Is the Revenue Decline at Oracle a Blip or a Sign of Major Industry Shift?

What’s happening at Oracle isn’t isolated.  It is a symptom of what looms largely ahead for the information technology industry.

According to the Wall Street Journal's Don Clark and Steve D. Jones in WSJ's CIO Journal, Oracle blames its sales force for the decrease in sales…WOW!  But, it’s true. Oracle, and the other technology companies who have been kicking everyone else around, have made their bread and butter selling to IT leaders.  These IT leaders are also by definition, "leaders in IT."  As buyers, they understand and can translate the bits and bytes of technology offerings. They make the final purchase decisions and oversee implementation and support.  They also get to be their own judge and jury by defining their own success criteria, which are typically the factors most relevant to IT (uptime, response rates, etc.).

With technology solutions migrating from in-house applications which are purchased and managed by the IT department, to cloud and other delivery platforms outside the data center, purchase and evaluation decisions are being made by the business unit leaders the IT leaders have traditionally supported.  And also by definition, "leaders in business" have a completely different way of analyzing, managing, and buying the services that support their business.  My favorite quote so far which highlights the difference between IT and the new untraditional buyers of technology comes from Michael Hickins, the Editor of The Wall Street Journal's Morning Download, “Indeed, many of them are heads of marketing who used a credit card to pay for cloud based marketing automation or reputation management applications."  According to Nucleus Research Inc. analyst Rebecca Wettemann, "Among that customer set, 'there’s some trepidation' about dealing with Oracle."  Again, WOW!

Change of this magnitude and pace may rewrite the entire IT ecosystem and power structure.  Oracle out, Workday in?  Not yet sure where to place the bets, but the opportunity couldn’t be bigger for those who can translate the facts and figures of technology services into a vision that inspires the hearts, souls, and ROI targets of business (versus IT) buyers.  As such, I will be sure to use my AMEX to pay for our new IT system and make sure I get all my Delta Frequent Flier miles too.

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How a Customer Advisory Board Can Help You Prepare for 2013

A Customer Advisory Board (CAB) is a high-return, high-profile event that can heavily influence your company's competitive standing. A successful CAB provides a powerful format that turns customers into true advocates and provides executives with the information needed to align customer programs with company strategy. A formal Customer Advisory Board should be in your marketing and strategic arsenal for 2013.

A well structured Customer Advisory Board is a proven and dynamic program that helps executives and decision makers develop a deep understanding of market conditions while simultaneously building relationships with key customers. A CAB is the perfect avenue for B2B Companies that have more than 60% of their sales with their top customers to receive relevant feedback that can be used in strategic business planning. A Customer Advisory Board not only helps your organization retain your most profitable customers, a CAB will help increase revenue opportunities within your customer base.

A Customer Advisory Board creates a platform where you can leverage happy customers and drive innovation through customer co-design and collaboration. The end result is an overall market alignment in offerings, communications and strategy that will prepare your organization for profitability in 2013 and beyond.

 

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Strategic Planning with Marketing and Sales

In my book, B2B Executive Playbook, I describe four steps that can simplify strategic planning, focus product development and sales and marketing efforts, and, most importantly, create a clear path to market leadership.  If implemented properly, it will also add sustainability and predictability to a B2B company’s top and bottom lines. 

As with any corporate initiative, however, success can be sidetracked if problematic modes of operating and behavior creep in.  Over my next four blogs, I’ll cover each of the top four common pitfalls that prevent B2B firms from succeeding; Inside-Only Thinking, Limiting Input to End-Users, Following a single Customer, Chasing the Competition.   Be aware of them, and act quickly if they surface in your company.

Pitfall #1: Inside-Only Thinking

The first pitfall is a mindset among the leadership team that goes something like this: “Hey, we’re smart and we’ve been in this industry for many years.  Let’s brainstorm among ourselves (internal off-site meetings) and come up with the next great solution that we can bring to market to change the game and win back our leadership position.”  The leadership teams of B2B companies do have deep stores of knowledge and creativity, but when they choose to go it alone, what they are really saying is, “We know better than our customers of what they want and need.”  And this is a prescription for failure or even disastrous results.

Far too often, the inside-only ideas and solutions that come out of these sessions are not created with current market conditions or even company resources, business models, and competencies in mind.  In fact, they are usually based on legacy customer needs, structures, business models, current competitor offerings, or misguided ideas about a problem that may not even exist in the customer’s mind.  This insular mindset and culture significantly contributes to the 60-70 percent product failure rate that continues to plague companies.

Case:  The leaders of a $1 billion company invested over $100 million in developing a single solution that they were convinced would revolutionize their market.  They did this without including of vetting the idea with a single customer.  The result was disasterous.  Virtually no customers wanted the solution because it couldn’t be integrated with their existing operations, and the few who did buy, demanded to return it for a full refund, plus damages.  The stock tumbled, the leadership team was fired, and the company was sold off at a major discount to a company one-fifth its size.

Successful B2B companies avoid inside-only thinking. At Henny Penny, for example, all innovation and planning initiatives begin with the needs of customers and the market.  “This is the backbone of our culture, strategic planning, and success,” explains Rob Connelly, CEO of $148 million Henny Penny Corporation, a family-owned manufacturer of food service equipment.  “It has enabled us to hold on to and grow our biggest customers for decades, because our plans help them serve their customers more effectively.  We work extremely closely with our top customers.  Our design and engineering teams share ideas, collaborating to provide new solutions, solve problems, or change the game.” 

One of the home runs at Henny Penny was the development of revolutionary low oil volume (LOV) fryer for McDonald’s Corporation.  “We’d been studying innovative ways of improving and shortening usage in the frying process for quite awhile,” recalls Connelly.  “Together with McDonald’s, we developed a breakthrough product, which not only yields significant cost savings, but is also easy to operate and minimizes environmental impact."

The LOV fryer earned Henny Penny the prestigious McDonald’s Global Innovation Award in 2008.  In 2009, MacDonald’s named it Worldwide Equipment Supplier of the Year and in 2010, Worldwide Equipment Partner of the Year.  That’s the kind of market clout and credibility that can’t be bought – and it led to even more sales.  In addition to sales opportunities at McDonald’s 30,000 restaurants worldwide, Henny Penny applied these innovations to stock models that were successfully rolled out to the small and mid-sized restaurant marketplace.  

Bottom Line:  With so many strategic and development alternatives to chose from, you must tap your top customers to prioritize, justify, and focus on the opportunities that will deliver the most impact.  Leveraging their industry knowledge through collaborative “outside-inside” thinking is the only way to secure true market alignment that drives Sustainable, Predictable and Profitable Growth.

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Why is Customer Advocacy Necessary for B2B Businesses?

The need for customer advocacy and its tremendous potential in business success is only recently being realized by businesses across the globe. In a nut shell, by integrating Customer Advocacy into their long-term strategic goals, businesses can enjoy higher levels of customer satisfaction, customer retention, and profitability.

What is Customer Advocacy?

Customer advocacy is a process that has essentially originated from customer services. The aim of customer advocacy is to focus on the various things that customers are most interested in, or that the business thinks are of immense appeal to them. Customer advocacy essentially redirects the strategic focus of the underlying culture of the business so that it becomes more customer-oriented or customer friendly when devising its marketing techniques and customer service agenda.

The Role of Customer Advocates

A customer advocate essentially serves as a liaison between the business and the customer where they focus their efforts on facilitating both the sides. A successful and effective customer advocacy business model is usually one that covers all facets related to customer contact. This can include products, sales, services and complaints. As a result, customer advobookcates are trained in a myriad of cross-functional roles so that they are well-equipped to assist valuable customers in all areas of the business.

Evolving Satisfied Customers to Advocates

The B2B Executive Playbook is a tremendous resource that discusses case studies of several B2B organizations that have successfully evolved satisfied customers to advocates through customer programs such as: Customer Advisory Boards, Executive Sponsor Programs, and Executive Summits to achieve sustainable, predictable and profitable growth.

 

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Want to Improve Customer Engagement? Get Personal!

Have you ever read something that rubbed you the wrong way, but you couldn’t quite figure out why? That happened to me earlier this week when I came across a blog post on the Forbes CIO Network,  Written by John Dillon, CEO of Engine Yard, the premise is that “it’s time for business leaders to take a closer look at new opportunities for improving customer engagement…” and that “information technology is a great place to start.”

I read it four days ago and it has been gnawing at me ever since! I agree and I disagree. Something about it just didn’t sit right with me! My initial reaction was “what a bunch of bologna. You can’t improve customer “engagement” via the cloud!” Or could you?

So I did a little research. I explored the idea of customer engagement. I looked up the definition. I re-discovered a couple of articles I had previously read on the subject. I came to the conclusion that my struggle with this article was not so much the content, but the terminology Dillon uses. He uses the term “customer engagement” the way I use “customer experience.” In my mind, “customer engagement” implies a personal relationship, as in “engaged” to be married.  In my mind, “personal” and “cloud” simply do not go together, which is why I struggled so much with his article. So I read the article again and replaced the word “engagement” with “experience” and “connection.” It made much more sense to me that way, and I now understand what Dillon was saying.

In my mind, the only way to improve customer engagement is to get personal! Why is that so hard to understand!? In a 2010  survey of how marketers view their customer engagement strategies,  Forbes found the following:

  • 97% of survey respondents said their companies viewed the issue of engagement as very (67%) or somewhat (30%) important.
  • 86% said engagement is part of the ongoing conversation between marketing and top corporate leadership.
  • Marketers know that engagement is intrinsically linked to customer loyalty and retention.
  • 72% want repeat purchase behavior
  • 69% want customer advocates
  • 95% want to optimize their engagement with customers

But… they are unclear about how to accomplish it. Many have no specific strategy. 33% rated their current efforts as just fair or poor. Surprising, when asked to assess their various marketing tactics in terms of how deeply they engage customers, 48% of the marketers surveyed indicated that in-person and permission-based methods had the highest engagement. But they still don’t know how to foster deeper engagement? I don’t get it. It seems like a no-brainer to me!

The issue of engagement is important! So, if you want to improve customer engagement, get personal! The cloud and social media are great ways to communicate with your customers and to improve the customer experience, but they are impersonal. To really “engage” with your customers, you need to develop a personal relationship. Reach out to them on a personal level. Get to know them. Get personal!  

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Mom’s Almond Sheet Cake and World-Class CABs

Every time my mom makes her famous Almond Sheet Cake, it wins the crowd over.  Everyone loves it (especially me and my dad)…and everyone wants to know, “How can I get this recipe?” 

Many people ask how their Customer Advisory Board (CAB) compares to others…or, how do they know if they are maximizing their CAB initiative.  So here’s a quick litmus test I came up with for Executives and CAB leaders alike to see if their CABs have the right ingredients to blow people away, like my Moms sheet cake.

 

 

  1. Ongoing vs. Event – many companies treat the CAB like a customer event.  We did it – it was a valuable 2 days!  The customers had a great time, etc.  Ongoing means that issues discussed will be evaluated, explored, and tested, and results reported back.  In addition the CAB members will be involved between meetings to assist, validate, test, etc.  There are usually email updates, member team calls and even sub-committees which advance specific and important issues.
  2. Strategic vs. Tactical – what areas of the business do the CAB discussions address?  If it’s feature/function, short-term, tactical, Executives rarely stay committed or engaged and begin to question long-term benefits.  If it’s viewed as part of the strategic planning process – identifying game changing acquisitions or transforming business models which provide the organization a competitive advantage – then you have something special.
  3.  P&L owner vs. sales or marketing sponsored – in order to achieve world-class, CABs must be sponsored and driven by a P&L leader (CEO, BU head, Geo President).  These are the ones whose net is cast wide enough to drive cross-functional change.  This makes integration into all go-to-market functions much more realistic.
  4. Decision Makers vs. Users – this is the final and most important ingredient to a world-class CAB.  They must have true decision makers (DMs) actively participating, engaging, and contributing.  These in-depth discussions provide rich insight, context to how DMs think, act, evaluate, etc.  Let’s face it, how many DMs take time to complete VOC surveys, satisfaction polls, etc.?  Without this viewpoint and sounding board, organizations are left to extrapolate from the user viewpoint, plan in a vacuum or simply follow the competition.  

These key ingredients are the recipe to a World-Class CAB.  For the sprinkle, dashes and timing of these CAB ingredients, read the blogs my colleagues at Geehan Group have put together.  As for my mom’s almond sheet cake recipe, send me an email and I’ll send it to you.     

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Why Listen to the Voice of the Customer?

If your organization wants to spearhead continuous improvement, it is absolutely imperative you first identify the major factors that are important to your customers and what motivates them to stay loyal to your business.  We all hear this commonly referred to as "listening to the voice of the customer," and most businesses are willing to go an extra mile to find and identify the voice of the external customer.  Once found, however, what do you do with it?

Improve Retention through Alignment and Closing Gaps. The primary concept of listening to the voice of the customer requires a business to first assess and determine whether a business process is achieving optimum efficiency and, more importantly, reaping maximum returns.  Where customers are generally concerned about the effectiveness of a particular process, businesses tend to focus more on optimizing the efficiency of their process.  Listening to the voice of the customer helps close that gap so you don't continue to improve upon something your customers will eventually retire or replace because it does not meet their business needs.

Improve Product and Service Development. Through regular discussions and brief interactive sessions, businesses are able to collect invaluable information and details on the most important needs of their customers. The business can then deploy resources to mold generic needs of customers into specific products and services, sometimes known as “critical-to-quality” requirements or CTQs. The business can then analyze the new product or service to establish whether the CTQs are aligned with the requirements of the customers.

The Voice is a Chorus, Not a Solo.  When seeking out and listening to the voices of your customers, use caution when relying upon one or two strong altos or sopranos.  All too often, a customer can inadvertently use its influence and purchasing power to enlist support of its own needs, which may not necessarily be the needs of a large share of your market.  To avoid sinking R&D dollars into an initiative that only one or two customers will buy, organize a customer advisory board or council to facilitate interaction between your executives and a group of customer decision makers who represent a larger segment of the market.  Listening to a group of decision makers together allows businesses to gain insight into the requirements of a collective of customers in order to effectively identify and translate their needs into meaningful and profitable results.

In order to achieve long-term sustainable growth, a business must have the capacity to effectively identify and listen to the collective voice of the customer through ongoing, interactive sessions.  As obvious as it may sound, customers will play a crucial role in the overall development of the business as well as its long-term success - as long as you are willing to listen to them.

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Mid-Year Review: How are Your Marketing $$ Being Allocated by Audience?

As I discussed in my last blog, Mid-Year Review: How are Your Marketing $$ Being Allocated There are two ways to evaluate your marketing spend.  We typically see a disproportionate amount of spend in two areas, segment and audience. I discussed marketing spend by segment in my last blog, now let’s discuss by audience. 

Audience

When we evaluate marketing leaders spend by audience, we also see a disproportionate amount of spend.  We typically see:

  • 70% of the dollars/resources being spent at the user level

  • 20% at the influencer level (director/vice president)

  • 10% at the decision maker level (the person that actually has the purse strings to approve your product/services)

     

If these numbers look familiar in your marketing department and the company’s not hitting its growth numbers you have to ask yourself, what kind of changes do I need to make?   Clearly, all three levels are important.  However, some tweaking may need to be done to gain the growth your company needs.

The greatest return on investment for a marketing leader is to focus more of the marketing spend and resources on the retention side of the equation as well as find ways to engage the decision maker level in a meaningful way.  The tangible results will be increased growth, retention, loyalty and reference-ability. 

With these results, the CEO will gladly give you a true seat at the executive table because you are focused on the business and driving results.   Wishing you great success in the 2nd half of the calendar year!

 

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Mid-Year Review: How are Your Marketing $$ Being Allocated?

Chief Executive Officers think that their marketing leaders are focused too much on the creative “arty” side of marketing vs. the business helping the company drive results according to a study by the Fournaise Group.  We are fast approaching the mid-point of the calendar year where companies start scrutinizing budgets and resources if they are not achieving their planned growth.    As marketing leaders, this is the perfect time for you to be proactive and evaluate the results your team has delivered and how you may want to re-allocate the precious resources and budget you have to achieve greater results.

As you begin to review your marketing budget, take a look at how your dollars are being allocated.  After speaking with various marketing leaders, I have found the spend disproportionate in two areas:

1.       Segment

2.       Audience

Segment

If you look at your marketing spend, what is the segment that is getting most of the dollars?  Is it acquisition of new clients or retention of existing clients?  I find that most organizations get more excited about winning a new client than retaining an existing client.

When I do assessments on marketing spend I find that on average 60% of the marketing spend is on acquisition of new clients and 40% is on retention.  I would argue that it should be reversed to be successful.  Sixty-percent of the marketing spend should be focused on retaining your current clients.  It’s been documented thousands of times, that the cost to win a new client is more expensive/costly than retaining an existing client, yet when it comes to where the marketing dollars lie. It’s no wonder organizations are still trying to figure out retention and loyalty!

Ask yourself, who would the CFO be more pleased with, the person that brought it in a new deal at low margins and leveraged numerous resources to win or the person that renewed a client at high margins that used fewer resources?

In my next blog I’ll talk about Mid-Year Review:  How marketing $$ should be allocated by audience.

 

 

 

 

 

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Accelerate Sales in a Decelerating Economy

In today’s economy factors like increasingly shrinking budgets, fading staff and an incredible rise in competition for even the most minor of sales have created the need to make use of opportunities and resources as thoroughly as possible. In a nutshell, most companies have to find a plausible way to produce an increased number of better qualified leads with half the amount of people and a lot lesser resources than the number actually required.

How will you Accelerate your Sales?

With the threat of downsizing looming around the heads of employees in any basic firm, the whole concept of ‘working smarter’ has become the lifeblood and sustenance of employees in a work place, given the demand of efficiency despite the sparse budget and abysmal headcount.

What are the best tips for Accelerating Sales

There are some ways in which you can efficiently cause accelerating sales which benefit your company and its employees. These include Customer Advisory Boards or Councils and Executive Summits

Customer Advisory Boards (CAB) or Counciils (CAC)

A Customer Advisory Board is a high-return, high-profile event that can heavily influence your company's competitive standing. A successful CAB provides a powerful format that turns customers into true advocates and provides executives with the information needed to align customer programs with company strategy. A formal Customer Advisory Board should be in your marketing and strategic arsenal.

Executive Summits

Executive Summits are one-time centralized or regional events – that bring key decision-makers together to preview a strategy, product or market innovation. Through these focused exchanges, customers become first-to-know, first-to-buy and first to advocate your solution in the marketplace.

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