the iPhone, computer memory and storage plug and play design).

Marketing and sales coverage follow suit.  Sell-side resources are allocated based on establishing market segments that yield the largest revenue at the highest margin.  The largest multi $B technology vendors seldom stray far from segmenting markets in classic ways: geographic, Buyer size (SOHO, SME, Enterprise), Vertical (Pharmaceutical, Financial, Government) and by application or use case (payroll, patient records management, securities trading).

Multi-$B firms are build on the foundation of one-to-many.  One-to-one has never been a scalable proposition.

Social technologies change this.  Firms no longer need to abandon the long tail. Social technologies make one-to-few and even one-to-one market relationships not only possible, but profitable.

• Social media enable niche buyers to not only self-identify but, through wikis and message boards, band otherwise disparate buyers together to solve common problems.
• Internal collaboration technology similarly brings like-minded sales people, marketers, engineers and designers to work on market opportunities that lack the size to be officially blessed at the corporate level.
• Marketing and user support materials can be created through connected communities, and provided at negligible cost.  Social networks including support websites, wikis, blogs and micro blogs do the job just fine.  Vested interests drive the content and instill them with vigor.

Readying one’s firm for this is no small feat.  It requires equal measures of vision, courage, commitment, and the willingness of managements to step outside their comfort zone.  It also requires a willingness to take risk, accept that failure may occur, and to learn and try again.

None of this can happen with committed and forward-looking leadership.  None of it will occur without hard work and a little luck.

Put Sameer's upcoming blog on your 'must read' list.  I can't think of better brain food for those who want to change the economics of sales and marketing.

No One Said Managing Would be Easy

Over 30,000 books are currently available on the topic of managing.  There are both great and popular thinkers and practitioners - Ram Charan, Harold Geneen, Peter Drucker, Jack Welch, Ken Blanchard and Spencer Johnson,  and John Kotter among them.

My favorite read is Drucker’s Management: Tasks, Responsibilities, Practices.  At 800 pages it’s a weighty tome, yet every page begs careful attention for the insights it contains.  The book’s value increases as one gains experience.

Management theory, and its models, are prone to be complex.  After all, marshaling one’s resources and shepherding them through a day in the life of the world toward some goal is no small feat.  The sophisticated theories have their purpose.  But they can mask the fundamental nature of what managing is.

I favor simple models.  It’s far easier to flesh out a simple model to give it texture and applicability than it is to decompose some behemoth and distill it down into its essential elements.

So, here is a simple model - and it’s easy to remember.  It’s specific to the management of people.  

 There are four things that can be managed in people: Knowledge, Skill, Attitude and Activity.

I’ll use the example of managing a sales person to illustrate.

• Knowledge is a straightforward factor to manage.  Knowledge can be taught, communicated, and acquired through reading, observation and experience.  A sales person can learn product specifications, selling methods, how to fill out an order, and so on.  Testing one’s know-how is equally straightforward.  One either can - or cannot - demonstrate recall.
• Skill is more challenging to manage.  Skill is know-how - the capacity to convert knowledge into desired results.  Effectively and repeatedly, such that the outcome is never seriously in doubt.  Knowing 10 different closing techniques is one thing.  Achieving a consistently high close rate is quite another matter.  The more sophisticated the skill, the more complex the behaviors that comprise it, and the more astute a manager needs to be to determine which behaviors must be tuned and reinforced.  But some factors, genetics being one, limit everyone’s ability to apply particular skills well, e.g. inherited muscle composition is a greater determinant of success in long distance running or sprinting than is weight training.
• Attitude is, without doubt, the most difficult factor to manage.  It’s often easily observable: winning attitude, own in the dumps, lack of confidence, success-oriented, customer-oriented.  But attitudes are even more complex than skills to manage.  Especially in a team or an entire organization.  Get a group of managers in a room and ask them how important good morale is to achieving success.  You’ll get strong and ready agreement.  Next ask them how to achieve and maintain good morale.  They’ll be all over the map.  Good attitude is like good art: easy to spot, hard to create.  Managing the attitudes and tenor of individuals and organizations comes with the territory.  There are many formulas for coaching and developing skills, but scant little tried-and-true for instilling or rebooting good attitudes.
• Activity is the appropriateness of an action relative to the result.  Sales people engage in typical activities: prospecting, getting appointments, proving claims, making proposals, closing orders.  Activities are concrete, observable, and measurable.  Which is why activity management is the manager’s sweet-spot.  A sales person may have enviable closing skill, but if that person avoids prospecting they’ll never got the opportunity to close.  Most every sales, marketing or CRM statistic or report of any value measures activity relative to outcomes.  Consider: qualified prospects, sales-qualified prospects, forecastable prospects, conversion rate, close rate.  They each checkpoint an outcome relative to the activity intended to drive that outcome, and typically some comparative standard.  Performing the right number of sales activities at the right time does not guarantee success; but not performing them assures failure.

Knowledge can be acquired.  Skill can be taught, coached, directed and reinforced.  Attitude is the X-factor - easy to see, hear and feel, but inherently challenging to manage.  Activities are the one concrete and measurable factor that managers can get their arms around.

B2B Marketing That Works

I once estimated that I had a hand in building or executing demand creation campaigns that supported over $150B in sales.  That’s a big number.  And it represents the goal of many hundreds of marketing programs and demand creation efforts.  Yet, that number would have been much bigger had even 1/3 of those campaigns been truly effective.  But they weren’t.

I’d estimate that perhaps 1 in 10 of the marketing campaigns we ran was really effective.  It sounds shockingly low to be sure.  But I’d wager that it’s not much different than the performance achieved by most B2B firms.  Certainly not those whose marketing I’ve had a chance to take a look at in the past 18 months.

B2B marketing is hard to do consistently well.

Why is it so low?  There are many reasons - some of which I’ll blog about another time.  For me, one stands out: the failure to measure the right thing, the right way.    Without good and valid measurement performance becomes art - it is in the eye of the beholder.  Which is why I’ve become such a fan of the insights of Rosser Reeves.  

Rather than dwell on why things don’t work it’s more useful to understand something about the 10% that do work.  In all of my experience I observed that, time and again, successful B2B marketing campaigns share five things in common.

1. The target market is well and accurately described.  Painstakingly well-defined market and buying profiles take the guesswork out of creating demand.  A sturdy profile is like a pilot’s pre-flight checklist.  It leaves nothing to chance.  In B2B where the demand most often must be harvested by the sales organization, the target profile is both map and compass.  It increases the odds that a sales person will know, in advance, exactly who to prospect, where to find them, and how to appeal to them.
2. A superior value proposition.  For starters, there must be a tangible and relevant benefit to the buyer.  And to raise the bar that benefit must be unique to the firm among its competitors, and compelling enough to drive a spike in order to increase velocity and volume.  And that applies to every vertical or horizontal segment the firm chooses to pursue.  What resonates for a pharmaceutical buyer may be ho-hum to a heavy equipment manufacturer.
3. A concrete and compelling market offer.  In a world of seemingly limitless choice your offer must stand out from the crowd.  It must be concrete, easy to understand, easy to accept (not the no-brainer you might think it is) and beneficial to act upon.  An action to take, a period of time in which to act, a configuration to purchase - overall, a reason to decide in favor of your product, and decide now.
4. Buyer Engagement.  “If you build a better mousetrap the world will ...” most certainly not beat a path to your door, let alone know where to find your door.  You must proactively choose how to get buyer attention and present your offer.  The buyer can find you (the web) or you can find them (email, direct mail, social media, telesales, personal sales).  I don’t prefer one over the other.  I prefer both.  Together, acting in unison.  Just like meeting up at a restaurant.
5. A call-to-action for the Sales organization.  I have seen more potentially good marketing campaigns become also-rans because Marketing did not invite Sales to the party.  The first test of whether a marketing program can be sold is to sell it to Sales.  If Sales buys into it you are assured of a winner.  If you can transfer confidence to the sales organization you can expect it will find its way to the customer.  Sales is your test kitchen.  You must teach them the recipe.  Let them taste the finished product.  And show them how to make it on their own.  Only with guidance served up under a critical eye can performance follow.

Following these principles assures that the B2B marketer will enjoy satisfactory results for her efforts.

Death by Spreadsheet

I've been a fan of Edward Tufte for years.  You may not recognize his name, but you've certainly seen his handiwork.  He is the statistician who has made a profound impact on data visualization.  This is the practice (to me, the art) of turning data into a visual feast of information.

There are some fine examples.  Napoleon's March to Russia by Minard is a classic.  As is the London Underground map.  If you really want examples, you can spend some time and money checking them out here.

The New York Times has, in my opinion, one of the best data visualization teams in the news business.  So much so that, after reading the Sunday NYTs, I'd often clip out the graphics page, put it in my bag, and bring it to the office to show everyone as example of what we needed to do in the business.

Here are two examples of what makes the NYT graphics so good.

• The Guantanamo Detainees
• Reactions to the death of Osama bin Laden

You could see all of the foregoing represented in spreadsheets or lists.  But I've got to believe that you got the point of both of these in a flash and, if you wanted to "drill down" into the detail you had no problem doing so.  

And then there are some other fine example from the New York Times that, though not classically data visualization, nonetheless makes point across extraordinarily well.  Here are three I particularly like:

• the 2011 Japan earthquake - before and after comparisons
• another before and after - the Fukushima Daiichi Power Plant
• a mashup of data visualization and sound - Radiolab

Besides being fun to look at, there's a serious point to all of this.

A manager in a business of any size knows that she spends a good portion of her time in meetings.  As she rises in an organization - especially a very large one - meetings become the principal activity of her day.  Whether conducted face-to-face, vie conference calls or Skype, executives are exposed to an enormous amount of data about the business.  And it's typically presented in spreadsheets, lists and dashboards, all beautifully brought to life with the aid of PowerPoint.

The brain goes into overdrive to search out the meaningful cells in a spreadsheet (hint: they're not always the ones highlighted by the presenter) and to wade through the sea of red, yellow and green dashboards to figure out what is really working, and what is not.

Such devices are necessarily abstract (and often misleading) representations of the state of the business, the health of the organization's connection with its customers, and the prognosis for the future.

I've sat in many a meeting like this, and my retinas have easily received the light from 50,000 spreadsheets and slides cast on them.  If you're anything like me, the brain begins to rune out after awhile.  Probably some neurological reaction to stay sane, if nothing else.  Jack Welch had the same aversion.  So did Lou Gerstner (though he was less polite than Jack about it).

Every once and a while, though, I can recall someone presenting a complex bit of data all wrapped up in one ingeniously simple and elegant slide.  Not as flashy as the folks from NYT can serve up, but pretty good nonetheless.  And, best as I can recall, those who drew the shortest, simplest and clearest path to their point usually prevailed.

If you need further convincing then perhaps Tufte's poster makes the point.

Customer Service Tanks Even Further

Whether you're a sales manager, a marketer or run a business you owe it to yourself to read the report on customer service in July's issue of Consumer Reports.

Based on a nationwide CR survey, it chronicles the frustration leading to searing rage experienced more and more often by customers attempting to be serviced by the companies with whom they deal.

Among the gripes and statistics (some eyebrow-raising):

• The inability to get a human on the phone is the top-rated blood pressure generator, garnering an 8.9 our of 10 on the annoyance scale (10 = tremendously annoying)
• a not-surprising 64% hung up on customer service reps without having their problem solved, though a whopping 64% walked out on a store salesperson
• 65% have dealt with rude salespeople at least once in the previous year
• when it comes to online, only 2% like live chat to resolve an issue ... still fewer prefer email
• It took 6 hours for on AT&T subscriber to cancel his landline service.

On the other side of the teeter-totter though, there are bright spots: Apple, L.L. Bean, Dillard's, Crutchfield.com and Sony, to name a few.

I've been belligerently consistent (annoyingly so, I'm told) about stating one thing for years: marketing is not what a department does, it's the process of how the company defines itself to its customers.  Good companies in it for the long haul court their customers, and see customer problems as the stepping stone to enriching their brands, building loyalty, and driving the top line.  Good companies view customer service as a differentiator, not a cost that must be bludgeoned into submission during economic downturns.