5 B2B Marketing Predictions for 2012

January 4, 2012 — Laura Ramos

Sourced from www.freedigitalphotos.net (see below)

Happy New Year! To kick off 2012, I thought I’d journey back to my industry analyst roots and make a few predictions about the issues most likely to impact B2B marketers during the next 12 months. I can’t say these predications are as well researched as my prior efforts, but – hey! – I don’t get paid to give advice any longer. (Doesn’t stop me from doing it, however.) I based this list of ruminations more on firsthand experience than third-party study and pseudo-science stuff:

1. Marketing automation (MA) interest, purchase, and use will accelerate. Despite claims from the vendors here, the MA market has been slow to develop. As the recession deepened, marketers turned to MA to cut costs and shift expenses from heads to tools. But the automation investment stakes will rise in 2012 as large enterprises move beyond initial trials to tap into the promise of building demand ahead of the sales effort. Sirius Decisions predicts 50% of enterprises will make the jump to MA by 2015 and Annuitas CEO Carlos Hidalgo expects MA purchase intent to double this year. I think the trend is positive, but that growth won’t accelerate dramatically. Experiencing this shift at a big company (Xerox) these past 18 months, I believe that the transition will be slower – and more painful – than these predictions as large enterprises in particular come to grips with the talent, process, and content issues (not the technology) that keep marketing automation on the B2B backburner.

2. Market program focus will shift from building brand and consideration to sales enablement. Marketing and sales cannot survive independently from each other, but only a minority of executives will address this dilemma in 2012. I don’t believe the solution is to make Marketing report to Sales and lose its position at the boardroom table. However, the core marketing conversation must demonstrate how marketing activity impacts sales pipeline and, ultimately, revenue. I see revenue performance management become more than just a buzzword as B2Bers start to demonstrate predictable, sustainable growth in sales, fueled by tighter marketing and sales alignment. Interestingly, notable successes will come from firms that grow sales with existing clients rather than bold moves into net-new markets.

3. The role of the customer advocate will emerge and take shape. B2B marketers have long known the value of the customer reference. Buyers want proof that you did what you say you do for someone else like them. And they want to learn from those experiences. While customer case studies and success stories were the physical and online record of this achievement, lower cost advances in technology will make it far easier for B2B marketers to capture customer testimonial in the form of video or interactive apps, particularly those suited for tablet presentation. I see companies like BrightTALK, ntara interactive, StoryQuest, and Velocity World Media experiencing a bumper year in 2012. Social networks – and plain, old, traditional industry associations and conferences — will let marketers turn clients into advocates by promoting mutual successes and shining the spotlight on customer achievement rather than product features.

4. To increase lead scoring effectiveness, marketers incorporate fit and interest criteria. Sales continues to complain that marketing delivers terrible leads. Lead scoring helps to bring discipline to the lead development and qualification process. But scoring backfires as marketers get too sophisticated too early when rating the value of prospect engagement with marketing activity. Because the threshold always changes, smart marketers will use scoring to prioritize leads, and let sales determine where to draw the line. As a best practice, they will use hard profile information – rightness of fit, account demographics, contact relevance, and audience rating – to augment softer behavioral information passed along with each “qualified” lead.

5. Content marketing will evolve as a separate function within the marketing organizational structure. The Internet has helped to make B2B buyers more sophisticated. Today, over half of the purchase decision is complete by the time buyers talk to sales. To get noticed during the early investigation phase – when the realization dawns to decision makers that the status quo is not working – marketers must produce interesting, educating, thought-provoking content. In 2012 they will quit relying on agencies to do this. The need to publish points of view in-line with thought-leading positions will cause firms (in particular: big ones) to hire or retain journalist-quality writers to pump out content for field and solution marketing programs (demand gen) to consume.

What do you see and how is that view different?  Post a comment here to share your thoughts.

PS: I sourced this image from http://www.freedigitalphotos.net/images/view_photog.php?photogid=809

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Driving Growth in B2B Companies? Try This Playbook

December 7, 2011 — Laura Ramos

December is a popular month to spend planning for the next year or reviewing current progress.  I find it is also a good month to reconnect with your corporate strategy and ask “what can marketing do to help create more predictable, profitable, and sustainable growth for my company?” Recently, I read The B2B Executive Playbook, written by my friend Sean Geehan of the Geehan Group. I think it offers a succinct summary of the factors that most affect the B2B business’s ability to thrive, with a unique perspective on one — why it’s important to focus on your current clients as a way to grow revenue. 

I first met Sean in 2009 at the Customer Reference Forum. We stayed in touch through my transition to Xerox and he invited me to speak at his Executive Summit on Business Transformation in February. He asked me to review an early draft of his book and sent me a final copy. (This is all the open disclosure stuff, folks.) I have heard him speak several times on the topic of this book.

The B2B Executive Playbook consolidates principles that apply specifically to companies that sell highly-considered products or services through a direct salesforce to other businesses. Some of the ideas here resemble others we have seen, but are good reminders. The “B2B relationship continuum” in chapter 2, for example, reminds me of research that my former director, Laurie Orlov, wrote on The Three Archetypes of IT. The “Market-Aligned Three-Circle Venn” in chapter 5 calls to mind Jim Collin’s “hedgehog concept” popularized in Good to Great.

What Sean does really well, however, is put these concepts in the context of a vitally important B2B best practice — that of engaging with your customers to collaborate on your company’s strategy directions, refer you to other decision makers, advocate for you as a trusted supplier, and do more business with you.  A lot more. 

Case in point: HCL, a professional services firm located in Noida, India.  Paraphrasing the book, HCL lacked a systematic way to interact with key decision makers from their customers prior to 2008. HCL’s Americas President Shami Khorana decided to target their “top 80″ clients  in a formal program to exchange ideas and gain their collective feedback. And to demonstrate a sincere interest in keeping their business. Khorana credits this program, in part, with HCL’s rise from $1.4B in 2007 to over $3B in 2010, with an annual growth rate of more than 20% — even through the economic downturn of 2008/09.

Through other case studies like HCL, the B2B Executive Playbook gives practical advice on how to build and retain key decision maker relationships at the right level of your organization, and how to maintain a select group of the key executive customers in your market who will advise you willingly and buy from you consistently.

Recognizing that B2B companies win or lose based on the strength of relationships with a relatively few, very key customers is the essential insight that B2B executives and marketers can overlook. Consider your 2012 marketing plans, for example, and ask how much you intend to spend on customer acquisition versus retention, loyalty, and advocacy. Reflect on how much time your sales representatives spend with real decision makers versus influencers or users (who can’t sign a purchase order.) 

If you are like most B2B, large enterprises, then you will find a quick read through this book will help to reorient your thinking around those customers who matter most and hold the keys to your future success.

Take a look: I’m sure you’ll enjoy it.

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Tackling Content Management with BtoB Magazine

March 17, 2011 — Laura Ramos

Last month, BtoB Magazine asked me to speak on a panel as part of its NetMarketing Breakfast Series at the Hotel Nikko in San Francisco on February 16. BtoB’s NetMarketing Breakfast events explore how b-to-b marketers use the Internet to communicate with customers and prospects. Together with Kevin Cox from SAP and Pam Didner from Intel, I shared a short presentation showing some examples of effective online marketing campaigns that we executed here at Xerox. 

My presentation examined two case studies: Xerox’s Real Business Live and Xerox Global Services’s Thought Leadership campaigns — both of which feature an integrated array of online, broadcast, and conventional marketing approaches and tactics.  You can download a copy of the presentation from BtoB Magazine’s site if you are interested in seeing more.

As a follow up to this panel, the writers at BtoB asked me to comment on the following question:

“How are you managing content for marketing?”

You can see from my response, that I answered the question quite literally while Pam and Mark Wilson, VP Corporate Marketing at Sybase — who I know from my analyst days and have admired his work on provocation marketing, provided more high-level advice.

Looking at the topic of content management best practices more broadly, I would echo Pam’s advice that “content is king, but creative is queen”. It’s not enough to have interesting content, but you have to present that content in a way that engages the audience and compels them to interact with you. I think good storytelling is key to making content compelling and relevant. As are proper grammar, clear writing, and the ability to write copy that reflects your customer’s concerns, not yours.

Central to any B2B marketer’s narrative should be your clients and the stories they tell about how you helped them to solve difficult problems or to make their business operate more effectively or efficiently.  So marketers, worry more about developing, presenting, and syndicating your content than “managing” it.  Because getting buyers and customers to talk about you is what gets others to notice.

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Summit on Customer Engagement 2011, Day Two

March 2, 2011 — Laura Ramos

What is “customer engagement”, exactly? I don’t think the term is one most business people would recognize as a common marketing function like PR, Marcom, field marketing, or product marketing. The best definition I’ve heard here at the Summit on Customer Engagement is:

“Customer Engagement includes the role, responsibilities, and activities around all the non-revenue value a company/organization receives from its clients and buyers.”

The concept continues to expand beyond customer reference management to include advisory councils, communities (non-developer), events (in particular virtual), and testimonial (written, digital, video, and in person.) You could argue other points, but this list encompasses about 90% of the content shared during this conference.

More generally, marketing should be all about customer engagement. The definition reminds us that: 1) Marketing’s job is to scale the opportunities our firms have too engage with prospects and customers and 2) it’s a two-way street and customers should benefit as much (if not more) than our companies do when customers engage with us.

My view today on customer engagement focused on how Xerox Services uses video to engage our customers.  The examples I shared in my presentation — available here on Slideshare – are by no means ground-breaking or completely innovative.  But the examples demonstrate how Xerox uses video to create a persistent, engaging experience centered on our customers and about how we serve them best.  Key take-aways about the connection between video and customer engagement are:

1) B2B marketers underuse video. In earlier studies I did at Forrester, just under 50% of B2B marketers said that they used online video in their marketing mix - a percentage far less than email and search marketing, but also trailing behind emerging tactics like social networks (Facebook, LinkedIn), Twitter and other Web 2.0 tools.

2) Of those who use it, 1 in 5 say video is effective in building awareness and about 1 in 10 say it works for generating demand.  Wow, that’s terrible — but why?

3) Because about 2/3 of those surveyed said they use video to demonstrate products or (worse) they don’t use it at all.

4) This is a shame because B2B marketers need to be reminded that we sell to other people, not just businesses. And, like us, those people are influenced by experiences that engage their needs, desires and emotions.  And video is one of the best ways to create that kind of experience.

5) New digital cameras, smart phones, and YouTube make video production MUCH LESS expensive than it was just 10 years ago. Production quality matters, but you can get creative on a small budget.

Luckily for me, Xerox Services marketing is overcoming these hurdles and using video to tell our customer stories. We do this by:

Most importantly, with the need to rebrand the company around our ACS acquisition, Xerox Corporate built an interactive environment called “Real Business Live” that includes both customer-centric and full production (affinity advertising that tells a customer story in a co-branded fashion) video to take interactions beyond building the “awareness” that Xerox offers more than copiers and printers to exploration of what those capabilities mean to the clients who partner with us for those services.  Of all the examples share, this one created the most interest.

This brings me back to my first point, engaging prospects and customers today needs to go beyond the purchase process. Regardless of the medium (which is video in this post today), centering on the customer, telling their story, and making sure the story presented is authentic and specific is what makes marketing more engaging.

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Live From the Summit On Customer Engagement, 2011 Edition

March 1, 2011 — Laura Ramos

This is my third time attending Bill Lee’s annual summit for customer reference professionals.  This event expanded beyond reference programs to include a variety of ways to engage with customers and help drive business. You can follow the Tweet Stream at #2011SCE for live reactions. This post describes the value I see this event deliver to the B2B marketing community that worries about what customers say on their company’s behalf.

Setting aside popular social media definitions for a second, this group truly embodies a cohesive, thriving community. Looking around, I recognize a many attendees from prior events. The key theme, using customer engagement to expand the value delivered to customers, remains current and persistent. Bill recalls a conversation with CIO of Cardinal, Patty Morrison, that defines why customers, particularly those in the C-suite, care about how they engage with vendors.  Unlike the common belief that customers references are difficult to acquire and maintain, Patty said that she wants to engage. But, in return, she wants value from that engagement.  As marketers, we achieve this by helping customers like Patty to:

1) Improve how you (as a vendor) deliver service to me (as a client).

2) Measure my participation and report on the value this activity delivers to your firm.

3) Engage me in developing best practices together.

4) Make it easy for me to partner with you and drive business together.

5) Give me new, simple, or different ways to engage in marketing with you.

6) Present new opportunities for me to engage with my peers.

Companies represented in this room, including Saleforce.com, Hitachi Data Systems, Infor, Citrix, Cisco, HP, Microsoft, SAP, Siemens, Intel, and many more, do this — with varying degrees of success — through formal reference programs, social media, online community destinations, events, advisory boards, user groups, customer media (case studies, videos, testimonials, etc.), and knowledge centers. This last approach is interesting because it begins to cross the line between customer engagement and customer support/service.

Why does an event like this attract over 180 participants, and about a dozen sponsors, during these times? By speaking to the key issues that business executives worry about.  Need proof? The IBM Global Survey of 1500 CEOs showed that “reinventing the customer relationship” is one of the top 3 issues concerning top executives.  CEOs know that social media gives buyers more control over the message and dialogue, and company leaders need more advocates to help spread the good word in burgeoning social channels where buyers turn.  CEOs also see great value when their teams involve customers in product development, marketing, and support functions to spur new levels of innovation and to get better intelligence on what the market wants and needs.

Here are the highlights of best practices shared today:

Tom Wong, VP of Customer Mojo, at Salesforce.com shared how the Dreamforce team created an app that engaged over 14K attendees and helped them to network by “matchmaking” their interests with other conference participants.

Asim Zaheer, VP WW Corporate and Product Marketing for Hitachi Data Systems showed how Hitachi blends new social channels, social monitoring, and virtual events into the myriad of traditional customer engagement programs they support. He summarized with advice that reference programs should focus on finding value for customers in participating, simplifying your messages, providing more flexibility for customers to participate in different ways, and moving the sales process along.

Surprise!  Bill collared me to join Leif Pedersen (VP Marketing, Siemens Industry Automation) and Salim Ali (Global VP, Marketing, SAP) on a panel discussion on what customer reference managers should do to become more engagement focused.

Jeanette Gibson, Director of Social Media Marketing at Cisco, shared the enormously rich set of social activities that Cisco uses to engage their customers around user events (physical and virtual), communities, and integrated media/PR.  Cisco enjoys a social-savvy audience, social corporate culture, and a few key executives who are social natives.

Karen Newman, Marketing Director, Global Customer Advocacy, Siemens shared real-life, tactical, practical experience around managing a reference program at a 500K employee company with over $100B in revenue. Challenges with getting sales and executives to support reference/engagement programs was the hot topic.

There’s more to come tomorrow, so I hope you will join in the conversation. #2011SCE

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Customer Engagement: Deepen Relationships with Community Marketing

December 22, 2009 — Laura Ramos

Last week, Forrester published my research about how to deepen engagement engagement with programs focused on your best, most active customers. I think social software and activity will play a huge role here in 2010.  Why?  Because engaging business customers requires contact. To date, these connections revolve around reference programs, advisory boards, executive meetings, and user conferences. As social activity between B2B buyers and sellers evolves, the need to transform online interactions from transactional to relational increases, particularly as marketers recognize that digital approaches can reinforce the intimacy and influence essential to building strong customer bonds. I see the shortest path to successful B2B community building starting with existing customers and focusing on community, not corporate, objectives.

To build upon this idea — and add some perspective on the research — I conducted an “email” interview with Bill Lee, President of the Customer Strategy Group.  Here is what we discussed:

Q. Forrester is showing increasing interest in community marketing, so let’s start with a definition: how do you define community marketing and how do you see the concept evolving?

A.  We see community marketing as the next frontier for B2B marketers to cross as we move from marketing practices focused mainly on broadcast messaging – a practice founded on years of outbound advertising and promotional activity — to a blend of traditional and digital, individual and group, prospect and customer marketing approaches.  Community marketing is about using marketing to engage prospects, current customers, industry insiders, and partners in dialog that transparently and collectively improves the probability of creating effective solutions to the most pressing business problems. It’s about bringing technology and services suppliers into customers’ adoption activities in support of better business outcomes. It’s how Web 2.0 technologies enable new ways to innovate, collaborate, and partner that create more productive business operations.

Q. What role do you see reference programs playing in Community Marketing efforts?

A. Customer references validate product claims and streamline the sales process, both vital activities in B2B marketing.  Reference programs play a vital role in Community Marketing because the community of a supplier’s current customers – not individual accounts — becomes the focal point for revenue generation activity.  In the near future, the customer community helps to attract, engage, persuade, support, and retain future buyers of a supplier’s products and services.  As business buyers embrace the social Web, reference management can play a breakout role in the transition from collecting testimony to building community adoption.

Q. Can reference programs add to the value that businesses must provide to attract customers into their community marketing efforts? If so, how?

A. Customer reference programs can play a vital role in executing a community-centered marketing strategy that not only attracts new customers, but also turns your best customers into advocates within the community. These programs transition from sales support to community build in 3 important ways:

1) Reference customers make community activity intimate and influential, not just interactive.  Involving references in online, social activities — like peer discussions, rating and voting on products, content contribution, and so on —helps create positive product experiences and increases the likelihood that buyers will, in turn, advocate to others.

2) Social referencing involves your best customers in community building. Tapping reference customers predisposed to sharing experiences and speaking on your firm’s behalf is the best way to attract a community following. In B2B marketing, social media value will come from using Web 2.0 tools  to deepen customer relationships after deals close and implementation challenges begin.

3) References deliver content that creates conversation — and value for — buyers. Success stories and insight are the currency needed to sustain ongoing community activity. Because they participate readily, reference customers double their value when they energize community activity and discuss best practices.

Q. You’ve attended a couple of our conferences. What do you see customer reference programs doing that is exciting? What can or should they do to get better, and play a more important role in their businesses?

A. Today, I think the most exciting achievements happen when marketers give back real value to reference customers. The biggest benefit of advocating on behalf of a vendor should be membership in an exclusive community of like-minded participants where interacting with each other, as well as prospects and the public, is part of the draw and reward.  To play a bigger role in business, customer reference managers need to take advantage of emerging social business behavior more. They need to move beyond the physical, group setting and let references engage outside the boundaries of the formal program. Less than 30% of respondents to our earlier survey of customer reference professionals enabled their references to build profile pages, guest blog, rate community-contributed content, or author wikis, activities that permit customers to strut their stuff in the online, virtual world and create broader connections without having to trip through the legal, communications, or approval cycles that plague the production of more formal testimonial or case studies.

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More Live From Summit on Customer Engagement 2009

October 21, 2009 — Laura Ramos

The Summit on Customer Engagement continues Tuesday, October 21.  From yesterday’s session, here are my takeaways from the panel discussion where Jeff Tinker, SVP Wholesale Product and Market Strategy, Wells Fargo, Asim Zaheer, VP Global Product and Competitive Marketing, Hitachi Data Systems and John Pasquarette, VP of Product Marketing for Software, National Instruments talked about their current, direct experience with customer programs. Bill Lee moderated and took questions from the audience.

What do your customer programs look like and what are the best practices that you see work?

Wells Fargo started by focusing customer engagement programs at the B2B user level, but has shifted more dollars and attention on the decision maker level .  They have built online community destinations that successfully attract users (of small business banking products, for example), but now face the challenge of involving large business decision makers and creating deeper relationships with them online. Right now, customer engagement with decision makers happen offline.  To ensure maximum value for participants, they interview advisory board members before each meeting, synthesize what members want to hear from bank and each other, and facilitate this discussion.

Wells launched user community 2 years ago as a separate site with separate registration.  Flat growth in community membership resulted. Recently, they integrated the community into the main Wells Fargo portal to make the community more accessible.  The Wachovia acquisition, and increased interest in industry-specific topics, led to a doubling in their advisory board numbers. To meet this increased demand, Wells is looking at how to do customer advisory meetings virtually.

Jeff sees written case studies get less interest than in the past; current clients want to interact and ask questions of each other — whether about Wells products, how the merger is going, or a host of other topics.

National Instruments –  which John describes as “the Home Depot for engineers” – produces tools that engineers use to develop and test products. Like Wells, customer engagement with end users is going very well.  Unlike Wells, NI needs to help their salesforce, who are all degreed engineers, to have higher-valued, business-level discussion. NI sees community tools and technology as a way to help resolve this.

John says NI executives, marketing, product managers, etc. spend a lot of time with their key customers. For example, an NI team just spent 2 days onsite with Harris learning how Harris uses their tools to reduce cycle  and test time.  Adoption is critical – once engineers move onto the NI platform, they don’t move off. So references — and demonstrating a vibrant community of like-minded engineers to new prospects —  is key to getting them to become customers in the first place. Customer references and case studies help to build that community identity and following. 

Hitachi Data Systems sells storage solutions to large enterprises, deals topping hundreds of thousands of dollars on average. Asim is accelerating their customer engagement activities to learn about – and adapt to — what customers face in this changing economy. HDS customer advisory boards are high-touch, but now HDS needs to move this activity down stream and engage the midmarket. They are working with TechValidate to see how automation can help them to reach into the midmarket further.

So far, HDS has created about ½ a dozen communities on LinkedIn and is currently montioring how prospects and customers use this social network to share successes and horror stories on a community-by-community basis. Community members know HDS sponsors the LinkedIn groups, but HDS actsl simply as an observer and moderator; they do not actively “participate” on these community pages. Currently, the LinkedIn experiment is not connected to customer reference activity.  Beyond this, HDS hosts gated, online communities. Keys to success with these private communities are: 1) Give the participants something of value that they can’t get elsewhere, 2) keep participation volume high– get more than 2-3 folks talking, and 3) make the feedback mechanism direct to HDS short and uncomplicated. HDS finds good customer references actively come from this community.

What do you do about customers/prospects who complain or make disparaging comments in communities?

Jeff talked about how the principles of good customer support/relationship building applies in the online world just as well as the offline.  You have to talk to the people with complaints or gripes; you can’t ignore them.  Don’t defend, but don’t justify either.  Jeff says, “If we are wrong, we admit it. We respond within 24 hours.” At first Wells’ legal department put together 7 pages of guidelines about how to interact in the community – but the executive sponsor stepped in and said “I want simple terms and conditions; we don’t want to stifle dialog”.

John says NI welcomes disparaging comments. Many times a customer, not an NI employee, jumps in to respond.  NI has changed a policy – or said why they can’t – when the customers bring up issues on the community. We regularly survey our customers on satisfaction, which is the final scoreboard for this activity.  John said, “The community provides one avenue of input to our strategy and direction, but we don’t knee-jerk react to all of it.”

Asim advises “don’t get into arguments with them.” Listen, address the issue, admit mistakes when you make them, and let other customers chime in.

How do you concisely explain the ROI of this activity to your executives and board? Especially when putting forth a budget?

Asim explained that justification is not that big a problem at HDS because HDS executives on down all agree they need and want to talk to customers. Customers are HDS’s biggest asset and customer engagment programs help them grow this investment.  But they do look at both hard-dollar and soft-impacts. For example, when some customers had trouble traveling to executive briefing centers to spend time with HDS engineers and execs, HDS looked at the numbers and found they could afford to take the program on the road.  Visiting a dozen cities for in-depth customer meetings is not cheap, but HDS track deal flow and revenue impacted by these events and has seen a very positive impact.  So much so that they plan to expand the executive briefing center roadshow to more cities in 2010.

Jeff said that Wells definitely increased its level of investment and involvement in customer engagement in 2009. To demonstrate the payoff, they highlight the role customers play in the development of products and how much customer interaction help them reduce time to market for new products. Customers cut the guesswork out of the development process.

Following this panel, Bill Lee hosted a “fireside chat” with Dan Crain, former CTO, Brocade and Tim Thorsteinson, Harris Broadcasting, on the topic of “What do Decision Makers Want from the B2B Relationship?”

Bottomline: Decision makers want trustworthy relationships and relevant discussion about industry topics.  They don’t want to engage in customer programs that are product or transactional in focus.

Dan Crain has bought a lot of IT equipment in his career, and gets invited to customer programs all the time. If sales sponsors them, he’s not interested. If the program is run by product marketing or the technical people, he finds much more value.  The most attractive programs center on discussion around industry-level issues.

Regarding social activity
Dan: “Social media is not good for putting out managed information or messages about your company. It’s more about getting closer to customers.”  Communities are not a new thing: the techn industry has had bulletin boards and forums for a long time.  They are a great way for users to interact, although it is debateable whether the new host of social software tools really enhances this.  Microsoft is a great example of how to use forums to interact with users well. In contrast, Dell putting out coupon codes for refurbished equipment on Twitter is not about getting closer to customers. But listening to customer suggestions and request on Dell IdeaStorm is.

Tim said Harris has used social media to automate getting feedback on products or specific ideas.  He feels it social media is better used for automating a focus group than blasting out messages to the community on social channels.

Tim and Dan agree: Buyers who select a vendor to work with want that vendor to be successful. So executives and decision makers will take time to provide references or to participate in customer advisory.

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Live From Summit On Customer Engagement 2009

October 20, 2009 — Laura Ramos

Today and tomorrow the Customer Strategy Group is hosting its inaugural summit on customer engagement – an intimate, executive conference designed for B2B marketers who manage customer reference programs, advisory boards, and the emerging area of online communities.  I will speak later today to about 70 t0 80 marketers and sponsors about “Understanding the Value of Customer Engagement”

Business marketers know customers who give references, participate on advisory boards, and engage in online communities are more valuable than those who are bystanders. But how do you quantify this value and socialize it to the rest of the business – especially in a tight economy when all the focus is on revenue and pipeline?  This forum takes a close look at this question.  In my presentation, I will introduce a model for measuring customer engagement that includes four components: involvement, interaction, intimacy, and influence. Each component requires data collected from online and offline sources that — when done successfully — give marketers a more holistic appreciation of their customers’ actions while recognizing that value comes not just from transactions but also from actions customers take to influence others. I show how marketing messages become conversations, and dollars shift from media buying to customer understanding, when firms adopt engagement metrics to capture the value of customer relationships

Here are the highlights from the morning keynote sessions I attended:

1)       Sean Geehan, who helps B2B executives understand what it takes to drive revenue, growth, and shareholder value. In his work on customer engagement, he has shown that companies that target their customer programs at their “top 20%” customers outperform the market by several factors.  He profiles companies like Harris Corporation, HCL, and Oracle in his upcoming book to demonstrate this.   He sees firms that specifically target decision makers in customer engagement programs (versus end users or middle management) see retention rates of 90% (vs. 72%) and account growth of 12% (vs. 4%).  Most importantly their reference rates are 94% vs 28% — underlining the vital importance of creating customer engagement at the executive level, not simply among worker bees.  I think this has BIG implications for community development in B2B.

2)  Tim Thorsteinson, President, Broadcast Communications Division, Harris Corporation talked about the benefits of customers engagement in face of the seismic shift in the broadcasting market from conventional, US-based TV stations to cable, satellite, government, international and sports. His division sells video equipment in all these markets and 50% of their revenue now comes from products introduced in last 24 months. (They spend about $90M on R&D). Approximately 10% of customers generate 90% of revenue. His main point is that Harris could not have made this shift successfully without creating an executive advisory board – focused on this 10% — to draw insight from and validate their decisions. And these customers deliver value: EAB members drove 16% of Harris Broadcast revenue in 2009.

Observations: He enjoys fairly exclusive access to his dozen or so EAB members since Harris’ competitors don’t actively pursue customer advisory boards. He says face-to-face, intimate, offsite meetings with deep content – but that also feature a fun, inviting locations or activities — is very important to keeping these relationships strong.  No stand-ins allowed; members can’t send substitutes to the meetings. In between Harris uses quarterly conference calls and newsletters to stay in touch. Content includes technical issues, industry trends, but is not salesy.  He knows the EAB is successful because networking happens outside – and Tim believes this would continue without Harris’s sponsorship. EAB members talk about how to make their sector more attractive to Wall Street.  They also want a seat at the table with other industry leaders, where relevant dialog can happen, and where they can talk about the real business problems they face (not technology/ products.) 

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The Role of Social Media in Creating Customer Engagement

September 29, 2009 — Laura Ramos

Customer reference programs, advisory boards, and customer councils are vital activities in B2B marketing. But these activities risk sliding into second-class status among executives if marketers fixate too much on numbers and not enough on creating community involvement among these highly-engaged customers.

Are you interested in new ways to increase the value of customer programs in the eyes of your buyers and improve the status of these important programs with your management team? If so, I’d welcome you to participate in a new study (which closes this Friday!!)

Together with the Customer Strategy Group and ITSMA, I’m conducting a survey on Forrester’s behalf about customer engagement programs and the impact these programs have on your firm’s success. This survey asks questions about customer reference programs, advisory boards, customer councils, and online communities or social networks sponsored by your company or organization (things like private forums, customer groups, or fan pages on social networks such as Facebook and LinkedIn).

We plan to share highlights from this research during the Fall 2009 Summit on Customer Engagement, October 20-21, 2009 in Boston, MA. I hope you will consider attending, especially if you are local to the area. After the conference, I plan to write Forrester research on this topic and blog about the results as well.

The survey should take you between 10 and 20 minutes to complete, depending how many activities you participate in for your firm. In total there are 65 questions, but you may not need to answer all of them. We will keep all responses confidential and report results in the aggregate only.

But remember: the survey CLOSES THIS FRIDAY, October 2, 2009.

So take a few minutes today to participate!  Or forward the link to someone you know who holds responsibility for one of these areas.

I look forward to seeing your responses or to hearing from you what you would like to discover, discuss, or learn about customer engagement programs and the role social media does, or could, play in building more vital, long-lasting relationships.  Drop me a comment if you feel strongly on these topics.  And, on behalf of CSg and ITSMA, thank you for sharing your experiences and helping us out.

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Why Customer Engagement Is Critical

September 21, 2009 — Laura Ramos

Making your customer reference program, advisory boards, customer councils, and communities relevant to C-level management means you need to speak their language and help them pursue their objectives. Not yours.

Taken individually, a reference or communities program may not show up on your firm’s executive radar. But as crucial aspects of “customer engagement,” these programs — and the intimate customer interactions they produce — are critical to senior management.

Recently I had the pleasure of joining Bill Lee, President of the Customer Strategy Group, Asim Zaheer, VP Product Marketing for Hitachi Data Systems, and Sean Geehan of the Geehan Group for a roundtable discussion on the role these programs play in engaging your current customers. You can find the interview and roundtable discussion on Blog Talk Radio. 

I think you’ll find the discussion lively as we talked about how to measure the effectiveness of engagement programs, how specific programs like references tie into broader corporate goals, why integrating with other marketing programs is critical, and tips on how to do so.  Prior to the recording, Bill sent me a few specific questions to answer. I jotted down my responses and — while the radio show took some interesting twists and turns as questions blended into discussion — I thought I would share my thoughts with you through this blog post.  Enjoy the questions and the answers I prepared:

Q. Forrester is taking a substantial interest in this area of marketing: customer engagement. Why so? Why now?

We are really excited about researching customer engagement for three reasons–

1) The Groundswell: We see a major shift of power in the vendor-buyer relationship from seller to the buyer. We see buyers turning to each other increasingly, and to social sources of information, to inform their business purchase decisions. Marketers need a way to not only tap into that activity and learn from it, but they also need a way of figuring out who are the new influencers, and ways to measure the value that comes from these social interactions. Engagement helps do that.

2) We think that business marketing – particularly in high technology — has gone astray. We marketers tend to worry more about marketing mix and execution than what happens to customers after the deal closes. But because studies show that it costs 1/6th to 1/10th as much to retain an existing customer than to acquire a new one, we think that this myopic focus on the front of the pipeline is upside down. Focusing on how to increase and strengthen customer engagement helps turn things around.

3) Classic marketing metrics don’t capture all the value of ongoing customer relationships. Sometimes customers who, relative to others, don’t buy a lot from you are incredibly valuable because of the way they influence others, advocate on behalf of your company, and support the broader customer community.  Looking at engagement helps to capture this value in a meaningful way.
Q. We’re seeing a major shift in the ability of customers to get information directly from each other – without going through vendors. Is this the most important development in this area to you? How is that going to impact B2B businesses?

Agreed, we see this same shift. We use the term Groundswell to refer to that shift and it’s as big a shift – if not bigger — as the one we saw with the early stages of the Internet.

Profound impact on B2B businesses, but not in the way we see today.  From a B2B marketing perspective, the majority of the activity around these social interactions today is still one-way.  Marketers experiment with social media but treat it like old media – another way to get their message out in front of an audience. The novelty of social activities – like Facebook fan pages, Linkedin groups, Twitter and YouTube – create a lot of interest here today, but marketers – and executives — are beginning to question the return on this activity.

We believe that the real impact of this shift in customer behavior will happen – not at the front of the marketing funnel, where it is concentrated today, BUT at the opposite end. Social activity will allow customers to band together into communities of interest to not only solve problems and find more creative ways to use products and services, but to provide direction and innovation to the firms who supply those products and services.  Smart marketers will work now to tap into this social behavior, engage customers’ participation, and encourage customers to advocate – openly and transparently – on their behalf to the community.

Q. How do you measure the success of your customer engagement efforts, with these new realities?

This is a problem most B2B marketers struggle with right now, and I can’t say that we’ve cracked the case.  To help, however, Forrester introduced a model for measuring engagement that we call “the Four I’s.” We see engagement defined as the deep connection a company creates with its customers that drives purchase decisions, interaction, and participation over time. It’s measured by the level of involvement, interaction, intimacy, and influence with the brand over time. 

Q. How will customer reference programs adapt to the new realities?

I think the scope of customer reference programs will increase from meeting tactical goals – like percentage of customer base that is referenceable – and service levels with sales TO providing direct and tangible value to the customers who choose to give references. Right now a lot of customer reference participation is driven by good will. I think customer reference programs need to give back more value than recognition and appreciation without sacrificing social currency — things like trust and credibility — that make for good references. This is where the social groundswell and community building come in.

While I don’t think customer reference managers will lead the charge into social media, they must participate because their perspective – “here are our most valuable customer advocates and what can we give back to them?” is so important to shifting the focus in marketing from campaigns and leads to ongoing customer relationships.

Q. What are your thoughts on the ability of firms to meaningfully engage with senior level decision making customers?

I think many firms over-estimate their ability to engage with and sell to the C-level suite. Just by putting marketing materials together that say we are going to be more engaged at the strategic level doesn’t make it a reality.

It reminds me of this quote I use to kick off the conversation I often have with Forrester clients about the value of  product positioning. It is part of Forrester lore and reportedly said by a frustrated CIO to a very large software vendor at that vendor’s customer summit.  He said:

“If you call yourself a ‘Strategic Business Partner’ one more time, I’m going to throw you out of your own building. You are not a strategic partner to my business just because your marketing department gave you slides that say you are. You are a vendor, selling us technology, and until you tell me exactly what business value you bring to my business, that’s all you’ll ever be to us.”

It’s a harsh statement, but I think it brings into sharp focus the problems that happen when marketing focuses too much on message, communication, and channel and loses touch with what customers really value – which is a problem-solving relationship that has commercial benefit to both parties.

Engaging with senior level decision makers takes time and skill to develop. You don’t send your sales rep straight in with a marriage proposal, you have to date – woo them with the equivalent of candlelight dinners.  In real terms, that means giving senior decision makers – and their influencers and information collectors – relevant, timely reasons to engage with you. It means useful, usable information and experiences that satisfy their needs, motivations or aspirations. And the degree to which you can foster this kind of relationship with customers on THEIR terms, not on yours, will mean the difference between success and failure at engaging at the senior level.

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