Wednesday, February 22, 2012

Product vs Solution Marketing

Product Marketing

Product marketing is a more traditional way to look at marketing. Typically it encompasses the first four Ps of the marketing mix: product, price, place, and promotion. I've heard it said that's laughably vague, but when you consider everything necessary to market a product, vague may be necessary to encompass all aspects of expertise.

The product marketer promotes the features and benefits of a product without really considering all of the needs of the target persona. I don't mean they're ignoring those needs with respect to the product, but they may not think about contingent needs. The product marketer simply doesn't consider partner products, services or other components common to solution marketing in the product marketing strategy. Because of this, the person undertaking this kind of marketing needs to be an expert on their product in every capacity including market research and strategy, technology, competitor offerings, tactics and analytics. This allows for product-based differentiation and positioning rather than solution-based.

Solution Marketing

Solution marketing, on the other hand, takes those features and explains how they are going to benefit the customer and offers an entire suite of options available to them in order to answer whatever needs the customer has – in their entirety. In other words, the solution marketer not only needs to understand the product but also the segment or industry landscape, the partner products, industry trends and how they all fit together. In addition, a solution-oriented marketing strategy is typically an enterprise-wide undertaking, so the professional must be able to operate in a much more cross-functional leadership role. Steve Robins, the founder of solutionmarkingblog.com explains it this way in his presentation Introduction to Solution Marketing:

Product MarketingSolution Marketing
ProductFeatures and Benefits
  • Best features
  • Newest capabilities
  • Technically advanced
  • Fastest processor
Customer Needs
  • Streamline processes
  • Improve customer service
  • Lower costs
  • Ensure compliance
PromotionPush or Outbound MarketingCustomer Engagement
PriceCost PlusCost vs Benefit

As you can see above, the 4Ps can still apply to solution marketing but I think they could be better updated to reflect the more customer-centric paradigm. We replace product with solution; promotion with engagement; price with value; and place with access. These four elements are much more reflective of how we need to update our marketing techniques to better engage the most current generations of X, Y and Z. They expect an experience not just a product.

The fact that we are asking more encompassing questions doesn’t change the process we go through in order to answer those questions but we do have to step into our customers’ shoes. We need to understand how to solve their problem so we need to be able to look at the bigger picture. It’s no longer “They need their CRM software to have features 1, 2 and 3” but rather a more all encompassing, “What regulations are there? What is their current system not doing? Will they need training? Is there a partner product that will fill a need we don’t quite have the answer to? Will it integrate with their other applications” and more.

We no longer push the information out to them with interruption marketing but rather engage them in a dialogue. We research where our customers are going to learn about our products. We find out who they’re talking to and what they’re watching. This is true whether we’re marketing B2B or B2C. The B2B customers are paying attention to what the end-users who purchased the product from the distributor are saying, just as much as the B2C customers are listening to their peers.

The price is no longer necessarily based in an “I get this many features for this price” mentality. The customers want to know not only what the features are, but is the product the right fit for the job and what else comes along with it. They’re no longer as willing to pay a higher price for unwanted features. They are willing, however, to pay a higher price if the product comes with extra training they need, or it integrates easier with software they already have in place, or a technical support plan is offered. Our customers want a value package for their money, not just the assurance that, “Yes, this product has all the features you need and it will integrate with XYZ software”.

Finally, we need to know where they want to purchase the item and how they want it delivered. We need to know if they want to buy direct, through a reseller, maybe on contract or any number of other channels. Once we know that, we need to figure out how they want it delivered. Do they want instant download? Maybe they want it shipped. And in the end, maybe there are new channels that we didn’t know about that we can take advantage of.

Conclusion

Solution marketing requires a much more in-depth approach than product marketing, but in the end, it’s the more effective strategy. It increases the customer lifetime value and satisfaction as well as increasing brand equity. The value is perceived as higher so margins increase and, taking the entire ecosystem into consideration, the potential is there for a more differentiated offering. Back in 2003, McKinsey & Company estimated, in their August 2003 McKinsey Quarterly that it could result in a 3-7% increased return on sales, but I wasn’t able to find any updated results.

Friday, February 17, 2012

Demystifying Content Marketing

Content marketing, according to the Content Marketing Institute, is “creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience - with the objective of driving profitable customer action.” In other words, it’s communicating with your customers and prospects without selling. That newsletter you receive every week that gives you “how to” tips or shares industry trends, or tells pet adoption happy ending stories – that’s content marketing. The hope behind this strategy is that the recipient will reward the purveyor of this valuable information with business and loyalty.

The challenge with this strategy is knowing where to start and what information to send. In theory, this is an uninterrupted stream of information going out via whatever channel, or channels, you select. That’s a pretty high demand on your resources if you try to deliver custom information to every segment. I’ve broken that down into a more manageable process:

  1. Simplify content management
  2. Analyze personality segments
  3. Establish the content production process
  4. Focus on relevant data

Simplify Content Management

Sure, you have customers and prospects everywhere. You can’t turn around without running into one. But the question is, where are they congregating? It’s like going fishing. You’re sitting at the top of a river and you can see all the subsidiaries downstream. They all look promising but after a little observation you notice that all the fish you’re after are located in two or three places. Those are the places you want to cast your line. The same is true of content management. Just because you can disseminate through twitter, facebook, blogs, or more traditional print media, that doesn’t mean you should. Find out where your fish are hanging out. Whittle it down to a few major sources. That’s where you concentrate your energy.

Analyze Personality Segments

Psychographic segmentation is a great tool for breaking down what information you want to send out. The confusion comes when you try to create a different strategy for each personality segment. There can be a huge number of variables you have to deal with when it comes to your buyers – so don’t create a strategy based on each personality segment. Look for commonalities. You may find that two, three or four overarching content paths that will resonate with the largest percentage of your customers and prospects.

Establish the Content Production Process

We’ve all been there. You need to write some content for a channel. You whip it out and think it’s great. You’re ready to post. Oh, wait…you forgot something – the review. And now you’re behind on your schedule. As with most things, having a formal process in place to manage collaboration and production will smooth the road. Don’t get me wrong, I’ll be the first to admit that one of my favorite things is to review and streamline processes, but for the most part they’re in place because they work –at least to some degree.

Figure out what your demands and resources are. How much time does the project require? How many people do you have on your team with the necessary skills for the project and how much time can they give, respectively? You might have to cut back on the scope of the project a little or you may be able to expand, but there are your demands and resources. Then you formalize your actual process. Typically that means going from writer to editor to final to publish to promotion. Specify who does what and how long they have to do it. Thanks to CMI for this great illustration:

Focus on Relevant Data

Finally, you’ve got your message out and you’re starting to see returns. Great! I love information. I love seeing it come in, putting it into a visual format, analyzing it and using it to adjust my strategy or design to maximize my return. Not everyone loves numbers, though, and even those of us who do know we need to pick and choose. You need to decide which data is most relevant to what you are trying to achieve. For me, that usually means conversions, traffic sources, key words, popular content, exit pages and traffic comparisons.
  • Conversions – I like to know what content is successfully achieving the desired actions. Sometimes that means clickthroughs; sometimes that means a phone call off of a sell sheet; and sometimes it means something else. The point is, I need to leverage what’s working to increase my ROI.
  • Traffic Sources – This helps me figure out where to spend my dollars. I may shift my spending from one ad to another or away from postcards and into webinars. Maybe those Google AdWords you’re spending an arm and a leg on simply aren’t working.
  • Key Words – This is probably pretty self-explanatory. Look to the ones that are working and leverage their exposure and use. Eliminate the ones that aren’t. It doesn’t hurt to look at your key phrases as well.
  • Popular Content – Again, you need to know what’s working and what’s not. If something isn’t working, rework it or replace it. I repurpose content that’s working in one channel for other channels, if it isn’t already in use there.
  • Exit Pages – For whatever reason, if you see a high percentage of exits from a particular page, there’s a pretty good chance something on it is losing your audience. It might not be pertinent to them or it might not be presented in such a way as to hold their interest. Any way you look at it, something needs to be done to keep them looking at your content.
  • Traffic Comparisons – This is a great overview tool. It will tell you if your traffic is up or down. You can compare to the same time period from the previous year or just look at how traffic is doing on a continuous basis.

Small Bites

Like any other large project or undertaking, looking at Content Marketing in its entirety can be a little bit frightening and overwhelming. If you break down into its component parts and then focus on the most relevant aspects of those parts, it’ll seem a lot more manageable.

Thursday, February 9, 2012

Relationship Marketing Has Gone Mainstream

If you aren’t relationship marketing, you’re missing out. Sure you need to generate your leads and bring in new customers, but it’s much more cost-effective to keep the customers you have. Relationship marketing is all about that. Relationship marketing strategy should be designed to inspire customer loyalty, engage the customer, and promote interaction.

The Cross-Functional Approach

You’ve heard of cross-functional teams, particularly when it comes to producing a product. In that situation a team is responsible for the entire production of the item, from beginning to end, rather than being segmented so that one person is responsible for only one step in the process. Relationship marketing is cross-functional. Ideally, it involves all aspects of the organization.

Martin Christopher, Adrian Payne, and David Ballantyne[3] at the Cranfield School of Management claim that relationship marketing has the potential to forge a new synthesis between quality management, customer service management, and marketing. They see marketing and customer service as inseparable.

I had an experience this morning that cemented that for me. I am in the process of conducting a customer satisfaction survey for one of our companies. Upon receipt of the invitation, one of our customers sent back a response in which he complained of some issues he was having so he couldn’t give us anything but negative feedback on that company. Because I am a relationship marketer, my response was to do a little customer service. Ten or 15 years ago, I might have sent that over to customer service to handle, but that’s not what I do anymore. That customer reached out to me, so it’s my responsibility to do what I can to assuage the situation. I absolutely vetted my response, but I handled it. It’s part of my relationship marketing strategy.

Customer Retention

So you’ve got the customers. Now what? Keep them. It costs almost five times more to acquire a new customer than it does to retain an existing one. It doesn’t matter if this customer is Jane Doe who lives by herself with her dog, a multimillion dollar business you distribute your manufactured products to, or even a low-bid contractor. You all have customers that you can work toward retaining and client relationships that need to be managed – even the low-bid contractor. Steven Howard, of Howard Marketing, puts it beautifully into the 7 C's of Successful Customer Retention:
  • Caring Attitude – Let the customer know they are important and that you really want to help them.
  • Customized Practices – Do what you can to meet your customer’s specific needs. Sometimes that involves flexibility, simpler forms and understanding the customer’s relationship with the company.
  • Competent CSOs/CCPs – Put people in place that are accountable and willing to take action. People who are knowledgeable and meet commitments are priceless.
  • Call/Visit Once – Don’t make your customer explain the problem more than once. Their initial contact should be the one point-of-contact for the customer.
  • Convenient Access – Structure your personnel’s hours around your customer’s needs. Contact information should be easy to find and understand, as should your website, and your ordering process, etc.
  • Compressed Cycle Times – Fast turnaround times, responsive customer service and proactive services go a long way toward making your customer happier.
  • Committed Follow Through – The first contact person follows up with the customer to ensure they are satisfied. If contact was due to a problem, they do their best to see the problem or error isn’t repeated.



When Is It Too Much?

Sometimes, as cold and calculating as it sounds, you have to let a customer go. When it comes right down to it, you are running a business. You need to weigh what it’s costing you in time, energy and money to retain that customer, versus their value. It’s one thing if you have a high maintenance customer who is bringing a lot to your bottom line, but, and this is a cold hard truth, sometimes you have a high maintenance customer that doesn’t bring much to the bottom line, so they end up costing you more than they are bringing in. I’m a little guy, so I hate saying that, but I owned my own business for a while so I know from whence I speak.

Another thing you can do is talk to your employees. They’ll know which customers have a bad reputation; which ones are costing them time better spent elsewhere; which ones are abusive and negatively affecting morale. When productivity and morale go down, so does profitability. That’s a fact.

Sometimes...you have to fire the customer.

For more information on Steven Howard's 7 C's of Customer Retention you can watch this video: