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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Achieving Client Loyalty in B2B World Event Summary

Earlier this spring, Kim Hammond (from QTS) and I had the opportunity to present at the Loyalty 360 Engagement Expo.  The audience was highly engaged as we talked about some of the common challenges organizations face Achieving Client Advocacy in the B2B World.  The top five challenges discussed were:

1)       Being focused on the wrong customers

2)       Being focused on the wrong level within accounts

3)       Disproportionate marketing spend

4)       Retention

5)       Profitable growth

As we shared there, building true advocacy comes from engaging your most important accounts at the decision-maker level in a meaningful way.  Market leaders must consider the opportunity of shifting their marketing spend to 60% on retention and 40% on acquisition.  In most organization, the reverse is the case.  In addition, investing 35% at the decision-maker level of the most important accounts will provide marketing leaders the desired retention and profitable growth.

I was energized by Loyalty’s research that came out in 2012 for marketers.  Their research shows the top two objectives for marketers in 2012 are, 1) customer retention, and 2) profitable revenue.  This reinforces what the IBM CEO and Fournaise Marketing Group studies said, which basically came down to marketing leaders need to be focused on the business, not the brand.  They need to focus on building the ROI if they want to earn a true seat at the C-suite table.

Cheers to a sustainable, predictable and profitable 2012 for all marketing leaders!

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Achieving Client Advocacy in the B2B World

This week in Orlando, Kim Hammond (from QTS) and I had the opportunity to present at the Loyalty 360 Engagement Expo.  The audience was highly engaged as we talked about some of the common challenges organizations face Achieving Client Advocacy in the B2B World.  The top five challenges discussed were:

1)       Being focused on the wrong customers

2)       Being focused on the wrong level within accounts

3)       Disproportionate marketing spend

4)       Retention

5)       Profitable growth

As we shared there, building true advocacy comes from engaging your most important accounts at the decision-maker level in a meaningful way.  Market leaders must consider the opportunity of shifting their marketing spend to 60% on retention and 40% on acquisition.  In most organization, the reverse is the case.  In addition, investing 35% at the decision-maker level of the most important accounts will provide marketing leaders the desired retention and profitable growth.

I was energized by Loyalty’s research that came out in 2012 for marketers.  Their research shows the top two objectives for marketers in 2012 are, 1) customer retention, and 2) profitable revenue.  This reinforces what the IBM CEO and Fournaise Marketing Group studies said, which basically came down to marketing leaders need to be focused on the business, not the brand.  They need to focus on building the ROI if they want to earn a true seat at the C-suite table.

Cheers to a sustainable, predictable and profitable 2012 for all marketing leaders!

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Driving Exponential Growth with your Existing Customers

Gary Vastola, Vice President of Field Marketing & Service Support from Xerox and I participated in a Whale Hunters Expert Series call last week. The call and discussion was focused around the common challenges companies faced as they closed out 2011; flat sales, retention, and customer satisfaction issues. growth

As we kick off the New Year companies want to turn the tide towards exponential growth.  The quickest way to achieve exponential growth is by focusing on your most important customers at a decision maker level.  That sounds so simple but so many companies become distracted trying to do that with all their existing customers. The truth is that all customers are all not worthy of that type of attention and resources.  As we all know, if you don’t prioritize your efforts than the efforts get diluted and so do the results.

Once you have focused on your most important customers at a decision maker level, the next question is what do you do with them?  The days of “howdy calls” are over.  You remember those days, an executive comes in to visit one of your important customers and basically the executive takes them to breakfast, lunch or dinner or meets in their office to introduce themselves and talk about sports and something else that is meaningless.  The executive leaves and the customer executive is thinking nice guy, but I don’t have time to waste doing that again. One way to engage your decision makers in a meaningful valuable way is through an Executive Sponsor Program (ESP).  An ESP is that one on one relationship (executive to executive) that is outside of any sales transaction.  When launched well, the results are undeniable.  

 

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Achieving Inaugural Customer Advisory Council Success

 Are you on the “right stack” of mail?   Stack of Mail

When you are doing something new, you fall into the classic “you don’t know, what you don’t know”.

 When you are planning your inaugural Customer Advisory Council you need to ask yourself….are we on the right “stack of mail”?  To set a Customer Advisory Council up for success long term you need to be focused on three main things:

  1. Business Alignment – Alignment surrounding the priorities, content, members and outcomes gets the team focused around driving the results you desire.
  2. Sponsorship – Who is your overall program sponsor?  If you don’t have one, you need to find one or you will not be able to keep the council headed in the right direction over the long-term.
  3. Insight Execution – Gaining the right insight and executing on this insight is vital to success.  Insight execution is a lot like strategic planning.  You have to decide and communicate what you will and won’t do back to your members as well as internally within the company.  

I have observed several organizations spend valuable time, money and resources focused treating this like a trade show event.  They are more interested in the “glitz and glamour” then on making sure they have the foundation build for long term success.  Three of the most common pitfalls when setting up an inaugural Advisory Council are:

  1. Finest Resort– Selecting a fabulous location is great to get your members to the first meeting, but it won’t keep them coming back.  You have to set the right environment in the inaugural meeting and execute on what you heard to keep them coming back.  There is no need to spend $450/night for a hotel room.
  2. A/V and Travel companies- A successful Advisory Council meeting does take a lot of work, however, hiring an A/V company and/or a travel company to manage 14-16 people is not necessary.   If you plan for enough in advance, you will have the resources to handle the logistics for the meeting.  Your most strategic customers don’t want a production.  They want an intimate environment with you.
  3. Expensive Gifts– Buying your customers expensive gifts is not necessary.  Companies waste so much time here.  Your most strategic customers aren’t coming for the gift or a fancy glass name plate.  They are coming to spend time with your executives to learn and share insight.

When you stay on the right “stack of mail” and focus on building internal alignment, sponsorship and insight execution you will set your council long term for success.

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2012 Planning - A Golden Opportunity

Have you ever experienced a “moment of fame” when everything you need for your business to succeed comes together perfectly?   It doesn’t happen often, but when it does, it’s “golden!” 
What if you were able to take those “moments of fame” and make them a consistent practice within your organization?  Customer Engagement Programs provide the opportunity to do just that.

Recently, my client experienced one of those moments.  After conducting an Advisory Council meeting with the decision makers of his most strategic customers, he gained invaluable insight into the market, learning what his customers need, and what they are looking for from his organization.

As a member of the executive team, he walked into a strategic planning meeting with the CEO and his peers, armed with information no one else had—even better, it was validated by his most strategic customers:

  • Sunset a core product in mid-term development – a savings of $8 dollars in future development, marketing, sales, and service, not to mention resources that can be devoted to high impact products.
  • Eliminate a new solution from the product roadmap – a total savings of $3 dollars, six months in development and valuable resources.
  • Get positioned to make an acquisition – of an innovative services company.

Gaining insight from your top customers provides a tremendous amount of confidence to participate in your organization’s planning process.  Sharing this information among the leadership team was a “moment of fame” for my client.  His CEO responded, “I’m so impressed by your knowledge this early in our planning process.  You are months ahead of your peers.”

When it comes to internal planning make no mistake—you are competing with your peers for resources and dollars to make the best decisions for the organization.  As you prepare for 2012, part of your plan should include gaining market insight at a decision maker level with your most strategic customers. 

In Sean Geehan’s book, The B2B Executive Playbook, he explains in detail how the market can provide insight, and help validate the following four areas (see diagram below):

  • vennYour “Exploit Solutions” – those areas that align to your business model and for which you have a core competency – in other words, what you do well.
  • Where you should “Evolve” – the market is telling you they want something that is in your core competency, but it is not part of your business model today. 
  • What you should “Acquire” – the market is telling you they want something that would fit into your business model, but you don’t have a core competency for it.  This is an opportunity to gain additional insight for potential companies to acquire.
  • Areas to “Evaluate” – this is something that is part of your business model and it is a core competency, but the market is not willing or interested in buying it.  This is an area you should look to eliminate or sunset the solution or product.

Validate Your Plan with Your Most Important Customers

My client learned that the best way to capture the areas outlined above was through his Advisory Council.  The value of a well-managed Advisory Council is that they can help you capture strategy, marketing, sales, service, product, and merger/acquisition information all at the same time.   

At their inaugural Council meeting, members were presented three specific initiatives for feedback.  The first was a legacy product they had for years—a “me too” in the market. The second was a new product they were getting pressure from sales to develop.  And finally, the third was to look at potential acquisition targets that would fit their business model, but for which they did not currently have a core competency.

The result of the feedback is what my client shared with his leadership team outlined in the beginning of this article.  And it saved his company over $10 million … all from listening to his customers.

Make 2012 a great year by seizing your Golden Opportunity.  Engage the decision makers of your most strategic customers to gain valuable market insight to help drive your strategic planning.

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Is your Customer Advisory Council Yielding the Results it Should?

 

As a business leader, how do you know if your Customer Advisory Council is yielding you the strategic results it should?   
High Yield StocksStocks

An Advisory Council is a huge opportunity to gain insight on your strategic, marketing, sales, services, product and merger/acquisition opportunities.  This insight when executed properly yields companies Sustainable, Predictable, Profitable Growth.

If you are not getting this level of insight and results, you need to look at how you started the process.  I recently observed an advisory council meeting where the executives felt that their advisory council meetings were getting stale.   We did an assessment and discovered several things:Stocks

  • Internal Alignment – Executive internal alignment was lacking. The Executives each had different ideas of why they had an advisory council and the results it should yield.  The result was the executives treated this like an event that happens twice a year
  • Company Priorities - When we evaluated this meeting as well as went back to their first meeting, we identified that the agenda’s never tied back to the company priorities.
  • Decision Maker Mix - They had technical and business leaders on their council – The decisions will always go to the lowest common denominator, which in their case went to technical discussions.

Based on what we identified, it was not surprising that the executives felt the advisory council was getting stale.     They were completely missing a huge opportunity to help them continue to transform their business to achieve the high growth they desire.

First of all, the executive team needs to understand the value that a decision maker council can have on your business.  Once you have alignment there, you need to look your planning process.   The executive team should look at their business priorities and align the agenda to drive outcomes that fit into those priorities.   Finally, once you have alignment, you have mapped this to your company priorities, it will become very clear who would be the right type of decision maker on your council.

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Customer Satisfaction, Loyalty, and Yoga

The Engagement Expo in Dallas this past week was a big hit!  Tracy Cole, Vice President at Standard Register and I presented how in the Business to Business (B2B) world, customer satisfaction does not create loyalty.  
yoga
A major aspiration for companies today is to be in ‘high growth’ mode, which can be challenging given the current economic climate. In the B2B world, high growth can be achieved through sustainable, predictable, profitable growth (SPPG), for which many factors come into play, most importantly customer loyalty.

One aspect we talked about as you create loyalty is how to engage Decision Makers.  Engaging Decision Makers is a lot like when I first started meditating daily in my yoga practice.  It’s all about:

• Insight
• Relevancy
• Relationships

Meditating has given me tremendous insight about myself.   You have to sit quietly and breathe deeply.  As a “type A” personality, this is not easy for me to do.   When you engage decision makers in the right way you will be amazed at the insight you can gain around strategy, marketing, sales, product, services and merger/acquisitions.

If you walked into a conference room and saw a group of people meditating, most people would think this is very strange.  If I saw this, I would say, “Is there room for one more?”  It’s all about being relevant. This is relevant to me and when you are engaging decision makers you have to make it relevant for them.  They need to have common challenges and a common goal.

When engaging Decision Makers the final piece is the relationship.  When you get a group of decision makers together and you are gaining their insight and having relevant conversations, you start to build trust which leads to a relationship.  Just like when I go to my weekly power yoga class.  There is a core group of us that attend every Saturday, which makes it even more enjoyable.

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Why B2B Customer Satisfaction Doesn't Create Loyalty

It would be great if customer loyalty professionally was similar to the loyalty we find in our personal life between your dog and your family? 

Boy and his dogWe all know that achieving customer loyalty professionally takes work.   As a matter of fact, there is a big difference between customer satisfaction and loyalty especially in the B2B world.

Join me with Tracy Cole, Vice President of Client Satisfaction, Standard Register at the Engagement Expo in Dallas on November 7th 2011 as we share Why B2B Customer Satisfaction doesn’t create Loyalty?

This presentation is based on findings from Sean Geehan's book,  The B2B Executive Playbook.

According to a most studies including the latest from Business Week, over 60% of defecting customers indicated they are satisfied right before they leave.  Learn why satisfaction doesn’t equal loyalty or retention and what to do about it.  Marketing and Sales must now play a role in driving beyond satisfaction to loyalty and ultimately advocacy.  Our session will explore best practices and lessons learned in developing customer advocacy. 

B2B Attendees will learn:

  • Understand the differences in B2B vs. B2C loyalty and customer satisfaction metrics
  • Understand the three layers of loyalty
  • How loyalty programs can transform a company, making marketing look like a hero
  • Best practices of leading firms to drive loyalty and retention
  • How to engage the internal support necessary to deliver loyalty 

I look forward to seeing you in Dallas on November 7th.

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