Watching some of the new ventures getting funded over the last several months, there’s an interesting trend that’s turning user-generated content into real value for companies and their customers.
One example is Driveway Software, which develops applications that insurance companies offer to their customers. The apps track driving behavior, and enable the insurer to offer discounts based on good driving habits. In the healthcare sector, companies like AFrame Digital and Lark are creating devices and apps that enable doctors, care-givers, and individuals to track patient health and provide better, more personalized care. FlixMaster collects information about how we watch interactive on-line videos so that media companies and advertisers can create more engaging content.
While the content in these instances is “user-generated,” all the work is being done within machine-to-machine interfaces. User devices or apps collect information and communicate with data collection and analytics engines to produce both individual and aggregated intelligence. That intelligence enables companies to offer new and unique products and services.
For each company that collects and uses customer-generated data intelligently, there are scores who collect data but never use it. That’s not only a waste, but also an unjustified risk – keeping customer information without carefully managing it can have legal ramifications and expose the company to liability.
Bottom Line: There are countless ways to collect data about your customers. Before you start, decide exactly why you’re collecting it, how you’ll manage it, and what intelligence and action the data will drive.
I just hosted a webinar introducing the second edition of my book, 42 Rules for Growing Enterprise Revenue: Practical Strategies for Increasing B2B Customer Relevance.
Watch the webinar to get a quick overview of 7 strategies for becoming more relevant to customers:
- Selecting markets where you matter
- Focusing on customer interactions rather than your org chart
- Using context to define and articulate value
- Collaborating with customers
- Moving from products to solutions
- Exploring vertical market alignment
- Empowering your sales channels
Enjoy, and let me know what you think!
Ways to Matter More to Customers, Lilia Shirman from Laura on Vimeo.
Last time I wrote about the implications of the consumerization of corporate buying decisions for B2B messaging. What about sales strategy? If individual employees have more power to select products and technologies, then should we sell to these “Corporate Consumers” the same way we do to consumers?
Yes.
Corporate Consumers make choices about smaller, one-off business purchases such as mobile devices, SaaS applications. That’s significant because it provides a revenue stream and an entry point into the company. In addition, many business purchase decisions involve larger numbers of Corporate Consumers as nearly invisible (at first glance) influencers. So you can use B2C tactics to create mass support for larger purchases.
Since these employees are making individual decisions, marketing aimed at individuals will most certainly sway them. Appealing to those influencers is how many companies (You Send It comes to mind) have built their B2B business… Apple has more or less been dragged into B2B by those same influencers. Corporate Consumer’s real power varies wildly, however.
And No. There are some uniquely B2B considerations:
- Recognize that those small B2C-like sales are really only beach heads. If you want a bigger share of wallet, maintenance revenue, long term contracts, etc., you have to shift modes – or more accurately, expand your approach to encompass both types of selling- and it’s best to recognize that dichotomy from the beginning.
- For larger purchases, you’ll need a way to harness the influence of Corporate Consumers. Ideally, you’ll want to gather data about individual use within each company. When going in for the enterprise deal, there’s enormous value and selling power in having better intelligence than the CIO about how employees are already using your technology. Short of that, be prepared with anecdotes from enthusiastic users within their company, and stats about business use of your product.
- Influencers don’t sign the check. You will still need B2B sales tactics to turn individual purchases into larger longer-term contracts.
- Many large corporate purchases don’t touch end-users at all. These are the big, complex, operational decisions deep inside data centers, factories, or other operational groups. Here you might cherry-pick a few traditionally B2C tactics, but the reality is that a direct relationship with a subject matter expert in your organization and a long-term account strategy are the real silver bullets.
Bottom line – if your product has a large end-user base within the company, invest in broad-base consumer marketing tactics, while still building the relationships with top decision makers. If very few people touch your product, don’t bother with the Corporate Consumers. There is a huge additional cost of sales to appeal to the masses, so make sure you really need that broad base.
More on this topic in this post
If individual employees have more power to select products and technologies, then should we market to them the same way we market to consumers?
Consumerization of corporate buying decisions is leaving B2B marketers asking if and how to use B2C techniques in B2B sales. I like to break the question up into pieces, starting with messaging, then sales strategy, and finally marketing tactics.
What’s really different between messaging in B2B vs. B2C environments?
First, consider the similarities:
Everyone develops initial preference based on emotional response, whether they are making personal or business purchases. So you must appeal to the individual and their personal priorities in both settings.
In B2B, recognize that business people often have unstated personal interests and decide how your sales strategy is going to address these. To make this a repeatable sales practice, include an assessment of personal objectives for key stakeholders in your account planning process. (Assumes you have one, but that’s a whole other topic.)
Now the big difference:
While the consumer might or might not bother to rationalize their decision, the business buyer almost always MUST demonstrate tangible (not just perceived) value to the company. While you can rely exclusively on brand image and emotional response with consumers, you have to message to BOTH the emotional and rational considerations for business buyers.
If you’ve used B2C-style messaging for a B2B product, tell us how that worked.
More on this topic in our next post.
The “As a Service” business model is spreading like wildfire – in the tech sector and beyond. This is the first of a series of observations about this old, but new again approach to business, and what it implies for both the providers and consumers of services.
For the first in this series, my own attempt at a basic definition:
“As a service” (AAS) refers to businesses that sell their goods on a subscription basis. The more traditional alternative is to sell once, and upon that sale, transition ownership from the seller to the buyer. The change in ownership is perhaps the core differentiator between “traditional” and service-based businesses. In the AAS model, the change in ownership either:
- Happens slowly over time, as in the case of businesses whose services is to deliver information or products over time – think “Cheese of the Month club” or magazine subscription.
- Never takes place at all. In this pure service model, the seller retains ownership, and in essence sells access to use the goods. This is of course the model being implemented by Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) vendors that make up the hot “cloud provider” market.
That’s my attempt at defining AAS in the broadest possible terms. All comments and better definitions welcome and encouraged!
Next time – Why switch?
I’ve spent a lot of time this year with clients including VMWare, Grid Dynamics, SymbioWare and others who are thinking about (and betting on) the future of cloud computing. To figure out what’s real and what’s hype, we’ve also talked to dozens of VPs of Engineering and IT about their priorities and plans.
Here are a few predictions for the challenges and opportunities that will be floating around in the cloud in 2011.
- Enterprises are going to continue to combine traditional IT with private and public clouds – picking the best and most appropriate of these models for each application or business process.
- The different stacks will still need to interoperate, so IT organizations will be looking for tools that were designed to operate and manage these hybrid environments.
- These mixed environments will spawn a new generation of applications that are deployable anywhere.
- Though cloud is a hot topic among IT execs, ultimately it’s a means to an end – and that end will decidedly be flexibility in 2011, marking a change from the laser beam focus on cost reduction of past years.
- Security is the #1 reason companies don’t do more in the cloud. 2011 should be a big year for vendors who can address their concerns.
- Greater cloud adoption will place more strain on the network, and network infrastructure vendors will be scrambling to support the growing demand for speed and bandwidth.
- With so many productivity and business tools now available in the cloud, small and medium businesses (SMBs) are able to draw on much more sophisticated and powerful IT resources. But making sense of the options and how they all work together will be a big challenge. That makes for a big opportunity to help SMBs assemble the right SaaS portfolios.
- SaaS for mobile will take off in 2011, likely outpacing new SaaS offerings for desktops. Lots of factors conspire here: HTML5 adoption, IaaS providers catering to mobile – witness Amazon’s recent release of Software Development Kits (SDKs) for Google’s Android and Apple’s iOS), and the fact that computing power and storage space are more scarce on mobile devices than the desktop.
- As usual with a hot IT trend, there will be plenty of companies throwing “cloud” into their marketing spiels long before they have made any substantive changes to their product offerings. Buyers will have to spend some extra due diligence cycles weeding out the pretenders.
Lots of companies are diving into their annual planning process. Many will find that time and resources are wasted on seemingly useless high-level discussions that don’t lead to specific actions, that some stakeholders participate but later don’t follow through on key portions of the plan, and that there is little consistency or coordination around how groups make decisions and set priorities.
That’s because they’re focusing on the content of the plan, while ignoring the other pieces that are absolutely fundamental to its success. Whether you’re creating a 5 year strategic plan for an entire company, or an annual operating plan for a department, consider all 3 parts of the planning process:
1. Structure : HOW you will arrive at your plan
- Outcomes – What is the scope of the plan, and what are the key decisions to be made? What should happen once the plan is completed?
- Process – How much time do you have? Which parts of the company need to be involved? How often will you meet, and what work must happen between meetings?
- Decision frameworks – What will be the criteria for the key decisions? What inputs are needed ans what will be your sources of information? What analysis will be required, will it be bottoms-up or top-down?
- Action – How will you structure and communicate the final plan to the various stakeholders? How will you make sure that everyone understands the decisions and aligns their actions towards the goals in the plan?
2. People – WHO will create, approve, own, and execute the plan?
- Stakeholders – Who are the key stakeholders for this plan, and what form of participation and communication is appropriate for each?
- Ownership – How will you ensure that key process participants take ownership for the quality of the entire plan and look beyond their own functional areas?
- Collaboration – What will you do elicit relevant expertise in your organization, enable open-minded idea creation, and reach decisions in a timely manner?
- Communication – How, when, and what will you communicate to whom in order to keep the organization informed about the progress and outcomes of the planning process?
- Commitment – How will you gain the commitment of the management team to align resources to plan objectives? Will there need to be any changes in responsibility, authority, or incentives in order to ensure commitment and ability to execute?
- Change management – How will you need to prepare and guide the organization though any changes that the plan requires?
3. Content – WHAT will the contents of the plan be?
- Financial or market objectives
- Operational execution goals
- Market, competitive, or supply chain analysis
- Strategies and tactics for reaching objectives
- Prioritization of key initiatives
- Action plans and time lines
- Budgets
I’m always looking for examples of organization who do all three components of planning well. If your company does, please comment or email me to share your experience.
What advice would you give small companies trying to prioritize target industries? Robbie Baxter of Peninsula Strategies, an expert in on-line, recurring revenue streams, asked me a this very interesting question!
At companies with a sales history, industry-specific activity and resources are focused in two kinds of areas: Where most revenue is coming from already (this is by far the more common focus area), and where there is greatest opportunity for growth in the future. There can be lots of complex analysis, but in reality few big companies do much proactive planning. That’s a whole other blog, though.
With a smaller company, the first part of that equation is missing. They don’t have the sales history, references, and channels to naturally leverage into an already-active vertical market.
So, here is a try at some things I’d look at as a small business deciding where to focus.
1. What industry will value what you do most? Where will you impact mission-critical results?
2. Over time, what group of customers are going to be needing you more and more (and feeling increasing pain you can solve) due to external pressures and trends in their industry?
3. Where are you best able to access the financial decision-makers? (This is a combination of your company’s existing connections and lists, and the target industry’s propensity for doing business with small companies.)
Note that its easier to find ways to reach financial decision-makers than to change the core value of what you do or convince an industry to focus on non-critical issues. Unfortunately, many small companies start with #3 as the first, not last criteria for selecting target markets.
Please comment with your own thoughts on selecting target industries at small companies.
