Social Media Marketing: Improve customer experience by experiencing customers…..….

In the traditional enterprise software world of the late 90s and early 2000s, ‘collaborating’ with our customers or prospects wasn’t a common occurrence. In fact, the ‘window” to the customer was typically via the sales channel during the sales engagement process, where informal collaboration might occur but the engagement objective was about closing the deal. Some vendors met with customers individually or as a group as part of the product requirements process. User groups were established which met on a regular basis but in many cases, these venues were more about “pushing” information to customers. Developer sites were also established to both push information and respond to customer inquiries – always product-related – about features, functions, fixes, etc. The world ‘collaboration’ was never used in the same sentence as the word ‘customer’.

It’s interesting how the term ‘customer relationship’ turned into ’customer relationship management’ (CRM). When first hearing the term – 15 years ago or so – my interpretation of the term ‘customer relationship’ was: establishing great relations with our customers. While that is the objective of CRM systems, somehow the personal aspect of relationship building faded from view as we got caught up in the technology side of the relationship equation.

Then the term ‘customer experience’ surfaced. Where CRM is about customer-facing parts of the organization and is typically a one-way street – that is, the vendor gathering data about the customer; customer experience is a two-way street - multiple channels within an organization interacting with customers. And, the more personal the interaction is, the better because that makes a customer feel important…special. We send the message that we know the customer and understand his/her (relevant) issues or want to.

My view is that the objective of customer interaction is to create a collaborative forum to gather and record historical data to (1) understand our customers (profiling), (2) improve personalization and most importantly, (3) know, understand and gather information about our customer’s behavior, preferences, thoughts, intellectual property and points of view.

One way to do this is for us as software providers to “experience the customer”: provide multiple forums to share our information, ideas, questions, thoughts, intellectual property and experiences with our customers/prospects AND create a dialogue to encourage interaction so that a customer responds with information, ideas, questions, thoughts, intellectual property and experiences back to us. The dialogue or conversation is continuous. This is one of the key objectives of social media marketing.

I was recently reading a blog by Larry Brauner, a well-followed social media marketing professional – the link here speaks for itself http://online-social-networking.com/top-10-reasons-for-social-marketing. One of Larry’s ten points is that social media marketing allows us to dialogue with our customers. I concur with this and his other 9 excellent points and believe that, even more importantly, social media marketing creates a forum for developing and maintaining positive (and hopefully continuously improving) experiences for us, as software providers AND for our customers. Creating these mutual experiences delivers mutual value.

Here is a list of 7 value items that we, as software providers, realize:

(1) Improved insight into the customer by improving customer profiling and personalization.

(2) Foresight into the customer, his/her preferences, top of mind issues, points of view, signals on anticipated behaviors, etc. for continuously improved profiling, messaging, targeting and personalization.

(3) A continuous and formal medium to collect, collaborate and share information on product and marketing requirements.

(4) User-generated content that we can analyze, publish and share back to our customers and initiate continuous dialogue.

(5) User-generated content for use in off/online demand generation campaigns.

(6) Be recognized as the “go-to thought leader” as we build a thought leadership ‘library’ about various topics over product issues, product requirements, industry issues, economic issues, top of mind issues, compliance issues, any relevant issue around our ‘space’ as a software provider.

(7) Most importantly, the quality of our customers' experience, our experience with customers and demand generation campaigns continuously improves since we no longer have to exclusively rely on internal resources for dialogue or campaign content.

One important last comment: Social media marketing is not the be-all, end-all. My view is that social media marketing is blended with traditional marketing strategies to develop an integrated campaign that targets a specific audience. More on this later…..

I welcome and look forward to any thoughts on this positing. After all, blogging, like all other social media marketing mediums, is about creating a dialogue…..….

The Potential (But Not Necessary) Evolution of Solution-Selling

So by now you probably have figured out that there can be a very fine line between solution-selling and selling solutions and that many people confuse and interchange the two phrases. While sales and marketing people can understand solution-selling (but I’ve always approximated that 1/3 of technology-drive sales people can intuitively understand solution-selling with minimal training, 1/3 with LOTS of training and 1/3 will never get it), there is still confusion over what a solution is.

Defining ‘solution-selling vis-à-vis a ‘solution’ can be a chicken and egg thing so let me start by including this picture that I believe is one viewpoint on how a solution-sell can evolve – but that doesn’t mean it has to in every solution case and/or for every software provider.

For example, many enterprise software companies and system integrators only ‘solution-sell’ and never evolve to the next level. Regardless of the number of installations and customer success stories, these organizations may never ‘publicly package’ an individual success – no matter how many times it is or can be repeated. Every implementation is a custom and potentially ‘one-off’ implementation. This is not to say that behind the scenes, these organizations aren’t using reusable or repeatable code for subsequent like-kind implementations but that is not advertised. The perceived value is strictly domain expertise.

Other software vendors evolve their solution-sale to a Level 2 – that is, they sell the value of domain expertise with emphasis on one or more customer references. These organizations may advertise “speed to implementation” by using reusable or repeatable code while also emphasizing personalization and customization. (Note: Service Oriented Architecture (SOA), Java, .Net Framework are examples of architectures and developer tools that are based on concepts of reusable services and code. Note: I chose links that can explain these terms to the non-technical individual - see other links below for more information.) The solution is typically demonstrable in some form – perhaps even as simple as a reference customer site visit. Many of these types of providers are “boutiques” typically specializing in selected segments or solutions. As with Level 1 providers/integrators, many of these organizations stay at Level 2.

Many enterprise software providers have tried to move to Level 3 with mixed success. The benefit of a ‘solution template’ is that it sends a strong message regarding domain expertise – Wow…this vendor has done this so many times!! . Typically, the template offers anywhere between 60-80% “standardized code” with the ability to customize. There are many reference customers to showcase, collateral, success stories, demonstrable ROI’s and a packaged demonstration and some technical documentation. In many cases, the template is not supported per se because of the amount of customization that is typically done by the customer or a 3^rd party developer.

Level 4 solutions are what I call ‘out-of-the-box’ applications that offer extensive documentation, training, upgrades, enhancements, domain expertise, many reference customers, collateral, success stories, on-going support, demonstrable ROI and a packaged demonstration for many different scenarios.

Deliberately evolving from a Level 1 or 2 solution providers to a Level 4 provider means that the initial implementations must keep repeatability, market opportunity and mass appeal in mind when writing initial requirements and code. This means that initial implementations will take longer vis-à-vis a ‘one-off’ implementation, using the first few charter customers as alpha/beta testers. Some providers encourage this by offering special discounts, royalties, special considerations, etc.

Bottom line is that a solution is not necessarily an ‘application’, nor does it ever need to be. What level a provider achieves or maintains can be different than another provider and both strategies can succeed. I have found that some technology is conducive to being ‘packaged’ as a ‘repeat performance’ while other technologies are not.

Some interesting links

http://hoskinator.blogspot.com/2006/06/10-tips-on-writing-reusable-code.html

http://searchsoa.techtarget.com/news/article/0,289142,sid26_gci968206,00.html

http://www.streetdirectory.com/travel_guide/148379/programming/repeatable_code___a_step_up_from_reusable_code.html

Choosing Initial Segments and How Many...

In reviewing my postings, I realized that I didn’t elaborate on how to choose what initial segments to target and how many. This is a very important topic because making the wrong decisions can lead to failure. I recall one organization I worked with – the CEO explaining how he had launched a solutions focus by identifying 27 different solutions across who knows how many segments. The company couldn’t afford to execute to that and so it was not a surprise when the organization moved back to a horizontal focus.

For many enterprise software companies, hiring industry domain expertise means adding additional personnel. If your organization continues to maintain a horizontal play as well as a focus on industry segmentation, industry managers don’t replace product marketing managers. This means that you need to keep the investment in industry sales and marketing to a minimum in the initial stages. Strong recommendation: chose 1-3 industries to start and no more. Establish a beachhead first…focus on that for 2-3 years, then move forward.

The best approach to identify what initial segments you want to address is to analyze (using the 80-20 rule – not analysis paralysis) your current customer base to identify the top 1-3 segments that historically have been a natural fit for your product or solution. These should be your first choices for replication since already having customers in these solution areas (let's call them "charter customers") provides an opportunity for your organization to “reference sell” . An analysis should also consider the economic growth of your chosen industry over the next 18 to 36 months, including projected IT growth rates, potential industry consolidation, industry initiatives, recent legislation/regulations as well as the number of prospects, average deal size and what market share you believe you can win. Recommendation: quantify the market opportunity and your organization's projected revenue opportunity as best you can.

Here are some links that may be of interest on some of the topics discussed above...

http://www.referenceselling.com/

http://www.customerthink.com/blog/how_social_media_wont_revolutionize_reference_selling

http://relationshipeconomics.net/blog/reference-selling/

http://www.svpg.com/charter-customer-programs/

I believe that talking about the evolution of solutions in the next posting now makes sense.....

Part III - Tips on Segmentation, Solution-Selling and Selling Solutions

In order to address segmentation and answer the question: what am I selling to a given vertical that differentiates my product or service from what I sell to another vertical – I find it is good to talk about the concepts of ‘solution-selling’ (or ‘solution selling’) vs. ‘selling solutions.’

I remember working with one enterprise Software Company evangelizing solution-selling as I was working to expand this organizations brand from an infrastructure company to a “solutions” company. Since I had been an early advocate of (and thoroughly trained in) ‘consultative selling’, the notion of solution-selling was natural for me to embrace. I was very surprised about a year into this position when one of the most respected product marketing directors exclaimed: “Terry, when you talk about solution-selling, I thought you were talking about selling applications.” I then realized that I had some work to do to better explain myself.

Even as late as this past year, I’ve been asked the same question or something close to it – “What is solution-selling?”, “What is a solution?”, etc. Some years ago, it was rumored that IBM was asking similar questions and engaged SiriusDecisions to define a “solution”. A white paper on this topic can be found on the SiriusDecisions website (but you may need to have a subscription).

Here are my thoughts on solution-selling, what a solution is, etc.

Solution-selling is different than selling solutions. Typically, when selling solutions, the prospect tends to think you have an “out-of-the-box application” or something quite close to it. Selling an application can incorporate (and should incorporate) solution-selling concepts but solution-selling does not mean you are selling an application…is this confusing?

Solution-selling occurs when you position your marketing and sales message to address a “business pain” that a prospect is experiencing instead of merely selling technology for technology’s sake. In a good economy, such as what we experienced in the late 90’s, your prospect organizations were enamored with technology and were willing to spend big bucks just to have the latest and greatest technology “toys”. In most cases, it was the IT organization that made the buy decisions. When the .com bomb occurred, we saw the pendulum swing away from buying technology for technology’s sake - to the requirement for organizations to invest in technology when a line-of-business (LOB) executive indicated that he/she needed this technology to solve a strategic (or tactical) business problem. The challenge technology vendors had: convince the LOB executives that your technology could address their business pain. Hence, the language of marketing and selling had to change. This is what we call solution-selling.

So, instead of selling features and functions to IT (who could intuitively understand why a given feature/function was important), we had to sell benefits and return-on-investment (ROI) to the LOB executive. Technology vendors had to ‘talk the talk’ of the business executive. If you were selling technology to an insurance company claims vice president, you needed to talk about claims management and processing. If you were selling to a bank’s mortgage department, you had to talk about mortgage servicing and processing.

Since the beginning of time, technology organizations have been working to execute to a solution-selling approach. Even today when I speak to many software organizations, solution-selling is top of mind.

Here are some links to other blogs/articles defining solution-selling which offer similar points of views. There are also many books available that go into detail regarding solution-selling sales methodologies.

http://businessskeptic.firstrulecorp.com/2007/10/13/solution-selling-defined/

http://www.4hoteliers.com/4hots_fshw.php?mwi=3476

http://en.wikipedia.org/wiki/Solution_selling

Next posting, I will talk about my views on the evolution from solution-selling to selling solutions…..

Part II - Tips on how SMB Enterprise Software Companies can better segment

This is a 2nd posting on this topic. See posting dated August 12, 2009 for Part I of this series.

'Segmented messaging’ is typically a first “baby step” that many SMB software organizations choose when “going vertical”. The challenge you face is: where do I get the content? The answers are:

(1) Identify company personnel who have specific industry expertise and/or

(2) Hire part time consultants who have the domain expertise you need as an interim step and/or

(3) If you have already defined your longer term roll-out plan for verticalization and plan to move to “segmented marketing”, you may want to consider hiring marketing professionals with domain expertise.

‘Segmented marketing’ means that you plan to target all of your marketing messages directly to a given segment by developing an “integrated marketing” model and I emphasize the word “integrated”. In the past, I have seen organizations move to segmented marketing but in a fragmented way, e.g., run segmented lead generation campaigns but not segment the message in media, public or analyst relations. I have never seen a fragmented marketing model work. In fact, every like-kind approach was an abysmal failure forcing the organization to revert back to the former “horizontal” model. (And typically try a vertical approach again a few years down the road).

Marketing messages need to be consistent. If your PR team is talking a different talk than your lead generation team, you will more than likely waste marketing dollars and never realize an acceptable ROI on segmentation.

‘Segmented sales’ occurs when the sales force is verticalized but this is not an all-or-nothing approach. In fact, in most cases, sales verticalization is localized. Metropolitan areas may realign sales over verticals where there are large concentrations of companies whereas rural geographies might identify multiple verticals or not verticalize at all. In some cases, both sales and pre-sales technical support may be verticalized or just sales. In other cases, (and this is prevalent in initial phases), sales will not be initially verticalized but sales “domain experts” - what we call “rain makers” - work with sales as an “overlay” function.

Unlike segmented marketing where only an integrated approach will work, there are many successful segmented sales models.

Next blog answers your question: Ok…I’m convinced I need to “go vertical” but what product/solution am I selling?