FT’s Decision Dynamics – 2

This second installment of thoughts on the FT’s Decision Dynamics survey focuses on the importance of providers to business strategy. We saw in my first post that providers (suppliers) have suffered a consistent decline in trust since 2003 when the FT’s annual survey began. What’s interesting is that the level of trust in suppliers does not correlate with the criticality of those suppliers (as in the chart below). In other words, suppliers provide important services to firms and, despite a decline in trust they are still considered vital. Reading between the lines, this could mean that the services provided are important but the suppliers themselves are not, due to falling trust levels. This then would translate into a greater competitive environment.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

So how do suppliers bridge the gap between demand for important services and the decline in trust in suppliers? The FT survey points to the key factors in choosing a supplier (besides price). Interestingly, high ethical standards comes out on top, though one wonders how a supplier can communicate this effectively (and differentiate on it). The more predictable string management and financial performance come next. Stable employee relations and a sense of the environment and communities are least important.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

The recession has had an impact on decision-making. Not surprisingly, price becomes more of an issue, but the increased involvement of senior supplier management can also be a differentiator. Recession drives competition, as can clearly been seen (below) by the increased likelihood of trying new suppliers and the longer shopping lists of suppliers considered by decision makers.

Impact of recession on choosing suppliers

(Source: Financial Times Annual Decision Dynamics Survey 2009)

Perhaps what’s most interesting is that, regardless of the recession, what is most important in winning business is the ability to be proactive with prospects, and to build a long and fruitful relationship. Although there is some shift in the score awarded to each of these depending on the prevailing economic situation, they are both the top parameters in determining which supplier is most likely to get work.

(Source: Financial Times Annual Decision Dynamics Survey 2009)

As I’ve said before on this blog, the biggest influencer on your success is you. Proactivity and relationships make a real difference and help to influence others in the market – influence starts at home.

It’s ALL to do with alignment

Funny how two unconnected things come together at the same time to contrive an “Aha” moment. Serendipity, synchronicity or spooky co-incidence. Whatever.

Anyway, Christine (Influencer50’s biz development lead in San Francisco) and I are discussing methods of engaging influencers. With over 20 different types of influencer to consider, we need an integrated method for the process, while catering for the wide differences in agendas, personalities and expectations.

Then just yesterday I was re-reading a Hugh post on Digital Nomads, when he uses the word “Alignment” to describe Dell’s blog attempt to sidle up to mobile workers.

Aha!

Influencer engagement is ALL to do with alignment. It’s about finding out what influencers do, when and how they influence, and what their agenda and motivations are. Once you know this you can (and should) align your outreach activities with your influencers on an individual (or at most clustered) basis.

So what? There are two traps to fall into when considering alignment with influencers. The first is that it’s actually quite hard to align yourself with a host of differing types of people. In fact, it’s hard enough aligning with different types of journalist or analyst. What about academics, community leaders, customers, regulators and the other numerous influencer types? Some discipline and structure is require, which is what Christine and I are working on.

The second trap is perhaps less obvious, but it is more commonly encountered. It is that alignment requires you to align with the influencers, not the other way around. Most vendors want to get influencers to agree with them. You should be looking for ways to agree with influencers, even if this means changing fundamental things about your business.

They are the influencers, after all.

How to use ‘super-influencers’

Sometimes we come across super-influencers. We define these people as having a high and broad level of influence across a wide variety of decision types. Most often, upper-influencers hold the most senior positions in business and government. Think Davos or TED, and you’re close to defining a commuity of super-influencers.

The problem with super-influencers is that they are too high-level and too hard to reach that, unless you are trying to influence other super-influencers, the effort required to engage with them is disproportionate to the likely benefits. The entry price for a corporate executive to Davos is something like $250,000 and even then there’s no guarantee of sitting next to the person you really want to meet.

The truth is, most decisions affecting your corporate health are made in a much more mundane, but reachable, community. Which is why most influencers on an Influencer50 list are grounded in practical, though deep, influence on decision makers.

Still, when a super-influencer drops in your lap, you should feel obliged to use them well. So the next time your CEO announces a visit, what should you do?

Super-influencers are so-called because they influencer other influencers. So get your super-influencer in front of as many other influencers as possible. Attract other super-influencers and make an occasion of it. Get influencers talking to each other. Why? Because influencers get a lot of their influence from networking with other influencers. Make this happen, be seen as the facilitator, and your influencers will thank you for it.

Why fifty influencers?

You’d be amazed how often I get asked, “So, why Influencer Fifty?” Easy answer: because we identify a minimum of fifty influencers for our clients as a kick-start to their influencer community programs.

But why fifty? What if we only want 25? Or what if we want 100?

It turns out that, for most B2B markets, fifty is the optimal number of people to reach out to, to manage appropriately, and to draw some conclusions from. Too few influencers, and you risk identifying just the obvious influencers: analysts and journalists. Too many, and you’ll get swamped: few organisations can appropriately manage more than fifty influential individuals.

Often, our clients will know some of the influencers we identify (though they usually don’t know their relative ranking). So we typically provide the top 75 or 80 influencers, so that they still have 50 or so individuals that are new to them.

In four years we’ve never had a client that has known more than half their influencer community. Usually it’s 10-15% – that’s between 5 and 8 influencers known to a vendor organisation.

Analysts, influence, and the pointlessness of lists

Aberdeen Group has announced the top 100 influential technology vendors in 2008. I’m assuming this isn’t a prank, since sensible folk like Jason Stamper at CBR have already commented on it. But it isn’t on Aberdeen’s own web site (yet) – I wonder if they’re embarrassed by it

Anyway, the list claims to show the top vendors that “excelled at providing value to the business community” – whatever that means. Jason does a great job of picking holes in the list’s composition, so I won’t repeat them.

So three macro comments:

1. Announcements like these do Aberdeen no favours. It is research generated purely for PR – there’s no other use for it. Are enterprises supposed to rush out and buy stuff only from the top 10? Are they supposed to not buy from the lower ranked vendors? In fact there is no insight, advice or action that can result (sanely) from this list. It’s a list for lists’ sake.
2. It brings into question the purpose of analysts generally. Can we respect the work of a firm that produces such pointless nonsense? This at a time when the very role of analysts is being discussed, here and here. Is Aberdeen really an anlyst firm? I hope not. If I was CIO at one of the “90% of the Fortune 500” or “75% of the Global 500” firms that “rely on Aberdeen’s research” I’d have serious look at the value of my subscription. And then probably review my other analyst subscriptions too.
3. What is the point of a list? I think it’s either to recognise and reward performance, in which case it should be based on performance outcomes (like a league table). Or it should be an advisory statement, based on some survey data, that advises and/or challenges you to take note (like SAP’s influence chart). The recent WSJ list of business influencers has merit because it does both – “hats off to the top gurus, and you should be reading these guys…”

A list of 100 technology firms is neither recognition of success nor useful to decision makers. It’s pointless.

Who really influences customers?

Hot on the heals of HP’s survey results on who influences their customers, Don at SAP has released figures of a survey conducted 18 months ago. The post, with Don’s observations on the data, is here.

A couple of immediate observations of my own:

1. How important peers and colleagues are. This is consistent with many consumer-focused surveys too. But I’m not convinced this is helpful from a marketing viewpoint: after all, it still poses the problem, how do you get you message to those peers and colleagues?
2. Our customers’ customers are major influencers. This is really interesting, and rarely picked up on. It means that what customers buy must add value to what they in turn sell. So we, as marketers, must know what our customers are selling, and to whom.
3. The importance of your competitors (in SAP’s case, Business Software vendors). Often downplayed, or ignored, but competitors are trying desperately to influence your customers. What do you do about it?
4. Confirmation that analysts are most influential in the 2500+ employee bracket. This mirrors Forrester’s own research into the influences on small and medium firms.
5. Blogs are low in influence. Don suggests this may have changed in the past 18 months. I’m less convinced.
6. Where are the events? This contrasts with HP’s figures, but match Influencer50’s research findings that events are rarely influential.

This is good insight into the share of influence that exists in the IT industry. I hope more firms will share their results.

Analysts influence, as measured by HP – update

I admit I didn’t expect a reply to my post on HP’s measurement of analyst influence, but a reply I received (see the comment on the post). Hats off to Bob at HP for disclosing the rankings of their survey.

The question is: what influences HP’s customers’ decisions to place a vendor on the short-list when purchasing products and services. The rank is:

1. Experience with Vendor
2. TCO
3. Price [statistically significant gap between top 3 and next 5]
4. Analyst Reports
5. Events
6. Vendor Internet
7. Analyst Verbal [statistically significant gap between top 8 and rest]
8. Financial Analyst
9. Marketing Collateral
10. Blogs/Social
11. Media Coverage
12. Direct Marketing
13. Advertising

Inital observations:

- how powerful vendor experience is. We always see competing vendors as strong influencers in any market, but I didn’t expect them to rated top.
- financial considerations are key, but not necessarily the financial performance of the vendor itself (if the low ranking of financial analysts is indicative).
- events are much higher than I’d have expected.
- interesting difference between analyst reports and analyst advice in forming a shortlist.
- social media and blogs are on the radar, but still low.
- very low showing for the media
- why does any firm bother with direct marketing and advertising these days?!

Also, I’m surprised at the absence of advisory consultants and players in the supply chain (VARs, SIs, etc). It may depend on the markets being surveyed.

Still interesting stuff and valuable contribution to the wider influence debate. Thanks to Bob for sharing the info.

Bob asks the community to share its data – we’re currently putting a paper together on the Influencer50 research. Anyone else?

The original HP announcement is here.

Influencers are old hat

When I was at the CMO Council Summit in November there was a panellist that said (and I’m paraphrasing here), “Influencers? We’ve been doing that for years. It’s old hat.”

I confess, the comment bugged me then. It still does. I was reminded of the comment when in Ghent a few weeks ago, while being interviewed by the Belgian press. Two of the journalists I spoke to suggested that companies have been doing influencer marketing for years.

I know what seeds the belief that considering influencers is well-established. It’s research like Overstreet and Katz & Lazarfield. It’s books like Dale Carnegie’s How to win friends and influence people. It’s Everett Rogers and the theory of diffusion of innovation. And so on.

There are two concerns I have in regarding influencers as old hat. First, if influencers are old hat, where are the influencer relations people? We have press relations and analysts relations. Whither influencer relations? In fact, influencer relations is just beginning to appear, in forward thinking companies like SAP and Wipro (check out the Wipro case study in the book).

Second, I actually think that influencers are old hat, insofar as they have always been there. Despite the talk about so-called “New Influencers” (bloggers and the like) it’s the “Old Influencers” that still dominate.

What’s new is the recognition that (a) we have a way of identifying them, and (b) we can then engage with them to improve marketing and sales.

That is very much “New hat”.

Influencing competitors

I’m reminded by Josh Bernoff at Forrester about the influence of competitors. Josh asks, should you talk about your competitors? Absolutely, and I’d suggest that you should hope they talk about you.

In every market there are competitors (otherwise it isn’t really a market), and there will be some influencers working for those competitors. So first, a reality check. It’s unlikely that competitors will become your advocates (unless you can convince them into a partnership, for example). But remember that the influential competitors are influential on your prospects – that’s the definition of an influencer. So you can’t ignore them either.

Trashing a competitor publicly will be counter-productive, but neither are you going to endorse them. So what to do?

Josh suggests a middle ground. Talk about your competitors. Give credit where credit’s due. Understand where your points of differentiation are, and emphasise them.

What is the point of this? The point is, you want competitors to talk about you. Given that they are just as unlikely to trash you, they will try to ignore you. They’d rather not talk about you.
Engaging with other non-competitor influencers has the effect of raising your profile in the industry, including your competitors. Because influencers are talking about you, your competitors will be forced to follow. Otherwise, their influence is diminished, because they are not seen as being in touch, or truthful.

This is particularly true for players trying to break into a market. It’s easy for the more established players to dismiss such competition. But they can’t do this if industry influencers are paying you attention. Importantly, talking about your competitors to influencers is very effective, because it aligns you with your competitors. What you are doing by engaging with influencers is creating a program to influence your competitors.

Your measure of success is simple. Do your competitors see you as a competitor? If yes, then that’s all you can do. If no, then you need to start influencing them.

Influencers don’t buy stuff – the point is…

After Nick’s debate with Paul Gillin at the New Comms Forum last week, Katie and others have fastened onto Nick’s quote that “Influencers don’t buy stuff.” It seems that some have taken this to mean that influencers don’t matter because they are not buyers. This is not the point.

The point is, firstly, that influencers are influencers, and are therefore important – by definition. They can’t both be influencers and not matter – that’s an oxymoron. So engagement with influencers is mandatory.

The second, and more important point, is that you need to talk to influencers in a different way that you might to customers. To put it crudely, you can’t pitch to influencers.

It’s not enough to “join the conversation” with influencers. You’ve got to know what to say, and how to say it. Saying the wrong thing is worse than saying nothing.

I think the missing link here is the identity of influencers. There may be “new influencers” such as bloggers, but they are not the totality of the influencer ecosystem. In any market the ecosystem will be heterogenous: in most markets we see a dozen or more influencer types.

So, step one is always to identify the individual influencers in your market. Only then can you think about what to say to them.