Our digital Christmas card to our sister office in Munich. No one does Christmas better than the Germans. Thanks to Michael Holder in our Cincy office for helping us put this together. Merry Christmas all! Watch here.
The 2015 planning season is upon us. It’s the time of year when the C-Suite is busy sharpening their elbows to ready themselves for the budget brawl. To help arm marketers for this blood bath, I’ve pulled together benchmarks and/or research needed to defend and win marketing dollars. Here are some answers, and sources, for your five toughest budget questions.
- How much should we be spending on marketing? It’s a classic question and a favorite of CEO’s everywhere. The mere mention of it is enough to stop marketers in their tracks. Fortunately, the AMA, McKinsey and the Duke Fuqua School of Business have got your back with their 2014 CMO Survey. Section 3 of the report contains data from 350 marketers on their spending from digital to people and programs. The research even breaks spending out by size of company, type of company (B2B or B2C, and B2B products or services). The report is packed with valuable information — it’s a “must have” for any marketer this year.
- What should the mix between people and programs? This question comes shortly, if not immediately, after the question above. Ten years ago the general benchmark ratio was 40/60, forty percent of the budget went to staff and the remaining to program spending. Now it’s the reverse, 60/40 people to program spending, for a number of reasons. The biggest factor has been the need for specific skill sets that are in high demand relating to analytics, social media and content marketing have driven up staff cost. Need more information, here’s a useful infographic on the real cost of social media, including salary cost for staff.
- Where should we invest? Typically, this is a teaser question, and could also be asked as; “if you had an incremental $1 (or $10K, $100K, etc.) where would you invest it?” Keep in mind that just because the CEO is asking the question doesn’t necessarily mean you’ll get the incremental funding, but you better be able to answer the question. To do that see IBM’s C-Suite Priorities report entitled The Customer-activate Enterprise. The research, collected from face to face interviews with over 4000 senior executives, provides insights into the priorities of each member of the C-Suite. The top priority in the report is Digital. Including everything from increasing responsiveness to customers, to making the organization more agile and responsive. Specific priorities for CMO’s, it’s about capturing; analyzing and using customer data across touch points.
- What’s the payoff/return/business impact of Social Media? There are a number of sources that you could tab into to help develop a response. I’ve always been a fan of HubSpot’s State-of-Inbound. Additionally, if you have downloaded the CMO Study mentioned in bullet #1, there is a whole section on Social Media (see graphic). Interestingly enough after four years “Visits” and “Followers/Friends” are still the leading social media metrics today. Personally, I’m not a fan, try using measurements related to engagement. Note the gains being made in “Conversion Rates” and “Buzz Indicators” over that last four years. This is the result of the development of better measurement tools. Here’s a great cheat sheet from SocialMediaToday on the Top 50 Tools. For digital and mobile benchmarks download Adobe Digital Index’s Best of the Best Report.
- What return should we expect from our marketing investments? This is a loaded question. Recognize that what the executive really wants to know is: “What will marketing do for me and/or my group?” As a result, answer the question based on their area of interest, and in their language. If it’s a sales executive, talk in terms of new leads, customers and pipeline value. If it’s the CEO, talk about brand value, revenue growth or customer retention or loyalty. Rarely is this question asked on behalf of the organization as a whole. Even more rare, is the executive that believes the numbers you’ve quantitatively derived for a ROI.
Lastly, go in strong and ask for a bigger budget. Here’s a report to keep in your back pocket in case you need it, Gartner’s CMO Spend 2015: Eye on the Buyer. The report will support your request for an increase, and maybe help the “powers that be” understand that if you’re not getting a bigger budget, your key competitors probably are…now go get ‘em!
Like much of the world I tuned in last week to watch Tim Cook unveil the latest Apple products and services. Afterwards, I was curious to see the analysts and so called “tech experts” reactions on the announcement. Most were ho-hum “nothing new here”, and “it was what we expected,” the market response was similar, with the stock getting a small bounce then falling after the announcement.
Apple, better than anyone, gets the “use case” right for its technologies. And it is why I was surprised by the media and analysts reaction. Listening to the announcement and recap, most of the focus on Apple Pay was on Retail use. In the press release, Apple discusses the near field communication (NFC) technology, names its retail, credit card and bank partners. Pointing out that there are merchants ready to accept Apple Pay as a very secure payment method. But nothing that really got the media excited, go into any Starbucks on any day and you will see plenty of mobile transactions.
Digging a little deeper, buried at the bottom of the announcement is something more intriguing – “Touch ID” which enables “one touch checkout” for Online Shopping Apps. Say good-bye to the hassle of entering your credit card information on the small screen. See something you like, touch it, and it’s yours!
App developers have already started building Touch ID into retail apps. On the same day of Apple Live, Target announced that it has adopted the Like2Buy platform that which allow the chain’s Instagram followers to buy products featured in photos and Target is now integrating Touch ID into its mobile app. Touch ID for mobile apps is the big deal, but not for the reasons you might think.
Apple is a “big play” kind of an organization. A $349 watch, and people upgrading to an IPhone 6 isn’t going to move the needle for a $171 billion dollar company. Apple Pay helps but that’s a basis points play that gets split multiple ways between the service provider, credit card company, the bank, etc., and it will take years for it to be widely accepted. So where’s the “big play” with Apple Pay?
It’s mobile advertising. According to Mary Meeker in her 2014 Internet Trends report, mobile advertising represents a $30B opportunity in the US alone, based on time on device. Ad spend has lagged because of issues relating to tracking and measurability.
This is why Apple Touch ID is so important; it has the potential to improve tracking, measurability and ROI significantly. With TouchID the buyers never leaves the screen to transact. Attribution, tracking and conversion rates will improve, but the challenge remains — how do you get consumers to transact?
According to McKinsey’s From solutions to adoption: The next phase of consumer mobile payment, you give them a special deal or offer – an ad. There’s the closed loop.
Most important Drivers of Mobile Payments
Respondents ranking most important (light blue) and least Imports (dark blue)
Apple has had a long history of introducing products at the beginning of the “hockey stick”, usually relating to the consumer adoption curve of new technologies, this time the hockey stick is mobile advertising. The real payoff of Apple Pay for now, in my humble opinion, is not retail, it’s mobile and it is about buying on your phone versus paying with your phone.
The team killed it. The presentation was flawless. The proposal was outstanding. You covered all of the bases, but you lost. Searching for answers, the only thing you can think of is that the other guy must of “bought the deal,” right? In the article entitled; Why B2B Sales Leads Don’t Convert (and Who Is to Blame) Marketing Profs.com highlights a recent survey of close to 200 marketers, sales professionals, and president/CEOs on their thoughts on why deals were “lost.” Not surprisingly, 60% said that “price” was the main reason, but what may surprise you is that percentage is wrong.
To truly understand why deals are lost, you have to get feedback from buyers. Having conducted numerous post mortem analysis of lost deals, and buyer behavior research, here’s what I have learned. Roughly one third of all buyers consider price as one of, or the main driver of a purchase decision. Pure price buyers represent about 5-10% of all decision makers. The remaining portion (20-25%) are value buyers who may, but don’t always, buy the lowest priced product or service. Using those numbers, the research overstates “price” as the reason for a loss by a factor of 2X. What accounts for the remaining thirty percent? Here are three common reasons for losing a deal, that doesn’t involve price.
- Low investment in the relationship – deals are not solely rationally made purchase transactions, especially as price and product complexity increases. Selling bigger ticket items involves a degree of trust built between a vendor and a buyer. Recent research by Fortune and gyro found that 65% of executives believe subjective factors that can’t be quantified (like a company’s culture and values) make a difference when evaluating competing proposals. Even more executives (70%) said that a company’s reputation was a critical consideration in the decision making process. Investing in relationship building with buyers takes time but as the research shows, it’s worth it. If buyers say that the only time they hear from a rep is when he/she wants to sell them something…that investment is not being made.
- Focusing on the wrong message – focusing on only selling the business value (functional benefits, business outcomes) of a product limits sales ability to make the case for a higher price. Connecting the value the product delivers to the buyer, on a personal level, helps reps broaden the conversation. According to CEB research, not only are you twice as likely to win the deal by focusing on personal value drivers (professional and personal benefits, like a promotion, admiration from peers, etc.), but also, buyers are eight times more willing pay a premium. To do this effectively sales people need to be able to put themselves in the shoes of decision mak ers. They need to understand their buyers’ situation, role, relationships, etc., and sell the value of the product or service to those unique needs. If reps only know how to sell “feature functionality” the conversation will all too often come back to price.
- Missing the real buyer – there is no guarantee that past buyers will be key decision makers in future purchase decisions, or on other types of products. Years ago, I did a post mortem analysis for a medical equipment company on an innovative new product. Sales said they were losing deals because it was priced too high. The analysis proved that they were both right, and wrong. The traditional buyer, did in fact, believe that the product was priced too high compared to others in the market. But a new set of users who had become the primary decision makers had emerged. This group was using the innovative technology as a revenue generating procedure. As a result, they valued the product differently and were willing to pay a premium. Deals were lost because the company didn’t understand how buyers intended to use the product, and as a result, they missed the key decision maker.
The simple answer is that deals are lost because the case for the value of the product or service has not been adequately expressed to meet the needs (professional, personal or both) of the key decision maker. Blaming “price” is a convenient crutch that shifts accountability to the product or pricing team, and away from sales and marketing. Finger pointing may make us feel better about our role, but it doesn’t fix the problem. If you are truly intent on increasing win rates dig deeper into understand why, I can guarantee you won’t find that it is “price” 6 out of 10 times.
I just spent a week in the Caribbean on an island with lovely beaches and an incredibly high cost of living. The island has no income tax, so generates the majority of its income from tourist like you, and I, through a very large VAT tax.
Simple staples, like bread, are priced so high it made me ask my wife “How does anyone afford to live here?” The answer became apparent as the week went on — you’re either very wealthy (not us), or that you live very simply.
As the week progressed, I found myself appreciating the fact that less could be more. Once my awareness was raised, I discovered a certain elegance in the simplicity. For example, the cabinets and crown molding in our room were white washed rather than covered with layers of expensive paint, actually highlighted the natural beauty of the wood grains.
Arriving home to the states and the “routine” with my newfound appreciation for minimalist living, I found that I am now highly sensitized to the waste within marketing. The unnecessary use of “empty” words used to make extravagant and/or over inflated claims that is cluttering copy.
It appears that with the proliferation of content marketing we are starting to see an ugly underside. Marketers focused on getting “views” and social shares, are in a “war of words” that is producing empty promises in the form of audience grabbing headlines that fail to pay off with insightful or promised content.
Words like “epic” or “iconic” once rarely used, (and when they were, they were actually describing something that was of a significant historical event) are now used to describe everything from trade shows to webcasts, so overused, they have become meaningless.
In the past, when someone made the statement that they were the “Leader in”, they actually were, and could back it up. Or when they created a “Top 5 List or Best Practices”…they had the research to actually prove it. Now marketers randomly use those enticing titles in headlines in a desperate attempt to get noticed.
Fueling this are insights from content marketing tools are enabling marketers to engage in this “copy cat” hype game. Just pick a topic, go to a site like BuzzSomo, search for the most popular headlines, and then build something similar.
Content marketing, and for that matter Native Advertising, can benefit audiences and be effective marketing tools, but not if these practices continue.
Thanks to Steve Jobs and Apple, simplicity and “clean lines” are now pervasive within design. It has helped to streamline and simplify brands, from logos and website to products. The time has come for it to influence copywriting and content production.
Yes, it takes longer to write a shorter sentence, but it’s worth it. As the late great Maya Angelou once said, “Easy reading is damn hard writing. But if it’s right, it’s easy. It’s the other way round too. If it’s slovenly written then it’s hard to read.” As marketers, we have to do better, be better. Strive for elegance in your craft. Don’t paint the essence of what you want to say, or promote, with layers of needless or empty words.
If you want someone to read your content — be credible. If you want it shared, say something insightful or newsworthy. That is the way it has been, and will always be. It’s that simple.
I found this in a file earlier this week. It was part of a pre-work exercise for a well known professional services firm. We were engaged to help them redefine their corporate value proposition and messaging architecture. I thought it might be useful for the group.
Who Uses It?
- Marketing Teams
- Investor Relations.
What You Should Not Do:
Most elevator pitches miss the mark because:
- They are too long–“We have an elevator pitch but it requires a building with 700 floors…”
- They are too technical
- They lead with bragging points or product features — “We are the leading provider with 54 offices in 29 countries.”
- They are ego-centric rather than customer-centric—An elevator pitch is a response to the question what do you (or what does your company) do? When a customer asks this they mean, “what do you do for me? “
How To Do It Right:
- Be customer-centric
- Be concise (30-60 seconds max)
- Be true and “ownable”
- Convey business outcomes, not bragging points or features.
- Show, don’t tell— provide a story that will show a customer what your company will do for them.
Elevator Pitch Should ‘Tell a Story’ that:
- Addresses: Situation, Impact and Resolution
- Starts with customers; ends with outcomes
- Quantifies your value proposition
Try beginning with a provocative statistic
It should consist of three parts:
- Situation – cite the dilemma, pain, difficulties or complications that the prospect faces…
- Impact – quantify the impact that the situation is having on the prospect’s bottom line…
- Resolution (Solution) – how do you solve the problem?