B2B customer strategies

The Beatle's classic song Come Together has been released by other legendary bands such as: Joe Cocker, U2, Aerosmith, Guns N’ Roses, Michael Jackson, and of course Marilyn Manson.  The chorus is simple, yet powerful:

“Come together, right now, over me.”

 I worked with a large manufacturer and services company who brought us in to design and launch a Customer Advisory  Council (CAC). I asked the Executive Sponsor and EVP, why was it important to have his top customers come together.  He rolled his eyes and proceeded to share an all too common story that starts with “My CEO met with the CEO of our  biggest customer and here's what …” 

The dream: This customer wanted them to build a solution that would change the industry. The customer convinced his boss (the CEO) to invest $100 Million in developing this solution, stating that the other 20 players in the industry had the same problem and would all but beg to have it.

The result: Two years after the release, no one including the original customer wanted this solution. The firm had rechanneled key resources down an innovation path that didn’t solve a problem or enable their customers to reach new levels. In the process, this company lost much credibility in the market, fell behind the competitors on developing solutions for real issues, and ended up writing off the $100 million investment. 

How common is this: All too often I have found CEOs or key executives have not had a single conversation with a customer or key industry person. CEOs and Executives have used their power to unilaterally and without validation from anyone else re-direct key people, dollars, and strategy only to be completely off base, setting the company behind.

The reality: Most products and solutions need a market, not just one customer.  It is critical to include more than one in the ideation, design, testing and launching of any key initiative. This goes for development as well as strategy, marketing programs, sales approaches, and pricing models. In fact, the only topic off limits is profit margin. Everything else should be filtered through a group decision makers…this is the key to sustainability and predictability.

Bottom line: Unless your offerings can be supported by a single customer, make sure to secure Collective market input and validation from the decision makers of your most important customers by having them come together, right now, over you!

It is simple: Everyone gets excited when a new customer is secured. There’s a celebration, bells are ringing, lots of recognition and rewards are handed out. Song’s like the Black Eyed Peas“BOOM-BOOM POW” or “I Gotta Feeling” are blasting in the hallways and everyone feels as though the most popular person in school just asked them to prom.

Been there, done that: How much celebration is there when a long standing customer renews for the 6^th straight year? Forget that they haven’t bid out the work in 3 years (no competition=greater margin) and they are already in your system (low cost of support, faster payment = greater cash flow).

It still only generates the excitement of going to prom with the back-up date and dancing to an old Richard Marx song. Yes you are at the prom, but that spark just isn’t.

Now the reality: It costs 3-5 times more to acquire vs. retain a customer. Getting your current customers buying more of your stuff means it’s harder for them to leave you (increased switching cost) and current customers are much less likely to bid out your work (increasing profitability). Shouldn’t you evaluate how your how you are spending your marketing dollars? 

Opportunity: Evaluating your marketing mix today and making the proper adjustments from acquisition to account growth can make a huge difference in top and bottom line results. Now that’s something the entire leadership team will be thrilled to hear about. 

Just maybe then you’ll become the most popular person in school (or at least the leadership team) and the CEO throws you the keys to the company G5 and backstage passes to the Black Eyed Peas.

Tom Webster, CEO of procurement outsourcer Intesource, invited me to attend their recent Summit in Scottsdale AZ (tough assignment, how could I pass that up?).

I went there to be that fly on the wall to see how it’s run, the value to the customer, the value to Intesource and to feel the personality and vibe of the summit.





Every attendee was greeted at the airport by someone from Intesource…for me it was Ashley as I walked out of the airport and Michelle, who drove me to and from the airport. Now I know there were things these folks could have been doing on a Saturday night other than carting me 40 minutes to the hotel.  At 11pm, I was the final pick-up after a very long day.  These two, along with Ashley’s boyfriend, were incredible. It became immediately apparent that they were so excited about this summit, the chance to see customers and were extremely proud representatives of the company. Ashley, Michelle and Kelly (and I’m sure many others), managed this event in world-class style.

The next day I walked into the welcome reception and I thought I was walking into a college reunion…witnessing old friends reconnecting.  I couldn’t tell the customers from Intesource.  The tone of the conversation was that of respect, trust and friendship. Clearly, the customers viewed Intesource as a trusted partner as well as an extension of their respective companies.  

One of the most impressive moments was when I had the opportunity to sit with the leaders of the customer service area.  They were equally proud and excited to be a part of this event with the customers they serve every day. They each had stories about customers as they passed where we sat.  The average tenure of the four I sat with was about 10 years, and this company is only 11 years old!  As the Director of Customer Service area, Erin Alstad, left to greet a customer, her husband, Sean, took the opportunity to share with me how much she loves the company, her job and helping these customers.  

At this point, I knew I was in the presence of a company culture CEOs dream of…and the next couple days would be a real treat.


When so many customers are gathered together, most firms feel compelled to sell, promote the company, etc.  Intesource not only stayed away from this, but actually let the customers define the topics and build the agenda.  Yes, the controls were turned over to the customer for the next two days.  Webster opened the meeting by saying, “This is your meeting and we’re merely the facilitators.”  For the balance of the meeting their presence on stage was very limited.  The customers owned the stage…sharing their stories, lessons learned and best practices.  Every presenter specifically mentioned a couple people from Intesource as instrumental to their success.  

The customers came very well-prepared and took pride in being educators to the balance of the attendees. Presently, Intesource services are concentrated in a few industries and there were many competitors in the meetings taking notes. But it didn’t affect the quality, insight, openness and generosity in sharing experiences.  Customers (who were real decision makers) were there to give and gain knowledge.  

Time and again at the breaks, customers would say “I didn’t know Intesource could do…” or “I need to learn how I can do that for our company,” These comments translate into huge revenue growth opportunities.  

One of their most long-standing customers announced in the last session that he’d been a customer for 7+ years and was attending his 4th Intesource Summit.  He then stated that he has "a whole list of new ideas I will be taking back to my company.”  

Giving up control=Idea sharing among customers = greater revenue.  

I  had a long talk with a prospect who was blown away with everything I listed above…I’m confident he and others will no longer be prospects.

 
Was there selling, product promoting and bragging going on about Intesource? Yes, there was plenty…it came from everyone, except the Intesource people.

This is the opportunity to turn customers into sales agents, educators, advocates and even friends! The way they engage their customer in mutually beneficial programs like this is the reason this company has doubled its customer base and revenue in the last couple years (in a brutal economic market).

Peggy Hicks from customer service told me that she looks forward to this all year, because she gets to hear the stories and spend quality time with those she helps -  mostly via phone - all year long.  I don’t think I’d find an Intesource person, a customer or a prospect who would disagree.
 

In front of a group of my friends, my 13-year-old daughter, Sarah, was asked what she wants to be when she grows up…her response: “I don’t know yet. I only know I don’t want to do what my dad does. It’s really boring.”  Ouch! If only I was a Starbuck’s Barista, Columbia Record Producer, Juicy Couture CMO, Apple i-pod designer or absolutely anything associated with the book and movie Twilight (or even looked like Edward). I’d be so cool with her and her sister Grace (also 13) and their friends around the Jr. High.

There is not much street credit in this circle regarding consultants.

Consumer firms are easy and straight forward, which helps us get our heads around a concept quickly, but as you will learn, also lack the depth and substance to apply to some of the different and often significantly more complex reality of the B2B markets. 

So while our friends, family and yes, even our kids may shrug at our B2B world with comments like, “that sounds really interesting and would love to hear more daddy, but I must get back to my homework,” take pride knowing what you do is making a difference, even though you get less respect than a "Key Grip" in the movie credits.

I was recently in Dubai for a client. Our goal was to raise the interaction and engagement of their customers in this high growth market. Even leading 100’s of these types of meetings before across the globe, this is the first time I’d stepped foot in the Middle East. The clients came from Jordan, Egypt, Syria, Lebanon, Saudi Arabia, etc. I honestly didn’t really know what to expect. How would this culture accept an American leading a meeting on how to serve the Middle East? The cultures are so different…I wanted to get them engaged as quickly as possible and not set these critical relationships back.

Honestly, I was more nervous than I had been in years doing this, due to the unknown. Were they going to think “Aggressive American” or that I didn’t get their culture, etc...?  The 24-hour journey over there was an anxious time.

These folks were incredible. They made me and my American and European colleagues feel very welcome and embraced the interaction and approach with humble enthusiasm. On the last day of the meeting, many came up to me and invited me to their country, work and homes. “I’m invited into your home?”  I was both honored and blown away. I never had been so far away and yet felt so welcome and at home.

People are people…and when we approach different cultures, societies, etc. that way, it’s amazing how quickly we can come together and how much we can accomplish. 

                           
 

Last week I attended the BMA (Business Marketing Association) National conference in Chicago. It’s always about the people at events like this, and I met some very smart, personable and fun people (note picture).  I found the event well- run with content that was solid for a mid-level B2B marketing professional. I was there to hear some of the latest ideas our industry thought-leaders had to say. While some were a bit lazy in their presentations, (primarily the book authors using 2/3 B2C examples… translation: stock presentations), most were well- prepared and current in their messages.   There were many very good panelists. I was also very impressed with the following Keynote presenters:

♦      Ralph Oliva, Executive Director - ISBM:  Greatest overall depth of B2B knowledge

♦      Kendall Collins, CMO- Salesforce.com: Best proof of successful B2B integrated sales and marketing strategies with results

♦      Patrick Crane and Steve Patrizi, Vice Presidents -  LinkedIn: Most practical application of social networking for B2B firms

♦      Sam Sebastian, Director- Google: Best forecast of search evolution relative to B2B professionals (and didn’t bash Yahoo or MSFT)

The leaders of the conference have a real opportunity to step up the value by having CFOs and CEOs provide their perspective on how the marketing organization can provide the greatest value to the organization.  We have a way to go to bring the B2B marketers' effectiveness to par with our B2C counterparts, and it all starts with Unlearning the tactics in the B2C world...they don’t work in our world. We must learn and apply B2B principles with rigid discipline like Salesforce.com.  

In the B2B arena, our research has shown that organizations can sustain, dominate and become higher earning by leaving customers in the dark and out of the loop as much as possible. Their input, suggestions, and guidance simply add unjustified costs, increases time to market and gets in the way of doing it the way we want to. The only thing you should take from your customer is their money! The End!

APRIL FOOLS!! Learn more about April Fools day pranks!!

Now, back to reality and a true story: One firm ($10+ Billion firm whose 20 biggest customers were 50% of their revenue) I talked with had some very interesting perspectives. The EVP of Product Development shared with me that, “Sean, not only do I know the answers to what the customers are thinking, but I know all their questions. So there is no value in talking with them.” His CEO later told me that flying to meet with these customers was a waste of time, and he refused to do it anymore. He did offer that if they all came to HQ, he would be willing to meet them for lunch or dinner. These are customers who spend from $200- 600 million / year. The nice thing is they were an aligned organization: They all honestly believed that the customer had no value but to buy what they told them to buy.

This firm was bought by a huge firm who is extremely customer centric, forward thinking, best-in-class on revenue and earnings growth…a Wall Street darling due to the year-over-year consistent results. Needless to say, the CEO and Leadership lasted about one week.

And while April Fools is a joke, let’s not turn your business into one.

Last week I helped design and facilitate a meeting between one of my clients and a group of important customers. This was the fifth meeting of this group over the last couple years. The entire LT (leadership team) had turned over in less than six months. And yes, I was the only person, between my client and my team, to have attended all the meetings. To top it off, the entire organization and industry are being completely redesigned and defined.

While I was confident the meeting would be beneficial, there was a bit of concern on how the customers were really going to respond and react to all the changes. They had become close to the past leaders…the leaders had earned their respect and trust.   

From both parties perspective (new leaders and key customers), the meeting was a huge success. What made the difference out of the gate was the fact that the ideas, advice and input that this group of customers had given in previous gatherings was still on track and moving forward. Yes, this group of customers actually helped provide continuity of this key business unit. 

Secondly, the new LT had done their homework preparing in advance and was actively listening, asking questions, probing, and writing down responses. The customers took notice and quickly embraced the new LT.

The final thing it accomplished was to accelerate the new leadership team’s understanding of this market…And by having the new team there together, it helped align them and their priorities to take this business to the next level much more quickly.

I met with a client who, like most organizations, has a large sign in the lobby of HQ that states their priorities along with a picture of the CEO beside it. The first priority listed is about listening and responding to the customer needs.  Naturally, this message made me feel as if I had just read a Robert Frost poem or heard some classic Dave Matthews music. 

Later that day, we were planning for an upcoming Customer Advisory Board meeting to be held at HQ. This meeting includes many of their biggest and most important customers. While wrapping up the day, our client mentioned that the CEO wasn’t planning on attending the meeting. Crazy, you say??? This is more typical than not. It’s easy to communicate “we are customer focused”…it’s another to lead and live it.   

The CEO could just simply stroll down the hallway to the meeting room and directly listen, engage and interact with the biggest customers. So why doesn’t she demonstrate to the 1,000 other employees the values and priorities listed in the lobby, Annual Report and company town hall speeches…?? Well, copy writing is much easier than changing old habits.

But then again, she’s always loved the standby “Roses are Red” poems and Richard Marx music.

While on vacation I saw the “Blue Man Group” in Las Vegas. I was fascinated with how they completely engage the audience the entire show. They added the extra dimension by extending out to the customers throughout the show (walking around, paper all over, personalizing the experience, etc). In 90 minutes they actually established a relationship with the audience. You left not only enjoying the performance and liking the people in the show, but rooting for them and actually having an emotional connection to them. 

In most organizations, the score card is “Did we do a great job?” This should be a given. Now, to drive loyalty and penetrate deeper, the additional goal is to establish that emotional connection. This is what makes for internal champions that renew, buy more and become extended sales people for you to acquire new sales.   Think Blue!!

This year one of the themes for me and my organization is to not get “Activity confused with Results.” This happens more than we care to admit, especially in the marketing and sales part of many organizations. People stay very busy all day long with email, calls, meetings, etc. but when I ask people, “Are the activities you did yesterday (or last week or month) the best use of your time to meet your or your firm’s priorities and objectives?” - most of the time the answer is an apologetic "NO." 

So why is it that in this “do more with less” environment, we don’t take the time to organize, prioritize and focus our efforts on those which will deliver results? Why aren’t we taking the time to “plan the work and then work the plan?” And how far up the organization is this pattern happening? Now that’s the $64,000 question!

For instance, in this environment, what are we doing to maintain revenue by retaining our current customers, identifying ways to sell these customers more and seeking referrals and introductions?  With new customer acquisition cost at premium, it’s a very logical plan. 

As marketing and sales leaders, we need to factor market conditions into sales and marketing plans. By doing so, you’ll have a much greater opportunity to keep more of your budget. You’ll also need to show the return on the programs. And you’ll need to track and report in a simple and credible way.

This planning and focus will allow you to provide clear direction to your marketing and sales teams that is tied to goals and objectives that will truly affect results.

Last week,  I attended a sales training program that focuses on how to sell effectively to senior level executives.  To do it right, it takes a lot of preparation on the person, firm and industry. One stat that stood out was  the average deal when you “start” at the following levels:

Purchasing: $10k
Department head/Director: $40k
Vice President: $87k
Sr. Executive: $115k

Source: Research of 70 organizations by The Marketing Group (DBA: Selling to the Executive Suite TM), Dallas TX

It seems that quality is a much better approach than quantity. Calling as high as you possibly can in an organization is critical to the sustainable success of revenue, margin and retention. Most firms go where they are “comfortable”…at user levels (who love you, but have little influence) or purchasing because it’s easy to respond to RFPs.

By calling higher in the organization, you have the opportunity to understand the business issues, the current gaps and aspirations, assist in the design…have the inside track to the biggest slice of pie possible.  This allows you to ultimately move from transactional deals to long term partnership engagements.  And partnership relationships provide greater predictability and consistency in revenue and cost forecasts. You’ll also find this to be much more exciting and fulfilling professionally with an added benefit of having the ability to recruit and retain top talent.

By the way, I highly recommend this class. The leader, Brad Stribling, is top notch.

Today I was on a conference call with seven B2B marketing executives discussing their customer programs. They are all having their budgets scrutinized, with many already having a “no travel” policy in place. The exceptions are the significant customer programs (Customer Advisory Boards, Summits, etc) with their biggest customers.

This is a wonderful opportunity to collaborate with the sales organization to help them retain customers and drive revenue. In addition, we discussed that the content needs to illustrate unquestionable value for all parties customers and the host organization. 

One marketing executive mentioned that they are trying to blend strategic planning with their top customers and their programs. And by allowing the customer to have the opportunity to influence strategy, it is certainly bound to increase customer retention.

In the B2B world, customers are raising their expectations of how suppliers interact with them. In the most recent CEO study by IBM, this was one of the five key findings. In order to continue to be a valued supplier, customers want their suppliers to bring ideas to them…help them solve problems and enable aspirations. This is a huge opportunity for firms to break out of working through purchasing, eliminating competitive situations, and enhancing long term customer loyalty. 

Here’s the catch: you MUST be building relationships with decision- makers. That is where true problems get identified and solutions get funded. Most organizations are “too comfortable” calling on the user and influencers and hope those people can/will sell the ideas internally and get funded. 

Check it out: http://www.ibm.com/ibm/ideasfromibm/us/ceo/20080505/

In February’s edition of Harvard Business Review, there is a wonderful article titled, “Seize Advantage in a Downturn” by David Rhodes and Daniel Stelter. They outline a number of activities to do during a recession…The top actions listed under “Aggressively Manage the Top Line” include:

1.       Revitalize Customer Retention Initiatives

2.       Reallocate marketing spending toward immediate revenue generation

I find many organizations don’t tie these two together like they could. Under any market conditions, this should be the priority, but in recessionary or perilous times, it is a must. The way to hold the line on top line and profits is to identify ways to retain your current customers (3-5 times less expensive than acquiring new customers) and sell them more. Additional sales to current customers are typically much more profitable. This is due to many factors, including: usually less competitive, faster to revenue recognition: and the more you sell to any customer, the more difficult it is for them to discontinue your services.

Check out the article and see how other firm’s are applying these principles effectively. 

http://hbr.harvardbusiness.org/2009/02/seize-advantage-in-a-downturn/ar/1

In a few weeks, I'll be presenting at a conference for CFOs.  As I prepare for this, I'd like to know how you (as a sales and marketing leader) interact with your CFO (or equivalent).  

Here's where you can contribute and help: 

1.  What are the questions or discussions you have around programs and strategies for customer retention?

2.  What is their expectation on justification?

3.  What are the measures of success?

4.  What is it that works best with them?

5.  What frustrates you the most in dealing with them?

Any perspective will help developing the story I will share with nearly 200 CFOs.

In considering the session title, it may be something like: "CMOs are from Mars, CFOs are from Venus"...with your help, this should be very interesting and fun!

I'm Sean Geehan, Founder and CEO of Geehan Group.  I'm excited to launch my blog to be able to directly engage with other professionals who are charged with maximizing your organization's sales and profits by designing, building and managing effective customer strategies and programs.  Together, we can all get smarter by sharing our stories, experiences and advice.

You can read my bio: http://geehangroup.com/index.php?option=com_content&task=view&id=24&Itemid=52

I welcome any questions you have on the subject. And while I’m certain I don’t have all the answers, together we’ll get there much faster. Whether it’s customer retention, customer growth, key account planning, market alignment, customer advisory boards, executive support of customer programs, etc, I’m happy to participate in a forum which is open and shares ideas, best practices, case studies, advice for anyone involved with similar responsibilities.