drive2

Buyers are just not that into you

By Matt Massey, Managing Director, drive2 Inc.

I was stunned by the results of a poll done a while ago by the Business Products Buyers Survey*. They asked a panel of 478 B2B buyers to specify the percentage of their purchases where the vendor found them. Astonishingly, these were in the minority. These buyers claimed that 75-80% of the time, 'We found the vendor.'

Am I saying we should throw in the towel on outbound campaigns? Do I believe we should abandon direct marketing and let buyers assign themselves to our sales funnels? Absolutely not.

Let me point out some inaccurate conclusions people draw from these results:

• The 20-25% that were found by a vendor most likely bought from that vendor.
• The 'We found them' faction formed their own impression of the vendors in the space, based on…whatever information they came across and put credence in. In other words, it's anyone's guess whether they heard the marketing pitch the vendor had painstakingly created for them.
• Given that B2B prospects are fairly easy to identify, I don't believe that vendors missed 75-80% of the target audience. We must conclude that those who claimed they found the vendor must have forgotten any of the vendor's attempts to reach them. How many times have you heard your rep say, after a rival snagged the business, "I had them in our CRM, but they never moved past the suspect stage."

What I am saying is that if we want to have visibility on more than 25% of our sales, we have to shape up our sales & marketing processes. It's not something either sales or marketing can fix on their own. We have to integrate the message that they first responded to with later lead nurturing messages we give them. Our sales process has to incent reps to regularly check in with prospects. Our outbound activities have to entice them to introduce us to other stakeholders, instead of betraying their trust by going directly to the stakeholders ourselves. We have to politely create urgency for them and give them a business-case rationale that proves our value, not a gimmicky promotion.

As the vendors, we only have so much control over the buying process. We have to work as hard as we can to stay relevant to the buyer, over prolonged periods of time, in the hope that they'll involve us when they decide to buy.

*Results reported in MarketingSherpa's B2B Lead Generation Handbook, 2008 edition.

The Software Isn’t the Solution

By Matt Massey, CEO drive2 Inc.

Question. What lead generation, CRM, marketing automation, web analytics, lead management, data aggregation tool(s) are you using right now?

Next question. How did you evaluate the acquisition of those software products or solutions? Were they based on your overarching vision of what your sales and marketing infrastructure, sales and marketing strategy and tactical programs are or will be?

Overwhelmed? You're not alone, a lot of CEOs, VPs, Directors of marketing and even small business owners are as well!

There are a pile of software offerings out there right now. Too many vendors with too little differentiation. Over the next few years, I believe we are going to see a consolidation of companies and some stabilization in the market offerings.

This process will effectively level the playing field and lessen the HUGE confusion for marketers trying to evaluate the "right fit" solution for their organization.

But hold up a second. I'll be brave and say that the Software Isn't the Solution.

Companies need to put the infrastructure in place and refocus the organizational mindset, then define their process for tactical execution of marketing programs, THEN make the investment in technology to support tactical execution of marketing programs.

I believe the companies that will succeed in the lead gen/demand creation world will come from one of two verticals.

1. Software Companies that offer a one stop CRM, LEAD MANAGEMENT, MARKETING AUTOMATION, DATA AGGREGATION/ANAYLYTICS.
2. Services Companies that understand the infrastructure and process pieces - then as channel partners for the software vendor will implement the appropriate technology to support the infra and process components.

The services play for my two cents is where it's at! More companies need help to tackle the infra issues first, then the tactical execution second.

We work primarily with technology companies here in Canada. In virtually every instance, the primary challenge within the organizations we talk to is bandwidth - not tech bandwidth, people bandwidth.

Who has time? There just isn't enough time in the day for marketing and sales folks to build the vision, the infra, the programs, evaluate the software vendor offerings and implement all of the above. This situation is repeatable in small, medium and large organizations – trust me, we see it all the time. That's why we are placing our bets on the outsourced services model.

drive2 is a demand creation company. We develop performance driven, results-based lead generation and demand creation programs for technology and services companies. For more information on demand creation on how drive2 can work with your company, visit www.drive-2.com.

Stop selling your technology now!

By Matt Massey, CEO drive2 Inc.

I know, telling technology companies to stop selling technology is like asking; "Is water wet?"

What I'm really saying is stop marketing the technology and start selling the business value. According to Business 2.0 Magazine, in 2008, there are more technology companies appearing on the landscape, with market-ready technology, than ever before. We've gotten past the boom, bust and rebound of the .com bubble and these are tech companies ready to go-to-market.

The challenge for almost every technology company is to rise above selling to the IT departments of target customers and start selling to the business line decision makers.

Why? What's the difference?

Selling your technology to IT, engineering or technology departments of target customers poses a significant challenge for small and medium tech companies. Primarily, it results in elongating the sales cycle by first trying to get on the radar screen of already over worked tech departments of a target customer. Then immediately enter into a long process of technology evaluation and fit then eventually moving up the line to determine fit within the existing business model. Add to this challenge if you are small or medium company with low brand awareness, having an even more difficult time because they've never heard of you.

The Business Line Sales Focus –

Sell your business value to the Business Line of a target customer. It's a top down strategy. Engaging at the C-level, Board-level or VP level of the business line, will in most sales processes, qualify your opportunities better and achieve buy-in from senior executives who can drive the process internally and expedite the sales process. Conversely, it can earn you a solid No more quickly and allow you to move on to the next target customer without the issue of having prolonged the sales process, only to arrive at a negative outcome.

Yes, there is the still challenge of getting on the radar screen of the senior executive and demonstrating your relevant business value, but once you've entrenched yourself with the target customer decision maker, its smoother road to a PO and you can drive faster to get there.

drive2 is a demand creation company. We develop performance driven, results-based lead generation and demand creation programs for technology and services companies. For more information on demand creation and on how drive2 can work with your company, visit www.drive-2.com.

Why Are Ottawa Technology StartUps Faltering?

By Matt Massey, CEO drive2 Inc.

The most recent failure of another Ottawa-based start-up; Spotwave (www.spotwave.com) leaves me in awe of the challenges facing technology companies in today's marketplace. It also leaves me wondering how some very intelligent people can burn through $36 Million plus in VC financing in a little over 5 years and I'm positively scratching my head as to why there is an apparent lack of stewardship from the company's former board members to allow senior management not have a clear strategy to be revenue neutral (let alone revenue positive) in as short a timeframe as possible.

There are undoubtedly many factors that contribute to the demise of a start-up, and we will likely never know all of the issues a company like Spotwave had in building and bringing their product to market. There is always the potential for a venture-backed Phoenix Strategy and we'll see the company rise from the ashes. However, a more likely strategy is the technology patents will be sold to the highest bidder and the VCs will get out with whatever they can salvage.

I can say having worked with Spotwave in the past year, there were/are some inherent flaws in the business model that needed to be addressed and at a very basic level. The company positioning just didn't make sense, here's an example of what I mean - direct copy of the content from Spotwave's website (www.spotwave.com):

Spotwave Wireless is the de facto standard for providing carrier-approved, adaptive indoor coverage solutions. The Company's solutions seamlessly bring the outdoor signal inside for both commercial and residential locations - ensuring that cell phones and wireless devices work reliably indoors where they are being used more often.

Changing the economics of in-building wireless coverage, Spotwave's solutions protect the wireless network, are cost-effective, quick and easy to install, and require no maintenance.

What?

Read that a couple of times and try and decipher what the company sells.

Here the quick answer:

Spotwave builds products that improve wireless coverage in buildings where cell phone and wireless service is poor or non-existent.

So, why all the marketing speak? I honestly don't know the answer, but if that's the type of language you're using to position, your company and your products or services, you need to shift your thinking and your language sooner rather than later.

Now, back to the real subject of this blog and my take on why so many technology Startups are failing.

Very simply - Ottawa Tech Companies are placing way too much focus on engineering and product development and never enough focus on marketing and sales infrastructure, strategy, tactical programs and business development.

Yes, we all understand that there at least has to be a semblance of a product ready-to-market, but the reality is; most technology companies are run by engineers. Unless the Engineer CEO also has a marketing or business development background, they very likely inherently believe in the "if we build it, they will come" business strategy and that they need to build the Mount Everest of products before.

It's this type of thinking that needs to be reengineered in order for more Ottawa companies to compete and succeed in an increasingly global marketplace.

What we're seeing now is the lack of a business-first focus by many tech entrepreneurs in a number of ways:

• Venture Capital investment in Ottawa StartUps was down significantly in 2007.
• Angel Investors and VC Firms are now looking more security for their investment: product maturity, customers and sales revenue all factored in as key indicators of the investment opportunity.
• Greater accountability for meeting company revenue objectives and growth strategy in subsequent financing rounds is significant.
• More tech companies are bootstrapping in order to build their company, the demands on the entrepreneur's time and due diligence process by investors requires too much heavy lifting.

It's a stacked deck against the tech entrepreneur.

My view is to take a more aggressive attitude to growth and development:

Put your sales and marketing infrastructure in place as quickly as possible - if you don't know how, find the people who can do it for you, make this a priority.

Place a significant investment in your marketing programs but keep focus - marketing programs should always have quantifiable ROI.

Leverage others' experience – bring in experts to help you and utilize the web - there are great websites like Marketing Profs (www.marketingprofs.com) and Marketing Sherpa (www.marketingsherpa.com) where you can research hundreds of articles, white papers and case studies to help build and hone your marketing skills.

Take on some risk. The old adage is true - no risk, no reward. The number one question I get from CEOs "Well, what if it doesn't work?" My response is always the same; We take the same approach to demand creation that you take to product development and apply it to marketing - it may take some time, but with the right strategy, research, timing, testing and market opening, your investment in marketing will deliver a solid ROI.

drive2 is a demand creation company. We develop performance driven, results-based lead generation and demand creation programs for technology and services companies. For more information on demand creation on how drive2 can work with your company, visit www.drive-2.com.

The Cost Quotient

By Matt Massey, President, drive2

When we meet with companies for the first time, one of the primary questions we get is; "How much will a demand creation program cost?" It's a valid question but not one that's so easy to answer. When a prospective customer asks, we take a marketers approach to the answer – No, that doesn't mean we suddenly get ambiguous and stare off into space…

Simply put, building any demand creation or lead generation program is an evaluation of your investment in corporate marketing infrastructure + tactical program execution divided into an ROI Matrix. The ROI Matrix will output several key figures that will should positively support your marketing investment.

drive2 reviews several key elements within the ROI Matrix to determine overall marketing programs health and individual lead gen. campaign success rates. Here are just a few at a very high level – depending on the complexity of the sale and sales cycle length the ROI Matrices will be more infinitely more complex:

Prospect Acquisition Cost = Tactical Program Cost divided by # Qualified Leads

Customer Acquisition Cost = Tactical Program Cost divided by # New Customers

Campaign Success Ratio = Gross New Customer Revenue divided by Gross Tactical Program Cost

We also don't discount the investment in marketing infrastructure and software has a role to play in determining the true costs of a company's demand creation programs. However these costs can and should be amortized over a period of several years to provide real visibility into each tactical campaign investment.

At drive2, we look at tactical campaign development as another cost that should also be amortized over an extended period. We focus on delivering tactical campaigns that can be duplicated, built upon and we can "shift on the fly" in order to address ever evolving needs of marketing and sales. Advancements in digital printing technology are enabling companies to do more template-driven 1:1 marketing at a lesser cost and the influx of email marketing tools like Constant Contact are allowing companies to reach out to a broader audience with on demand, almost instantaneous response capabilities.

In two words marketing is getting "SCARY PRECISE"! Plus it's getting fun to be a marketer again. Yes, it's still all about the numbers, maybe more so, but at least the numbers give marketers some leverage when its time to sit down with the sales group and discuss marketing vs. sales effectiveness.

drive2 is a demand creation company. We develop performance driven, results-based lead generation and demand creation programs for technology and services companies. For more information on demand creation on how drive2 can work with your company, visit drive-2.com.

The Status Quo

By Matt Massey, President, drive2

Last week I attended a local marketing networking event on the topic of Demand Creation. My initial thoughts were; "Great! Finally an event in line with drive2's services". I was looking forward to this event as both a networking event and the opportunity to open the eyes of a lot of Ottawa-based marketers working for some of the most progressive technology companies in the world about building demand creation programs.

Unfortunately the turnout for this event was abysmal; an audience of 90, of which, at least 20 were associated with the event as speaker/sponsors. Note that the event was liked by most attendees, including this blogger. But this got me thinking, am I missing something? Are marketers missing something?

Then it came to me, this Demand Creation stuff is bleeding edge for marketing. At least I believe it is.

I'm guessing/hopeful that most technology companies are running too fast to take that big picture approach to marketing effectiveness, demand creation model, marketing metrics blah, blah, blah.

I'm also guessing/hopeful that these companies and in particular, the CEOs of these companies don't wait too long to jump on the bandwagon. The reality is that Canadian tech companies need to do a more effective job of marketing and selling their technology. Coupled with strong advances in the Canadian dollar, we no longer have advantageous pricing in our favour and US Companies with competing technology are building their companies better, stronger faster and are clearly focused on revenue generation.

In order for Canadian companies to compete in the global economy, we can no longer rely on the status quo. Building great technology is what we're known for, but the best of Canadian tech companies end up as an acquisition target because they are too focused on investing in and building great technology, while underinvestment in marketing and sales is all too common.

This might sound like a bit of a diatribe, and it is, but I see it happen all too often, particularly in Ottawa.

My message to tech CEOs – It's time to break out of the status quo, continue to build the best technology Canada has to offer the world and put revenue funnel wide open.

drive2 is a demand creation company. We develop performance driven, results-based lead generation and demand creation programs for technology and services companies. For more information on demand creation on how drive2 can work with your company, visit drive-2.com.

 

 

 

Web 2 dot what? – Getting Started with Marketing Technology Tools

By Matt Massey, President, drive2 Inc.

Where to begin with 2.0? - That's what I thought too. If you're in marketing or sales, C-level executive, or an independent consultant, keeping up with the most current marketing trends is a daunting proposition. There are literally hundreds of 2.0 tools out there to help companies big and small rev up the marketing and sales machine faster and more effectively than ever before.

The Challenge? Sorting through the variety of tools, software and web-based applications, all falling under a general industry-labeled banner of Web 2.0, and selecting the ones that will work best for your company.

My Recommendation - Take a holistic view

If you're a technology company, you probably already have some tools in place. Most likely starting with a Customer Relationship Management (CRM) application, maybe an e-newsletter or email campaigns and possibly a Google AdWords strategy to drive traffic. Each of these tools, if used effectively, allow companies a level of measurement of their individual marketing programs, however, they don't necessarily allow for a holistic view of your company's marketing effectiveness.

To be clear, my view of marketing's role within any organization extends beyond the provision of another suspect name and phone number to an already overworked sales team. Marketing's responsibility extends into the sales cycle further and with far greater responsibility. Web 2.0 tools and Performance Measurement Dashboards (insert your own acronym here), give marketing total control of the prospect relationship and allow for greater qualification and nurturing of leads an optimal, active sales prospect.

There are a pile of 2.0 tool applications now available on the market with more coming out each day. Taking the holistic approach means employing the tools that will give you the greatest visibility into the effectiveness of your marketing programs. The best tools allow for maximum integration between marketing programs and tools like your CRM to measure the entire cycle from lead acquisition to closed sale.

If you're wondering where to get started, begin with looking at CRM systems that allow for the integration of 2.0 tools. Salesforce.com, NetSuite and a new open source CRM, SugarCRM are good bets for building your marketing and sales infrastructure. Other tools like Eloqua allow for greater marketing automation and programs management but can be labour intensive for smaller companies and start-ups. As I mentioned, there are literally 100s of offerings out there, and if you spend sometime Googling, you will quickly be able to sort through the offerings.

What's the Plan?

My initial recommendation is to look beyond the tools and focus first on your overall demand creation strategy. Get a full understanding of what it will take to get on a prospect's radar screen and which sales and marketing tools you'll need to have in place to nurture that relationship throughout the buying cycle. Once you've established strategy, evaluate and purchase the tools that will help you improve and maximize the effectiveness of your marketing programs. The plan doesn't solely rely on marketing automation tools. Traditional marketing tools are still equally as relevant as technology-based or Web 2.0 tools.

drive2 is a Demand Creation & Lead Generation company. We develop performance driven, results-based demand creation strategies and tactical lead generation programs for technology and services companies. For more information on demand creation strategy, lead generation programs and on how drive2 can work with your company, visit drive-2.com. 

The New Sales Paradigm – DEMAND CREATION

By Matt Massey, President, drive2

When I read articles on a new and better way to build a sales-focused organization, like you, I'm sceptical, something akin to building a better mousetrap is always my first thought. When you dig deeper however, the facts and realities become difficult to ignore.

• Sales cycles are increasingly elongated and sales process has become more intricate
• Companies can no longer rely on the traditional linear sales strategy (cold call prospect - get meeting - develop proposal - present to prospect - get sale), regardless of industry, service or product the sales cycle is getting longer
• Time is a commodity and your sales team has little to spend on trying to generate new radar screens through cold calling
• The environment for finding quality sales people has changed. A 2006 Manpower Incorporated survey indicated that the hardest position to fill in organizations is sales. "Across North America and Asia, the top three talent shortages are identical -- sales representatives rank No. 1, followed by engineers and technicians. "Employers are telling us that they are not just looking for bodies to fill sales jobs; they want experienced salespeople who know their respective industries and can drive revenues,'' - Jeffrey Joerres, Chairman and CEO of Manpower Inc.
• There are more influencers and stakeholders involved in the decision-making hierarchy within an organization

Over the last 20 years, in corporate North America, we've made significant advances in technology, manufacturing, product development, marketing – huge gains in corporate innovation, but, for some reason, sales has remained in the dark ages.
Why?

Who knows, maybe we just like to kick-it old school, but maybe, and more likely, companies have traditionally undermined the role and value of sales within their organization. If we dig deeper, and look at how most organizations evaluate sales and sales metrics, more value and focus is typically placed on sales outcome and revenue than sales effectiveness and strategy.

Understanding what's important and who's accountable

Let us explain – every company looks at the numbers, usually the most important numbers, gross revenues and net profit. Sales accountability is usually tied directly to these gross revenue numbers and don't get it wrong, sales should be directly accountable for gross revenues, however, what if we also indicted Marketing as being directly accountable for sales revenue.

If you're in sales, you're probably thinking "Marketing??? Marketing doesn't even understand what sales does let alone to think they would ever begin to be accountable for revenue!!!" and you're right, traditionally marketing has always been the star of the show with little accountability and sales has been little more than a necessary evil – that is, until the new customer successes start to role in.

Now let's theoretically employ a new standard of balance, the balance being a new measurement of determining sales effectiveness within an organization. In order to achieve this we have throw out traditional, linear sales process and adopt a non-linear approach to sales and marketing within an organization. Before you read any further, please recognize we are about to challenge the status quo and it might be easier for you to walk away right now before we upset your traditional values and views towards corporate sales and marketing.

Ok, disclaimer aside what do we mean by a new measurement of sales effectiveness?

To define a new measurement of sales effectiveness, we need to dis-align the traditional sales process. Instead of sales holding sole responsible for both prospect development (hunting) and closing sales opportunities (gathering) let's put the onus on marketing to take on the role to now handle prospect development. In this new function, marketing now becomes responsible for generating opportunities within the market – demand creation. Sales effectiveness is the process of defining the measurement criteria for marketing and sales performance indicators for your organization.

Marketing's role is now to develop a quantifiable, sustainable lead generation program for the company. There's a catch though, demand creation is an intense marketing effort, it goes far beyond the dynamic of providing a weekly report of names that sales now needs to follow-up with. Demand Creation is a systematic approach to understanding your buying cycle and how your organization manages prospects and customers through that buying cycle.

Integrating a Demand creation Strategy will allow you to track key indicators for determining your overall sales performance across the organization. It also creates accountability for your marketing effort like never before.

Demand creation doesn't stop there however.

Demand creation also requires marketing to take on the role of prospect management.

In most organizations sales is responsible for prospecting and engaging potential customers from the initial point of prospect contact. In a Demand creation enabled organization, marketing manages the prospect relationship to a point in the buying cycle where the prospect is identified as falling within a set of predefined parameters. Once the prospect has triggered these parameters, only then is the prospect delivered to sales and the elevated sales process of closing the opportunity begins.

What are some advantages of enabling a Demand Creation strategy for your organization?

1. Focus sales on customer acquisition and focus marketing on reputation build and prospect education.
2. Accountability for marketing expenditure. Campaigns and marketing spend can be directly attributed to sales effectiveness and revenue generation.
3. Sales and marketing departments develop a symbiotic relationship working towards a common goal of generating both sales and revenue.
4. A clearly defined process is created to identify and understand your prospect universe and how prospects are managed within your sales cycle.
5. Measurability. Every stage of your marketing and sales process can be clearly measured from creating prospect awareness through to proposals generated and sales revenue.

Marketing's New Role

We've taken you through the concept and strategy behind demand creation. For many individuals looking objectively at their own company, yes, demand creation does call for a paradigm shift for the organization. But how does it really affect the marketing role at a tactical level?

Demand creation calls for marketing to focus their marketing effort on building one-to-one relationships with prospects and customers. This requires clear definition of the prospect universe, as well as, identifying all of the stakeholders, influencers and decision makers within a prospect company and building direct relationships with them.

Tactical elements in marketing's tools box need to include direct marketing, email marketing, personalized URLs (PURLs), webinars and any other marketing vehicles that will assist in created that one-to-one relationship.

These tactical elements now equip marketers with the ability to create and manage direct, one-to-one relationships with your prospect universe. Advances in printing technology allow for creating customizable, fully variable direct marketing collateral. email and web technologies again offer the same level of personalization with the added value of tracking and statistics allowing marketing to measure campaign effectiveness while providing real-time, immediate response to prospect inquiries.

Getting Started and Creating Demand

The key to developing a successful demand creation strategy is communication. It's recognizing that sales and marketing need to work together to create and maximize sales opportunities and understanding that demand creation is ultimately about building relationships and eliminating communication barriers. You want the ability to create open, two-way communication with your prospects and customers the first time they become aware of your organization.

Every facet of your organization needs to understand the value and objectives of your demand creation strategy. Like many organizations throughout North America adopting Six Sigma principles, Demand Creation represents a quantum shift in the way your organization manages its strategic sales and marketing operations.

drive2 is a demand creation company. We develop performance driven, results-based lead generation and demand creation strategies for technology and services companies. drive2 focuses on demand creation strategies for organizations targeting domestic, Euro and Far East markets.

For more information on demand creation on how drive2 can work with your company, visit drive-2.com.