The China syndrome

The early part of my career was concerned with new product development. As a product manager I conducted the whole process from initial concepts and market research, through design and development, into manufacture and eventually a product launch. Our b-2-b marketing clients today generally do not have a product development process. Either they are providing a service or marketing products where the design decision is taken remotely – typically in another country. As a consequence our marketing role has become far more focused on communications, so it came as something of a surprise when one client mentioned that the source of a top selling product was ceasing manufacture and supplies would soon be exhausted. Interestingly another client had rapidly withdrawn a product for a similar reason, in their case the basic component that made the thing work was no longer available. It caused me to stop and think. When was the last time we had included anything about new product development in a marketing plan for a client? Not because we forgot to ask, but because they had no plans. My thoughts soon strayed to another client inspired remark made to me about 6 or 7 years ago concerning a meeting in China. To his amazement he was shown products used for scientific purposes similar to those produced by his own company, which subject to testing (subsequently confirmed by independent laboratories as very accurate) appeared their equal. His USP was based on years of research, materials selection, manufacturing development, quality controls and skills of the work force. Volumes were not high so cost and price reflected this and such a device cost maybe $200 to manufacture. When asked for a price the Chinese contact seemed not to know the cost and suggested $3 would suffice. Why tell this story? Firstly it is not an isolated example, secondly the whole economics, new product development and marketing rationale were stood on their head. From a position of semi exclusivity, expertise and a ‘black art’ process that produced these devices, suddenly they were available to anyone at give away prices. Soon there were importers entering the market which still commanded a price premium, but what the importers could not offer was input into the application development. But here our client faced another problem. In order to get a product specified the company had traditionally worked with engineers working on a prototype so that when the product entered production their device would automatically be specified. But now buyers substitute the cheapest alternative, or production is offshore and sourced locally, so the development process rather than a marketing cost should really be a chargeable activity. It is possibly the only charge or sale the company will be able to make. Our client has yet to fully make this transition but a major rethink seems inevitable. When product development becomes product sourcing much is lost in the understanding of what the market needs. The other big issue to my mind is cost. As a product manager producing a product at a cost commensurate with a price that we judged the market would stand and achieve returns on investment and earn good gross margins was always a challenge. The low cost of Chinese products that does not truly reflect materials and other costs in the example my client cited cannot be sustainable in the long run. Already China is forcing up world commodity prices due to the sheer volume of world production whilst contributing to pollution on a heroic scale which prompts the question, is building a business on extremely low cost imports viable longer term. And what happens to that accumulated knowledge and black art if people like our client should completely opt out of manufacture?

Putting lipstick on a pig

The sub prime mortgage crisis seems to have been the catalyst for the huge losses recently incurred by banks, the first run on a British bank for a hundred and fifty years or so , collapse of a major US financial institution and the prospect of worse to come. How much of this I speculate is due to an inappropriate application of marketing techniques. I have long been dubious about the idea of promoting financial services as products, but this concept has also been accompanied by, or perhaps even led to, a major change in financial institutions transforming them into businesses that sell products like grocers. In fact the major grocery chains of supermarkets have got in on the act themselves in selling financial products. Although much of what people see of marketing is the advertising and other market communications, like the proverbial iceberg below the surface should be something substantial. We look first to understand the business model and test this before developing marketing plans for a client or prospect. Sometimes the business model is hard to define, or as in the case of one notable potential client back in the ‘dot com era’ – non-existent. Swept up in the enthusiasm of the time this ‘dot com king’ was busy buying other ailing dot coms for ridiculous amounts and raising funds on a stock market aided by investment banks that had collectively lost touch with the fundamentals of business. The financial institutions by transforming themselves into aggressive sales driven businesses abandoned financial prudence so devaluing the product. Banking staff steeped in a long understanding of finance have largely been replaced by sales staff, incentivised by selling products and often recruited from high street retailers. In fact banks actually talk about their retail business. Think for a moment about the marketing process starting with the product. In the traditional model a company would research the market or uncover an unsatisfied need, design or improve a product and add value to the manufacturing process transforming raw materials and components into a product to satisfy an identified or perceived marketing need. Now look at the sub prime business model. Loans made to people on welfare cheques in the American Budweiser belt at 5 or 6 times imagined income were the unpromising raw material that was diced and divided to emerge without any actual added value, as triple A quality investment products. The products backed by the credibility of a major financial institution then traded on global financial markets. What anyone selling goods could have told them is that quality control is also a critical ingredient – as one American colleague once remarked it is no good putting lipstick on a pig. You cannot successfully market an inferior product without some backlash. Of course a brand carefully nurtured over a couple of centuries like a major bank builds goodwill and trust – customers with scant knowledge of financial services believe in the products because of this trust. It is the credibility of the bank that is being leveraged and their professional advice. Bankers trade on their perceived professional status, customers accept their advice the same as they would from doctors or lawyers, in general they are not buying a product at all but simply following investment advice. But breach this implicit contract between buyer and seller and customers soon take their business elsewhere. What is amazing is that the financial institutions thought they could get away with such a devious scheme. Once lost trust is hard if not near impossible to rebuild. The marketing lesson is clear - the product, the business model and marketing message must be credible and sustainable to achieve long term success. Short term views cannot prevail in the long run. If banks had taken an imprudent approach to financial matters they would not have built up a solid reputation in the past.

Immediate post sales support

We hadn’t planned to buy new light fittings, or luminaires to give them their correct name, but a visit to a local DIY store of the type that we once called ‘sheds’ hastened a decision that we had apparently been contemplating for some months to upgrade lighting in the home. Beyond the humble lamp shade that most people can manage to install, anything requiring electrical connection presents a real challenge, one I was well aware of from previous experience. Domestic electrical installation it seems, remains largely unchanged since around the turn of the last century. Thomas Edison modelled his electrical distribution on the then standard gas system and today’s system would surely be recognisable to a time traveller from the 1870’s. While most electrical appliances are plug and play and the addition of the plug itself by the unskilled strongly discouraged as nowadays they are not made re-wirable, the typical domestic luminaire has to be connected - that is hard wired to the supply. Of course the packaging makes no reference to this and the display model is attached to a wooden panel. Fixing to a real ceiling is altogether a different matter. I try to look both interested in the choice of luminaire while surreptitiously sneaking a look at the ease, or otherwise of actually installing the purchase, but the packaging usually defeats this attempt. So having got the box home and overcome the not inconsiderable challenge of prising open the vacuum-sealed packaging the reality is revealed. The instruction leaflet carefully avoids showing the actual electrical interface and the collection of looped cables and switch runs to be found in the ceiling rose. A bracket is helpfully enclosed on non-standard fixing centres along with the suggestion to employ an electrician. Do the thousands buying light fittings over the counter really all employ electricians? I seem to recall that in Germany sockets for lights are just as standard as wall sockets for other appliances. In fact years ago when I was a product manager an inventor tried to sell our company a UK ceiling light socket, but it really needs both wiring accessory manufacturers and installers to introduce and of course house builders to specify. Meanwhile fiddling with brackets and wiring while perched up a ladder and holding the unit looks set to continue. Nobody seems prepared to make the quantum change needed in the market, but at least the information could be more practical. In industrial marketing the documentation available to ensure the product is specified is essential. Typically 20 per cent of project time is spent researching and specifying. A pity that hard to install consumer products don’t actually invest a bit more in both design and documentation.

Why do companies continue to exhibit themselves?

Driving away from the National Exhibition Centre in Birmingham after a brief visit to a relatively small exhibition with a focus on a niche sector of the industrial components market, I wondered as always, about the marketing value of exhibitions. Just why do companies expend so much resource on exhibitions? Will the web hasten their demise as it seems to be doing with print? Consider the show I attended – 130 exhibitors mostly with shell schemes in a single exhibition hall at the NEC. The visitors almost exclusively male, few younger than 40, in the main wearing well worn suits with ties – typically engineers and probably mostly from the west midlands. Most stands exhibited a seemingly identical collections of stainless steel widgets, unimaginatively presented and with the more adventurous using flat screen monitors running endless loops of amateurishly produced PowerPoint sequences. Engineering types, similarly attired to their visitors, hovered ready to pounce or simply waited sat at tables engrossed in their lap tops or using their mobile phones. Some stands were not even manned! Of course the exhibition organisers with their slick admission systems will claim yet another record year with more overseas visitors when they pitch to sell space for next year. My own observation is that many such exhibitions become a club and travelling circus for the exhibitors themselves. Thee opportunity to travel the country, even the world with a familiar crowd, who are actually competitors, incurring not only the exhibition costs but shipping, travel, accommodation and of course entertaining. A big dent in the marketing budget. So how many of these companies set objectives and measurable targets for an exhibition so the results can be evaluated? How many new customers do they attract and remember all the competitors will have seen them too? Of course there is the unspoken fear of not exhibiting – they will be more noticed by their absence and risk negative speculation by competitors and despite denials, exhibitors kind of like being on show.

B2B – a booming market

According to recent research the UK business-to-business marketing sector is worth a staggering £9.8 billion and booming. There are reckoned to be 176,000 marketing practitioners just working in B2B and a further 272,000 partly working in B2B marketing. So, on paper a big market for agencies to go after. What is not clear from the summary and headline figures is quite how the B2B sector is structured. On the face of it there should be some huge agencies just living on B2B clients, yet most big advertising agencies seem to focus on consumer marketing and anecdotal evidence suggests most B2B agencies are small, or one man operations. Then again the report says that ‘agencies are not seen as important’ that only 20% use agencies for strategic thinking, over a quarter do not use an agency at all and 50% of the marketing practitioners have no marketing qualifications. These figures tally better with our experience of B2B marketing. Yes companies are putting money into activities broadly classified as marketing, many try to do their own thing, few have any real strategy or a written marketing plan. So from the agency side it is quite likely a large part of the £9.8 billion does not go through them, so whether B2B specialist marketing agencies are booming is another matter, but probably not. Neither judging by the attention of media salesmen are traditional trade publications booming. Particularly in the industrial sector many journals seem to have stripped back staffing levels and are hanging on by the skin of their teeth while reluctantly, belatedly and half-heartedly looking towards the internet. The trouble with big numbers like billions is we never handle sums on money with that many zeros, or are even sure how many zeros there should be. According to Wikipedia it is 1,000,000,000 but the there is the short scale billion (a thousand million) or long scale (a million million – 1,000,000,000,000). So rounding figures up the UK B2B market is put at £10,000,000,000, the number of practitioners at 476,000 so that works out at about £21,000 per head not such an exciting number, or it could be £2 million of course - unlikely. That is another problem with big numbers, relating them to something meaningful. Our experience shows that knowing market sizes and market shares does not easily translate into useful marketing knowledge. At the end of the day the only knowledge is does the marketing investment contribute to improved profitability.

e-Mail - a rebirth?

Yesterday news arrived from Honda, by way of their hotmail account, that not only had my e-mail address been drawn to win a new car but I also stood to win several million pound in a further competition. Today I have been contacted by an attorney anxious to trace the beneficiary of a multi-million dollar legacy who has reason to believe I might be the rightful heir to this fortune. Then a K I Bakri asked for help from his death bed in distributing a fortune stashed in his diplomatic box to the under privileged of the world. Perhaps unaware of this rapid accumulation of wealth many more people have kindly sent me offers for fake watches, amazing medications that will enhance my life, share tips and cheap software. All this means frequently de-cluttering my e-mail in box and hoping I don’t inadvertently trash a message that is actually of importance to my business. Amongst all this lunacy there have been frequent reports placing e-mail back as the top Internet application and a powerful marketing tool. Arguably e-mail was the first Internet marketing tool and judging by a sense of weight of e-mail delivered marketing advice recently it has survived all the concerns of junk and spam to emerge reborn. Various communications and blogs seem to have almost rediscovered e-mail as a marketing tool. Of course we are also an advocate of e-mail and for some clients direct mail is just not affordable as the costs are per item – print, postage, envelope etc – compared to an e-mail set up cost largely independent of volume. Of course much has also been written about list building, opt-in subscribers, frequency of e-mails, subject lines and much more. Yes it works, but really as part of an integrated marketing programme where other communications methods are employed as well. But is it enjoying a new beginning? The jury is still out on that one.

PR v Bloggers – is there a clash of interests?

Until last week the whole world of Web 2.0, its technologies such as RSS and its phenomenon like social media seemed to be just a fast growing area of communication that had possible implications and benefits for the b-2-b world. Albeit some as yet, hard to define. Then on a PR newsgroup an old world debate on the merits of ‘paid for editorial’ was joined by the editor of an industrial journal who opened up the link to a blog where the UK PR industry stood accused of alienating one of the UK’s most prominent bloggers. But first lets take a step back to the world of industrial print. Many b-2-b titles, particularly in the industrial sector long ago ceased to offer truly independent news and typically exist to sell advertising space padded out with editorial content to at least maintain the impression of being a journal. The falling advertising revenues have had implications in terms of both staffing levels and editorial content. To the UK PR industry the staff appear to be few in number and mainly focussed on selling space, because for many journals every bit of space is sold or sponsored. Only today an e-mail arrived from the Managing Editor of an engineering journal to inform he was now handling both news and advertising for my clients, proof if any were needed that the old demarcations where journalism was independent of advertising has gone. Advertisers who see their money bank rolling the publication want to see their products favourably mentioned on editorial pages and the PR agencies they employ, after years of objection, generally now recognise the new reality that most of the news about their clients is dreary stuff and will only get published for payment. Originally disguised as a charge for a ‘colour separation’ fee, but more accurately an editorial charge, one can understand the cynicism and cause for frequent debates on the subject. The other side of this, is that as press releases are now sent by e-mail and no longer printed accompanied with a nice glossy photograph, it is easy to distribute them widely and this is where the prominent UK blogger got alienated – some one sent him a press release. In turn he used his blog to curse the PR industry and marketing in general and give rise to speculation that his well-connected peers would cause a huge backlash. His blog rambled on about the parasitic nature of PR people following a mention onPR Blogger in what got referred to as the ‘brothel’article thanks to a photo supporting his rant of a door sign reading – ‘This is not a brothel there are no prostitutes at this address’. They have since published a piece saying bloggers couldn’t care less about client’s products and should be left in peace and not sent spam PR. So there we have it – sensitive bloggers v spamming PR types who treat bloggers as prostitutes. Maybe the PR world has become hardened by the world of print publishing.

User generated content

There is much discussion of web 2.0 technologies, associated web site phenomenon and in particular user generated content. It raises all kinds of questions. Is content dumbing down? Who is accessing this content? Who has the time to produce it all? Is it giving rise to an alternative economy, does it make business sense … ? I could go on. Just today some major brands withdrew their advertising from a user generated content site because of concerns that their name appeared in juxtaposition to unsuitable content material. Maybe that is inevitable given the apparent chaotic, anarchic and irreverent content that some might choose to post. Then on the other hand there is the success of Wikipedia - amazing by any standards. The Internet certainly seems to be a fertile ground for overnight successes. Started in 1999 Wikipedia today claims 1.92 million articles in English, has 4.8 million registered users 1,200 volunteer editors who edit articles that anyone can submit and requests donations to keep it running. According to accounts on the site, donations were $1.3 million in 2006. What kind of business model is that? Recently we learn that an article by Harvard Business School has explored ‘issues of how online cultures are made and maintained, the power of self-policing organizations, the question of whether the service is drifting from its core principles, and whether a Wikipedia-like concept can work in a business setting.’ All amazing stuff and if it were not for the huge numbers of visitors to the most notable Web 2.0 sites would they be of business interest? It certainly marks a sea change, but will it impact b-2-b or is it all totally disconnected from the old world notion of business as selling products and services to make a profit?

The times they are a changing

We are all aware of the unrelenting pace of change but every now and again a few items of essential truth combine, or occur close enough together to cause a pause to take stock of the situation. In the last few days two such moments have given me cause for thought. A review of a new book – Austerity Britain 1945-1951 – and the trailers for Andrew Marr’s forthcoming BBC series on the history of modern Britain both promised to provide a benchmark of how much change there has been in my lifetime. Nostalgia placed in context. But the other thing was a line in a news magazine from my former university about the conversion of what in my time had been the students union building, into a presentation suite and study facility where students could work quietly in groups. The closing sentence read, ‘The area brings a change in the strategic direction of the union with a move away from alcoholic provision towards allowing students an area where they can study and relax in an unlicensed area.’ This clearly is a monumental change from the heady days of student politics that held sway there in the late 1960s, a time when several of today’s cabinet ministers were rebellious student activists. The union largely existed for the bar, it was the primary source of income. Of course through work for our clients we had been aware of the changing use of university and school spaces as science and engineering facilities converted to performance spaces, but the news that alcoholic provision was no longer either a viable or required need was indeed surprising. And that is the point really, how often do businesses really reappraise what their customers need or do. It is too easy to become comfortable with client relationships and assume everything stays the same – it doesn’t.

Return to the dot com boom?

Back in the heady days towards the end of the twentieth century there was a rush of blood to the heads of investment bankers to pour money into nascent web companies. Typified by young technology driven entrepreneurs with a vague proposition and people working long hours at computers, business principles were disregarded in a rush to get money invested in the latest young hopeful. The term ‘cash burn’ was coined to describe the consumption of the capital investment chiefly into people and advertising. Within a couple of years it all ended in tears. We launched our business Technical Marketing Ltd s in 1999 during this first internet frenzy, self funded, based on proven and prudent business models but embracing the internet technology. A new article today – Still waiting for the dot com revolution - suggests that the sector is maturing based on new and more stable technologies but still has a way to go to deliver a must have experience to users. All too often the content disappoints. From America we read much about Web 2.0, the so-called Social media and the boom in video sites. The Prime Minister even published his congratulations to the new French president on You Tube! Then on the other hand the market is fragmenting with specialists not just in building web sites, but in search engine optimization, usability testing, content management software, statistical analysis and quite possibly in interpreting the evolving terminology to baffled clients. Back in 1999 we were invited to pitch for an advertising campaign for one newly floated dot com company. The initial meeting took place in an apartment in Kensington trying to establish a brief while the busy entrepreneur dressed before dashing off to take a flight to Paris. ‘All you need to know is in the prospectus’ was the brief. It was impossible to figure out what this company did or identify any sort of business model let alone define target audiences and markets. They seemed to actually be buying other dot coms that were floundering and burning cash in the process. We declined the account. Shortly after the business folded. Today we are faced with a growing list of internet related technologies and specialists and may we need to step back and put the web site into context within a marketing plan. Experience in the b-2-b sector shows that for most of our clients the web site is a convenient resource to obtain specific or background information about a company they already know. Providing the site works and the information they need can be quickly found and accessed they are happy. Knowing your market and customers will be the best guide to determining what should be on the site rather than employing an expensive cluster of different specialists to find out what you already know.

PowerPoint in the firing line

Today’s Daily Telegraph carries an article reporting on research by professor John Swells of the University of New South Wales suggesting that presentations using the ubiquitous PowerPoint slide package cause audiences to lose attention and ‘switch off’. Apparently the brain cannot cope with the amount of information being received. Microsoft not surprisingly support PowerPoint as a powerful business tool. Personally I have made less use of slide presentations whether PowerPoint or Keynote as client meetings have now tended to become less formal and reverted to more of an old fashioned discussion, without the encumbrance of visual aids. A few years ago it was quite different. The arrival of video projectors and lap tops enabled slide shows to be quickly arranged and slides projected onto screens, or simply the office wall. But now the excitement over the then ‘new found’ ability to do this plus our trend to closer client involvement instead of ‘lecturing’ the client, it is not something I encounter so often. My criticism of PowerPoint was not the information overload or boredom factor, or even the time it took to create an acceptable presentation and the sheer intricacy of some presentations, but the use of slides as a substitute for a full report. Busy people would ask me to send them the PowerPoint presentation or to present a market research report in PowerPoint; not simply as a reminder of a more detailed presentation or report, but instead of a report. To me PowerPoint was more a descendant of the flip chart, itself simply a visual aid to help underscore key messages. Soon the key decision makers were only receiving bullet point briefings – the rationale and depth of analysis largely unseen. So the presentations changed from being an aide-memoire into a mini report that resulted in a huge file size. Recently we concluded some market research on behalf of another agency, extensively supported by charts and graphs and at the last minute was asked for a PowerPoint version as an alternative to a presentation and report for their client. There was no discussion on the findings and recommendations although the client was reported to have been delighted .. and no doubt on to the next project – or PowerPoint!

Footnote: the Google ads served to accompany the online version of the news story was for an agency specializing in guess what … PowerPoint. Right after an article totally decrying it. How weird is that?

Can sales people let a good marketing campaign down?

Like many people I prepare for the worst when telephoning a company for information. Jobs are so deskilled and compartmentalized there is little chance of getting a complete answer at the first attempt. Then my heart sinks further when I realize I have reached a menu. How many levels will there be? What data will I need to key in? Will there be a relevant option? How long will this take? And how much will it cost? Then increasingly with off shore call centres – will I understand what they say? So it is with considerable trepidation I call BT to progress an order. I had decided to take up their offer to upgrade my broadband account and had returned the order form in the envelope provided in the expectation of order confirmation within a week. Three weeks had now elapsed and no news. Oddly for a telecoms business there was no phone number on the letter, or address, or e-mail – just the web site. That did not yield a number either but it did offer an online option to check order progress. Unfortunately it failed to recognize my information. So after fifteen minutes to reach a dead end I used the sales number on the telephone bill and proceeded through the multi-level menu, entered my phone number and eventually got a ringing tone that somehow died leaving me hanging. I repeated the process and this time got to speak to someone, gave my telephone number, customer number, home address and mother’s maiden name. They concluded I did not exist and offered to transfer me to some other part of the BT empire. After repeating the same information to a succession of people, queuing, listening to Vivaldi, being told how busy they were, it appeared the phone was registered in my wife’s maiden name, even though the bill reflected her married name, slightly misspelled, but near enough to recognize, and this was undoubtably the problem. I was put through to a supervisor to get the name on the account changed and was congratulated on my marriage. I thanked her and pointed out this was in fact a few years ago and could we make the account Mr & Mrs? No that was a step too far, so I settled with it in my wife’s name, possibly correctly spelled. When I got to person number 5 I actually explained I was progressing an order taking up their offer to upgrade my broadband. So far there had been no trace of receipt of this order, but this very helpful lady decided that I was in fact with BT Yahoo, not BT broadband – by the way customers don’t care about internal organization - and offered to set up the phone call and introduce me to the right person. Nearly there then. But hold on, person number 6 opened the conversation by asking if he could help me with anything. I explained the nature of my enquiry which seemed not to strike a chord at all. You already have broadband he volunteered after asking how much I was paying – is there anything else I can help you with. So is there an upgrade deal or not I asked? Apparently not. End of call after 32 minutes – another dead end. Not a great customer experience.

Next morning I have an e-mail sent at 5 am and addressed to my wife, wrong spelling of course, to thank me for my order and confirm delivery date of the equipment.

Short attention span screen generation poised to enter work place?

According to an article from World Business, “Susan Greenfield, a professor of pharmacology at the University of Oxford, argues that the culture of the screen, where everything is visual and available at once, is shaping a different kind of reasoning. "The screen culture is not conducive to taking time to think," she says. "The result is iconic thinking, quick fixes and short attention spans." Whether culture is the word to describe the possibly disturbing trend of some of the youth of Britain engaged in hours of nocturnal X-Box gaming, is open to debate. And if this is truly shaping a different type of brain as is also suggested is similarly a matter of conjecture, but what I found truly worrying was the suggestion that a generation bent on quick fixes and short attention spans are not only entering the work place but could next become managers. Arguably less qualified than their parents - despite degrees from some minor English town or village that now enjoys university status - and steeped in texting in a language reminiscent of the long redundant telex machine, how will we engage them in a conventional business approach? A different report noted how the impending retirement of the post war baby boomer generation was going to create a significant knowledge gap for many organizations. Will the newly named screen generation be their replacements? If so it is likely they will require knowledge in easily digestible packages. Whichever outcome, documenting, databasing searchable information seems to be something businesses should prioritise to ensure knowledge is retained in an organization, available to all that need it and accessible. Yet another report criticized the difficulty of pulling all the information together and finding it in a timely way. It is something long advocated by Technical Marketing Ltd, the building of a knowledge resource using web database techniques to acquire, store and provide accessibility to vital information. Enlightened companies are working on this recognizing the importance of securing the investment that has been made in acquiring the knowledge in the first place.

Are blogs relevant to b-2-b?

A great deal is being written about blogs. Company CEOs and politicians are said to write them. Individuals record their mundane daily activities, journalists break news using them, but very few of them ever get read! There is a lot written about the idea of blogs and the rapid growth in the number of blogs in existence – but is this just another idea with more puff than real value? A recent survey published by eMarketer quoting an American Advertising Federation report rated various new media for effectiveness putting blogs at a mere 13% just ahead of RSS with 8%. Leading the list was search at 49% followed by online video 34%, Social networking 30%, podcasts 21%, video games 20% and mobiles 15%. A veritable raft of new media communication opportunities and a lot of food for thought. Will there be winners and losers? Will they all develop to oust traditional media? Who knows? Back to blogs. According to Technorati the 50 millionth was tracked back in July 2006, the blogosphere is doubling every 6 and a half months, 175,000 new blogs are added each day, there are 1.6 million postings a day …. so not something to be ignored then. Except this nagging concern about effectiveness – well I guess if nobody reads most of them this is not surprising. Another part of the eMarketer article concluded that awareness of blogs really depended on links from other blogs – 63% and 22.9% by recommendation. Only 19.6% were via search engines so optimising content is going to be less effective than getting some well known bloggers to link to your blog. More about word of mouth marketing than conventional promotion. So where does this leave blogs in the technical marketing plan? Perhaps we are the frontier of a new communication media revolution …. Perhaps.

Small is beautiful ... or is it?

A piece of market research arrived this week from accelerator offering an introduction that they were ‘aiming to find out what’s really going on at the front line of small business’. In an earlier blog – September 18th 2006 – I noted that in terms of numbers 99.3% of all British businesses were officially classed as small, that is they employ 49 or less people according to government statistics. Of course the mere act of taking on employees immediately changes the nature of a small business – you are now managing people and dealing with a whole raft of employment legislation – and it is easy to forget you actually need to service clients and customers to make money that creates wealth. May be that is why nearly two thirds do not have employees. Of those that do the second biggest perceived threat is actually recruiting and keeping good staff. Not surprisingly 71% thought the UK government did not do enough to foster small businesses and business people. So no surprise there. Despite this 72% thought the UK a better place than Europe to start a business but significantly only 34% and 42% respectively thought the UK better than North America and Asia. Autonomy rated at 38% was the top reason for preferring to work in a small business. We are left with the question of whether there are two emerging business communities – the relatively few global giants and the mass of small businesses. Our experience suggests big businesses talk about marketing expenditure within an often somewhat arbitrary budget, whereas small businesses focus on generating more business profitably. What the statistics suggest is that marketing one small business to other small businesses is a factor that cannot be ignored and business to business technical marketing will need to provide efficient means to do this successfully.

No time to listen to a proposal?

We once ran, at the clients’ specific request, a cartoon in their newsletter. The scene was an ancient battlefield, a king brandishing a sword and wearing a suit of armour was being tapped on the shoulder by a knight trying to attract his attention. The caption was ‘I don’t want to see any crazy salesman. Can’t you see I have a battle to fight?’ In the background stood the salesman clutching a machine gun! We turn now to an article about overcoming TDD – Time Deficit Disorder. As the argument runs, businesses are down-sizing and the remaining staff are too burdened with keeping everything going, their time is over-scheduled with none spare to evaluate new propositions. It is an interesting concept TDD, or maybe its just difficult to engage in the right type of dialogue with a prospect anyway. So the task of the marketer is to convince the prospect it is worth allocating some time to listening – there might just be a solution to an existing problem. The approach needs to get quickly to the point – what are the benefits and are they relevant to the prospect. This is where the marketing skills are needed. To gain the attention in the first place, offer relevant benefits and make responding to the offer easy and quick to do.

The information revolution ... and is it any use?

A news item from a client today referred to Burkina Faso – what is that? A country? A town? A person? – why not Google it she said, then rang off. The CIA web site flagged it as an African country – I later discovered it was Upper Volta – maybe they decided to re-brand after all the snide remarks down the years. Of course Googling – a name or term that itself didn’t exist a couple of years ago - immediately yields millions of references; sometimes too much information. A document from the IML Group referred to the too much information problem, a problem they had now solved by having a site where only the businesses or products you are actually after are turned up by their search. Another report from Accenture today of a survey conducted amongst a 1000 UK and USA managers reckons 53% of the information they gather actually has no value at all. It gets worse – they can’t easily get hold of the information they need, it is in too many places, others in the same company won’t share it, too much information making it hard to find what is needed … and so it goes on. One large corporate I worked for demanded masses of information all the time. Of course most of it was useless because people had to make up information to fill their report quotas. For the 5 year business plan one essential piece of information was the market share to 2 decimal places of our 3 biggest competitors – even the competitors didn’t know themselves, I know that because I called them up to ask. More recently a client appointed a high ticket marketing guru who wanted a complete audit trail tracking every marketing dollar invested to value of resulting sales. Not surprisingly their IT systems could not actually deliver this information. The data was all there somewhere, but on different systems. The effort in extracting, using and interpreting the data was hardly worth it – although it did confirm what we already knew. And that really is the issue – gathering information for its own sake can be a waste of resource – the big question we always ask is, so now you know the information you wanted, what are you going to do about it and does it help? If it does – good. If not then was it worth the effort?

Benefits before explanations

Two totally different items, apparently unrelated but not if you happen to be an engineer working in marketing. An interview on the BBC breakfast programme today discussed a news item that National Health hospitals were about to begin advertising for patients. The interviewer started with the premise that money was to be spent on advertising and wanted to know how much, so that this figure could then be equated, if invested differently, into more doctors or patient services. The interviewee then explained that advertising was just one aspect of marketing and in fact at her particular National Health Trust, none of the marketing communications budget was actually being spent on advertising. As a marketer and engineer this need to explain what actually you do is something we meet regularly. In fact for as long as I have been reading the IEE journal the letters page has run frequent complaints that the status of electrical engineers is not understood and that engineers are viewed by the general public as repair men. I have experienced this personally in the past when relatives would invite me to fix items of failed electrical apparatus when I visited their homes. So one of the first tasks with any new marketing prospect or client is to explain what we actually do. Of course the TV interviewer’s perspective that marketing is advertising is a widely held view and so we have tended to focus on promoting the benefits first to reduce the whole client educational process to an easy to understand concept. The bottom line is that by investing in marketing you can grow your business and increase profits. Of course that works best when talking to the owner or the person responsible for the P&L account. In larger organizations department managers tend to lose sight of this because they are measured on managing a budget to come in on target which is not the same thing at all. One approach we have used is to write very simple briefings on a range of marketing topics which are both syndicated via other web sites and available to download as a PDF book - Minute Marketing .

Using news as part of a customer retention strategy

Experience shows that for our clients, most enquiries are now made by telephone or via their web site. An analysis that tracks enquiries through to orders and sales value for a company selling capital goods with a long product replacement interval, highlighted two very important facts. First, the highest value was derived from previous customers and the second most valuable group was people already aware of the brand. A central proposition in our marketing strategy for this particular client is to retain ‘top of the mind’ awareness for the brand and reinforce the brand’s value during the long time interval before they need to replace or upgrade. This has the effect of reaffirming the correctness of their original decision to go with the brand in the first place and to prompt their recommendation to others who are actively evaluating options to make a purchase decision. Apart from a continuous press and public relations campaign in the trade press, on industry web sites and news portals, customers and prospects receive personal communications by e-News at intervals of 8 weeks and a news magazine twice a year. The e-News html format has a branded masthead and presents six recent stories, each with an image, headline and news summary, linking to a Virtual News Office on our client’s web site where the full story can be read, typically with additional images and links. The magazine format is designed to offer high retention value, to elevate the piece well above ‘junk mail’ status and to offer an interesting and informative read, with motivation to pass on to colleagues to share. Relevant content is vital and comprises a mix of user product experience and endorsement, product updates, expert opinions and industry and community news. It is designed to position our client as an authority and totally embedded in the user community. This subtle ‘soft sell’ approach is supported by positive customer feedback and most importantly – orders!

Two thirds of all economic activity influenced by shared opinions?

A recent article claims that ‘today’s savvy consumers often trust a recommendation more than traditional advertising, marketing materials or other company communications.’ The article quickly moves on to Word of Mouth Marketing which perhaps surprisingly, then again perhaps not, has its own association – the The Word of Mouth Marketing Association or WOMMA for short. Amazing – but it does encapsulate long held views that recommendations about a company’s products or services are a powerful marketing tool and putting effort into delighting customers not only helps prompt a positive recommendation but equally valuably retains loyal customers. A third party endorsement deployed through a marketing vehicle such as a case study is a well-proven and useful means of showing others how the product can be used to the satisfaction of a customer and is well used in b-2b marketing. Products sold through consultant or architect specification often need the endorsement of leaders to persuade others to follow. According to WOMMA, two-thirds of all economic activity in the United States is influenced by shared opinions about a product, brand or service. The article the on goes on, ‘Research shows that recommendations that are ‘bought’ (through incentive programs and other similar marketing initiatives) do not yield the same financial benefits for a company as ‘earned recommendations’ do (which result from truly satisfying customers)’. So despite the new terminology, the story seems to be ensure you have satisfied customers because they can often be your most valuable marketing tool as well.