Author Archives: Scott Hornstein

Finding Your Compelling Competitive Differentiation in B2Btest

What is it that really distinguishes you, that separates you from the bunch, that makes your prospects sit up and take notice, and your competitors sit down in despair?

Let’s talk about your competitive differentiator

If it’s price, you’ve got a big problem, because cornflakes compete on the basis of price. It means that you win if you are the lowest cost provider, and are faced with unrelenting pressure to reduce your price further, so let’s put this aside.

Is it your product? Honestly, no one cares about your product. There are a gazillion out there that look and do exactly what yours does, and come in different colors. Customers only care about what your product, and you, can do for them, the benefits of a relationship with you.

The bottom line answer is – it’s you. It’s personal. Let me explain.

Now, let’s really talk about your competitive differentiator

To focus the conversation, please spend a moment with this great chart: “The B2B Elements of Value Pyramid” by Bain & Company. This chart, and it’s importance to B2B marketing, was featured recently in the HBR article “The B2B Elements of Value”, and referenced in Katie Martell’s excellent blog.

We should be talking about value, as your customer defines value

The most objective kinds of value are found at the base, and the higher a level is, the more subjective and personal the types of value encompassed.

Without going too far down a rabbit hole, this pyramid is based on the hierarchy of needs that the psychologist Abraham Maslow described. Maslow argued that human actions are motivated by an innate desire to fulfill needs ranging from the very basic (security, warmth, food, and rest) to the complex (self-esteem and altruism).

We would argue that these values and insights can be extended to people in corporate roles to help us better understand their motivations for buying and using our business products and services. The lower the level, the more we are commoditized, the higher the level, the more defining, which is the substance of competitive differentiation.

As the B2B marketplace becomes more crowded and homogenized (every website looks exactly the same and says the same things: does more, faster, cost-efficient), it becomes harder to distinguish ourselves. If we can’t effectively introduce a rationale for seeing us in a different, more discerning light, we will compete on the basis of price, like cornflakes.

 

Product marketing must become disruptively human

The point here is that marketing must become disruptively human and understand the full range of rational and emotional variables as the customer sees and describes them. Marketing must take the lead in forging messaging and communications based in that understanding, and embue it in their company’s culture.

If we can capture the rational values (such as reducing anxiety or enhancing the buyer’s reputation) and engage with the customer on inspirational values and purpose, the more compelling is our message and the greater our competitive advantage.

3 steps to marketing becoming disruptively human

1. Conduct independent, external qualitative research.
The most important input comes from creating a persona or archetype of the buyer, replete with how they describe their challenges and the journey they take to their desired solutions. Product Marketing’s messages must address the intersection of each buyer’s corporate responsibility and personal ambition.

In these structured conversations we can probe the ways we can own the lower level values and engage with them on the higher level.

In conducting this research for our clients, we are always amazed at the impact of what we learn. Our clients have learned:

– The composition of the buying team, each individuals’ information needs, and the checkpoints on the consideration journey
– Why the existing tagline contradicted buyers’ inspirational values and purpose

2. Create “connected content”.

That’s what we call the creative process that yields messaging and content rooted in the insights generated from the qualitative research, quantitative analysis, and sales input. To be truly incisive, often we test the concepts and executions through the qualitative persona research process before we go to market.

Connected content is inclusive.
Because the input and insights come from Sales, Marketing, Research, and Data Analytics, every member of your organization is vested in making connected content the best it can be.

3. Stay agile

These steps are designed to produce both immediate and ongoing insights and executions. It’s up to you to listen, learn, and take action.

Rule #1: The marketplace is always changing
Rule #2: If you aren’t changing your competitive differentiator is toast.

Here’s a good example of things done right: In a persona research interview I asked an executive, what is the single most important benefit of doing business with (the company sponsoring the research)? The reply: Management. They understand what we are trying to do, where we are trying to go.

Why You Should Not Charge For Customer Trainingtest

Why? Because it makes good business sense, especially if you are a SaaS company. Let me explain.

Many of these companies take a short-term view and want, or say they need, to emphasize revenue on a quarter-by-quarter basis. Their view is that training costs money, customers, especially new customers, need the training, therefore we mark it up and charge. Let the longer term take care of itself. If customers need training later on, it’s a new profit opportunity.

Other companies take a longer-term view and want to maximize their growth and return over time. These companies do not charge for training and view it as an investment in their customer base. This investment produces customers that gain more value from their product now, and over time, and pay the company back in loyalty and longevity.

The Power of Training

Training may be the single greatest lever to ensuring your customers’ success, satisfaction and profitability. Training’s metrics of success, as shown in the infographic below, are compelling. A 15% improvement in renewal rate is huge when you operate on a subscription model.With that increase in renewals, profit increases in staggering amounts.
Infographic – ROI of Customer Training
Charging for training creates a bump in the road, which makes your customer slow down and bounce around. If training is a budget hit, do I, as a new customer, resent it or take it in stride? What about a 10-year customer? Do I send everybody or do I just send our super-users and have them train the staff? Do we need the training and the upgrade now, or can we just exist with the previous release for a while?

Either way, this translates into less training for your customers, which also means they will use the product less, need more help desk support, renew less often and your profit will inevitably shrink.

Leveraging Customer Lifetime Value

Easy to nod your head with these considerations, but the question begs, why can’t we also add to this quarter’s profits? Training costs us money now.

What we need is a discussion of customer lifetime value (CLV). Embracing CLV shifts marketing from the transactional customer business view to the long-term relationship marketing approach.

Simply, CLV is the amount of revenue (and profit) you can expect from each customer over their relationship with you. There are 3 variables.

1. Revenue – how much do they spend.
2. Time – how long do they stay an active customer.
3. The third variable, the one that you can influence, and that influences the other 2, is customer success. To stick with simplicity, successful customers buy more and stay longer. They’re also the ones that generate referrals.

Revenue from long-term customers is more profitable, because the high cost of acquisition has been amortized. The training fuels the value they receive and drives demand. Research shows that training increases customer longevity.

The cost of developing and administering the training is like fertilizing a garden. Effort is required. How would you like your garden to grow?

Creating a Competitive Edge

Looking over the SaaS industry, it seems that old market giants like Oracle and Microsoft charge for training, largely because they can. They may feel that they are so embedded that customers will be theirs for perpetuity. They also tend to outsource training to third parties that have to generate a profit from training.

Which is why an investment in training can be an important competitive edge for the next in line, the contenders. You view your customers as resources to be grown. They view customers as “share of wallet”.

From a Profit Center to a Customer Success Center
There is one other benefit that companies who take the long view and do not charge for training reap. That is innovation – the drive to keep your training sharp, in line with your latest advances, and geared to your customers’ success. As your organization adopts and practices this innovation, it has a spillover effect, pushing your organization to rethink how they add value to the customer relationship overall.

Don’t Be Penny Wise and Pound Foolish
There is a great British saying, “penny wise, pound foolish.” It means, making decisions with small amounts of money (pennies) that end up making bad sense for affecting larger amounts of money (pounds, as in Great British Pounds). And that’s the difference between charging for training now versus investing in your customers’, and your long-term success.

Investing in training enables your customer to use your product more deeply, to more closely align their methods and processes to you, and ultimately attribute some portion of their success to you.

Unfortunately, even in a world where it costs 5 to 25 times more to acquire a new customer than it does to keep current customers, many companies perpetuate short-term, transaction thinking. These companies continue to invest nearly 80% of their budgets on customer acquisition. Just 42% of businesses are currently even able to measure customer lifetime value, let alone accurately. (What Most Companies Miss About Customer Lifetime Value by Michael Schrage, HBR)

This is a real business opportunity, a commitment that will benefit your company now and in the future. Remember, making customers better makes better customers.

What’s Your Competitive Differentiation?test

As you look at the marketplace, what really distinguishes you from the rest of the bunch.

If it’s price, you’ve got a big problem, because cornflakes compete on the basis of price. It means that you win if you are the lowest cost provider, and are faced with unrelenting pressure to reduce your price further, so let’s put this aside.

Is it your product? Honestly, no one cares about your product. There are a gazillion out there that look and do exactly what yours does, and come in different colors. Customers only care about what your product, and you, can do for them, the benefits of a relationship with you.

The bottom line answer is – it’s you. How you see the market, your insights and experience, how you understand and articulate problems and solutions, what you are willing to share with prospects and customers.

You can do speeches and videos and meet and greets, but you’ll get the widest reach from an ongoing blog. It gives you the opportunity to find your voice, to impart your experience and expertise, to tell the world what your customers have achieved.

It’s where we can help. Writing professionals who can help you to put yourself out there, consistently, and hone your compelling competitive differentiation.

If Product Marketing is Marketing Product, It’s Doing It Wrongtest

A central problem for Product Marketing is the indisputable fact that no one cares about your product.

Prospects and customers only care about what your product does for them, about what value a relationship with your company brings. This can be a difficult concept for Product Marketing to get their arms around because in many ways they are completely insulated and have absolutely no interaction with the people inhabiting the marketplace. They don’t shake their hands, look into their eyes, or listen to their voice.

Thus, may of their plans and promotions revolve around the following seeming benefits:

• Saves time
• Is faster
• Does more, better
• Greater ROI

These are not benefits — they are topic headings. They are generic and moveable, and apply equally to any and all B2B sales efforts.

However, Product Marketing has the opportunity to take this general direction and develop messages that communicate value and competitive differentiation.

Klaatu Barada Nikto

Like the characters in The Day The Earth Stood Still, B2B buyers are in their own world and speak their own language (and we don’t have Patricia Neal to bail us out). It’s called “corporate culture” and each one is unique and insular.

On top of that, they are each humans, with their own set of professional and personal concerns. Their receptivity to our message varies with our ability to tell the story in their language.

Becoming Disruptively Human

Fluency in this idiosyncratic language depends on Product Marketing becoming disruptively human. In our experience, this requires three steps:
1. Learn from your stakeholder groups. Product Marketing must be the bridge between sales, marketing, and engineering teams inside your company and the buying center of your external customer organizations. Despite long-standing distrust, it’s necessary to plumb the depths of new and existing sales relationships (and that includes going on sales calls), because the sales people speak the language all day long.
The most important input comes from unbiased qualitative research, which creates a persona or archetype of the buyer, replete with how they describe their challenges and the journey they take to their desired solutions. Product Marketing’s messages must address the intersection of each buyer’s corporate responsibility and personal ambition.

In conducting this research for our clients, we are always amazed at the impact of what we learn. Our clients have learned:

– The composition of the buying team, each individuals’ information needs, and the checkpoints on the consideration journey
– Why the existing tagline gave prospects reason to NOT believe
– How to easily customize the product to dramatically increase market share

2. Build out a 360º perspective by combining these in-depth buyer insights with sophisticated analytics on your prospect and customer data footprints to understand what they have done and what they are likely to do.

For example, we use our analytics capabilities to identify segments of buyers that you can better address in targeted ways. Similarly, we can identify and examine what characterizes and motivates your most valuable customers so you can focus on them.

3. Create “connected content”. That’s what we call the creative process that yields messaging and content rooted in the insights generated from steps 1 and 2. To be truly incisive, often we test the concepts and executions through the qualitative persona research process before we go to market.

More than speaking in the buyer’s language and addressing, head-on, the issues that concern them most, connected content is inclusive.
Because the input and insights come from Sales, Marketing, Research, and Data Analytics, every member of your organization is vested in making connected content the best it can be.

Introducing The Complete Product Marketer

Product Marketing is indisputably the product maven – it’s what you know and what you do better than anyone. This three-step process helps you to build on your strengths and connect them to your buyers so you can focus on the messages that are most important to them.

This is the journey that Product Marketing must take to become disruptively human. Then, you walk the walk and talk the talk, in their language, directly to the people who are your buyers, about the full value you bring. Reap the results.

An Edge in ABM for both Marketing and Salestest

When we are focused on one company, on one set of executives, I’ll take every advantage I can get. This time, the edge is coming from a different discipline.

I’d like to suggest a new way of understanding and customizing communications, which has the potential to make every interaction, from content to a sales call, more specific and effective. This insight can bring us measurably closer to the way customers and prospects listen, process information, and learn.

My colleague, Dave Kaiser, principal of H2H Dynamics, is a former Chief Learning Officer, former Naval Aviator, and has been in the human performance field for over 25 years. He also led a three-year research study for the US Air Force to improve human performance even further.

This has led him to some unique insights.

How people experience the world, process information, and learn.

Marketing seeks to educate and influence. Sales’ is to build trust and rapport. I think we can all do a better job. Here’s how:

The insight that Dave will share is basically that the ways people learn differ significantly, and by easily identifiable groups, Thus, if communications are aligned with executives’ learning preferences, each will gain a extra level of effectiveness.

The corollary is, of course, that current marketing and sales efforts may be underachieving by making it more difficult for some executives to listen and learn.

What is really powerful is that these are skills we can learn to be able to decode human behavior “on the fly” just by observing their language behaviors “second by second”. This will allow us the ability to accurately identify those segments.

Dave, please provide the background.

A famous researcher named Dr. Taibi Kahler, a Behavioral Psychologist, discovered that there are six distinct and unique human “Perceptions” that filter how each of us view and interpret the world around us. What he discovered was so profound and validated that he was the recipient of the Eric Berne Memorial Scientific Award for the most scientific discovery in his field of psychology.

NASA’s lead psychiatrist for manned space flight used Dr. Kahler’s communication process in the selection and training of the space shuttle astronauts. Since then it has been used very effectively by a past U.S. President, Fortune 500 CEOs, and even by Pixar Studios for both their leadership and their development of their animated character personas that both children and adults easily connect with.

Dr. Kahler discovered that everyone views and processes the world around them in at least six different ways – each called a Perceptions;
1. Thoughts
2. Emotions
3. Opinions
4. Inactions (reflections)
5. Actions
6. Reactions (likes and dislikes)

“Each of us has a primary Perception or preference as to
how speak, listen and learn.
A person is either born with this base Perception or
developed it very early life (before six months of age),
and it remains with them their entire life.”

Here’s where I see the potential for ABM:

Early in our go-to-market process, we create new Prospect Personas to better understand significant segments of our target market. Going forward, let’s add two things. During the “voice of customer” research interview, let’s also listen for how people express themselves – the words they use.

In analysis, we discover that a particular customer is consistently using phrases such as, “I think…”, “What options…”, “Does that mean…”, Who…”, “What…”, “When…”, “Where…”, “…facts”, “…information”, “data”, “time frames”, etc.?

This indicates that this person’s primary Perception is that of Thoughts. They value facts and the way they process and learn is by identifying and categorizing people and things. They prize data and information. Logic is their way to get through life.

With this information you can craft your messaging and interaction so that that it “connects’ through their Perception of Thoughts. To make a significant communication connection, give this persona the information that they crave such as;
• Logic
• Facts
• Data

These individuals love to take in facts and ideas and synthesize them. Give them a chance to digest the information. They also value time. Give them the space they need, and do not take more of their time than necessary.

Many high achievers may have the Perception of Thoughts.

Not everyone has the Perception of Thoughts – it represents only 25% of the North American population. However, they are internally motivated and therefore are typically high achievers. Being internally motivated typically means they are likely to rise to the rank of a decision maker.

A cautionary note.

The corollary of this process is that we each tend to communicate in our own, favored Perception, which can mean that we are consistently mis-communicating with a majority of our audience, generating content which, to an extent, does not speak their language, and from which they cannot easily learn.

Breakthrough?

This is new and heady stuff, but it can easily be incorporated. Just as those with the Perception of Thoughts are likely to become decision makers, we may learn exactly which type of content, information, and messaging they need and when in the consideration journey. Influencers are likely to have other Perceptions and require different content, information, and messaging at other points in the journey.

What B2B Marketers Need to Reach Millennialstest

When asked what will impact marketing the most in 2018, “73% of marketers think it’s artificial intelligence or a technology dependent on AI.” That’s the conclusion of a recent survey of 350 marketers, CEOs and influencers published by Mobile Marketer.

Put some PI in your AI

While I certainly agree that AI holds superior promise if you are marketing a B2C commodity, I think marketers need both AI and PI (prospect intelligence) when it comes to B2B marketing of high-consideration products and services. Here, the advantage lies with real insight into and empathy with the people who inhabit our classifications of prospect and customer.

Especially if they are Millennials, which may seem counter-intuitive. Given their immersion in technology, a technological solution seems like a no-brainer. I think that to be truly effective, we’ve got to start with the person.

Let me provide some context.

Reference the Cohort

The Pew Research Center offers a cohort perspective. At a high level, they counsel that studying the needs and preferences of a cohort, or generation of individuals, seeing how they change over time, and comparing them to other cohorts, provides a deeper understanding of the individuals within the cohort.

The implication for us is that by including cohort, or generation, into our persona and marketing process, we are better able to empathize with, and communicate with our prospect.

“An individual’s age is one of the most common predictors of differences in attitudes and behaviors.” And, I would add, a key to how they learn, what sources they trust, and how they communicate with colleagues and other members of the buying center.

Pew includes 5 cohorts, but for B2B marketing let’s narrow this down to 3 as these are the most likely to be participants in the buying center. In 2018:

• Boomers are 54 – 72
• Gen Xers are 38 – 53
• Millennials are 22 – 37

Some of Pew’s insights are edifying to us as marketers regarding our formation of messages and the channels we may select. We will focus on the millennials here.

Millennials Are On The Cusp

Millennials are the up-and-comers, and because of their technological orientation are likely to be strong influencers now. Also because of their immersion in technology, they are hard to reach, crouching under cover of the digital, protecting their anonymity. They carefully decide whom they listen to. Interpersonal communication and social skills do not come easily.

Millennials see technology, tweeting, social media, etc., as part of every day life and the mobile device is their primary way of connecting. The implications of growing up in an “always on” technological environment are only now coming into focus. Research is showing dramatic shifts from previous cohorts, attitudes and lifestyles, both positive and concerning.

Many came of age, and entered the workforce, at the height of the economic recession, which continues to shape their worldview. Their life experience (added by me) includes companies turning away from the “paternal organization”and the rise of executive greed.

Other influential events in the lives of Millennials:

• Talk shows / reality TV
• Oklahoma City bombing
• Busy planned lives
• School shootings
• Desert Storm
• Google

According to the U.S. Census Bureau:

• Millennials are on the cusp of surpassing Boomers as the nation’s largest living adult generation.

• Women comprise a much greater share of the career-minded Millennial workforce.

The Bottom Line is Maximizing the Impact of Your Marketing

Said differently, will a marketing campaign based on AI, A/B testing or the like outperform the baseline? Absolutely.

But to get there, we have to throw out some messaging, over some channels that turns out to be ineffective. Will understanding the people first generate better results? Absolutely. Relying on someone else’s research is a start, but conducting your own prospect persona research is much more effective.

As my good friend Stuart Taylor, SVP of Nielsen, has said (and as I repeatedly come back to), “B2B is a personal sell. Always has been.”

The Big Picture – Use Care With That Databasetest

A data-dollar spent in assiduous customer retention can be well worth it.  If you want to identify one of the most powerful tools for assuring long-term customer satisfaction, you’ll find it in your database. It’s capable of driving the most efficient and effective investment of marketing resources. Unfortunately, the database often is used for short-term objectives. It is detached from any strategic initiative measured by customer satisfaction, retention, and lifetime value. If you don’t believe me, here are two solid illustrations of how trust and respect for the customer are manifested in a database. Or not.

Customers Come Firsttest

In his second “Smart Marketing” column for the respected print and online publication, Sales & Marketing Management, marketing consultant, lecturer and author Scott Hornstein cautions that successful marketing is based on customers’ wants and needs, as articulated by the customer.