What is a lead?

Marketing is often measured by counting the leads it creates. Many see this as a primary role of marketing – to feed the pipeline. The trouble is that it becomes an end in itself, rather than the means to a sale. So we count leads as the output of marketing – it follows that we classify anything we can as a lead, in order for it to count towards the total.

That’s basically why we use direct mail and other broadcast techniques in marketing. High volume outbound activities generate high volumes of inbound enquiries, which count as leads. Don’t they?

Such leads are often not much more than a name and phone number. They may be responses to a free offer or white paper, in which case they may not even be expressions of interest in you (just expressions of interest in your subject – not the same thing at all).

If you’re measuring marketing by counting leads it’s mandatory that you also measure leads-to-sales ratio. Together they measure the efficiency (number of leads) and the effectiveness (consequent sales) of marketing.

What typically then happens is that the number of leads diminishes, as you get better in passing on to sales those leads which have a higher likelihood of turning into revenue. You need to warn sales, and your senior management team, that this will happen, as otherwise they may hit the panic button. Recalibration of marketing measurement is required.

The future of advertising. Shock: there is one…

You may have detected a general disdain for advertising on this blog. If so, then (a) good, as that’s exactly what I mean, and (b) I’m not in the slightest apologetic for this. I hate most advertising, mainly because it’s not aimed at me, yet I’m (usually) forced to watch/read/listen to it. It’s just annoying.

Still, advertising makes for interesting discussion, since it’s changing rapidly and radically. A great synposis of the advertising industry was broadcast last night (Monday 16th) on The Bottom Line, which you can listen to here. It features Richard Brown, Chief executive of Eurostar, Guy Laurence, Chief executive Vodafone UK, and Sir Martin Sorrell, Chief executive of the world’s biggest advertising company, WPP.

Interesting insight into the general decline in advertising spend, the change in the mix of advertising towards digital, and the impact of the global recession.

Laura Ramos on B2B Marketing Trends

Laura Ramos runs Forrester’s B2B Marketing programme. I follow her research closely as, although it’s US-centric, it produces some fascinating data on what B2B decision-makers do. Laura’s latest comments focuses on B2B Marketing Trends. Pretty much consistent with what we see in the UK – the highlights are (with my notes):

• Commoditisation leading to a lack of differentiation, which leads to marketing all sounding the same (so true);
• B2B buyers buying like consumers. Using peer reviews and social media as decision making inputs (perhaps less true in the UK?);
• Ad avoidance and sales call avoidance – using web sources to delay contact with vendors (I think there is generic ‘marketing avoidance’ going on);
• Globalisation. Uh huh.

Laura suggests that the outcome of these trends will be the death of B2B Marketing. I agree, at least insofar as B2B marketing can’t exist in the way it does. The justification that marketing “creates demand” is slammed by Laura as a cop-out. It needs to be more measurable in sales terms and more aligned with sales.

I’m looking forward to Part 2 of Laura’s comments…

Marketing spend grows, but in the wrong direction

IDC has announced its latest marketing budget figures* for 2008. Rich Vancil’s program has been running for several years now, and it’s based on a consistent sampling of traditionally big spenders in marketing. It’s an excellent gauge of marketing’s current and intended spend amongst large IT vendors.

This year’s figures show an increase of 3.5% over 2007. Lower than the past three years, but at least it’s growth, right? Wrong. The percentage growth doesn’t account for inflation, or for the overall IT market growth, both of which are higher. So, in real terms, marketing spend is declining.

Does this indicate, or pre-empt, a decline in the overall market conditions for IT? Could be. Certainly, the prospects are gloomy (read here* and here).

But it’s always struck me that marketing, if it does what it’s supposed to, should be one of the last things to shrink in times of adversity. If marketing works, which means (to me) that it enables sales, then you’d think firms desperate for sales would do more marketing, not less, during a recession.

Which then leads me to conclude that either firms are just daft for not recognising this, or they know that marketing doesn’t really work that well yet were still spending money on it. Which is itself daft. Or that they don’t know whether marketing works or not, but it’s something that everyone else does.

Which is even dafter.

*Free registration required

Marketing in times of uncertainty

Someone told me that recessions cycle around roughly every 18 years. What do they know?! It seems just like yesterday when the IT industry was flattened by the post Y2K and post 9/11 gloom. An now here we are again. If you’re in any doubt of what’s coming, read Richard Holway’s pessimistic but usually accurate view of the short term future.

Marketing’s core purpose comes to the fore in times of recession. If it doesn’t impact sales, directly and measurably, then it’s impact is questionable. Demonstrable short term sales impact is the best defence against cuts, because in a recession it’s all about short term sales.

Budget cuts are inevitable. This is good news, if you’re still in a job to be able to spend your diminished funds.

Firstly, it means that you must stop doing things that don’t work, or can’t be measured. What would happen if you didn’t do the next event you’ve got planned? What’s the impact of not doing PR for a quarter? Is that DM campaign really worthwhile? Cut what doesn’t work and invest it activity that truly generates sales. Be bold. Ask tough questions.

Budget reductions also mean that you have to be creative, which is what marketing types should be good at. So try new things. I expect more companies to invest in social networking technologies, as they try to reach their customers in new and innovative (and cheaper) ways. I think word-of-mouth campaigns will grow, looking for referrals and leads from existing customers. And I believe vendors will engage more with partner organisations in structured and sophisticated ways, like SAP’s Industry Value Network approach.

Recession is tough for everyone. But there are opportunities to take, if you’re brave enough to chuck out old and ineffective ways of marketing.

Batten down the hatches. Good luck.

Influence as vocabulary for integrated marketing

One of Influencer50’s first clients initially thought that Influencer Marketing could unite the disparate silos that existed in the marketing department. Thanks for the confidence, guys!

Much as we’d like to position Influencer Marketing as a panacea for marketing’s ailments, it doesn’t work quite like that. But strangely, and probably because the client’s expectation was set from the beginning, the outcome was closer to their aspiration than we thought possible.

It works like this.

A major issue in marketing is the silo mentality that divides operations into a wide range of disjointed activities. So we have PR, AR, partner marketing, events (from conferences to podcasts), user groups, collateral development, and so on, as well as a host of telesales/telemarketing and mailings.

Now Influencer Marketing doesn’t promise to unite all of these distinct activities. But what it does do is identify where the influence on decision makers lies. It does ask the question: “How does this activity relate to influence on decision makers?” And it does suggest that if and activity cannot demonstrate an impact on influence then you should stop doing it.

Influencer Marketing applies right across the marketing operational domain. It covers press and analysts, and partner organisations, and end-users, and events and other influence categories. So it offers a vocabulary for discussing the widest range of marketing activities, uniting at least the terminology for discussing and managing marketing.

Our client runs marketing operational management meetings, at which all representatives report on their activities. The reports are provided in terms of their impact on the identified influencers relevant to the activity. So PR reports on progress in engaging with the most influential journalists. Events are scheduled to leverage the most influential conferences (a diminishing category), and influencers are solicited to speak at client-arranged seminars. Partnership strategy is oriented around the most influential people in third-party organisations, even if formal partnerships don’t already exist.

Thus influencers have become a way of everybody reporting back using the same terms, and with the same degree of focus on who really carries influential with decision-making prospects.

We, and our client, are smart enough to recognise that this isn’t truly integrated marketing. But it’s a useful start, easy to implement, and aids management. It also helps to present marketing in a more organised and professional light to the rest of the organisation. This is important, especially with a recession looming and the budgetary axe being lifted.

Holiday thoughts on marketing

Just back from holiday during which I had time to reflect on fundamental stuff while horizontal and sunkissed. In fact I had some great “being marketed to” experiences, which just confirmed the basics in market. (Context: tourist volumes are down by (some say) 30% in Tenerife.)

1. Have a great product. Let people try the great product, for free. If it’s truly great they’ll buy it. Example: every restaurant along the beach front is touting for business, showing their menus and encouraging reluctant holidaymakers to venture inside. One restaurant, not even on the beach front, is full. That’s the one that’s handing out free samples of fried cod. It tasted great. There was a queue just to get the free samples. Why did no other restaurant try this, and hand out samples of paella? Near-zero incremental cost, ROI in one order.
2. You can differentiate in a commodity market. In Tenerife, all the resorts look basically the same. All the beaches look the same. All the restaurants serve the same food. All the shops sell the same stuff. Differentiation comes through service, through care for customer needs, through creativity. (Note to self: not everyone will appreciate attempts at differentiation. Elvis impersonators appeal to a niche market.)
3. If you have to lie to your prospects to get their attention, there’s something fundamentally wrong in your approach. I’m not sure exactly what the young people offering prize draw scratch cards were selling (timeshare?) but after the fifth time of being accosted even my kids recognised the script. No, you cannot hand the winning ticket in to the tourist office. There are not only three winning tickets each day (or I am improbably lucky, since I won five times). No, I haven’t possible won a cash prize, but I’ll bet you a tenner I’ve won the “free” holiday.

And they say holidays are relaxing…

Marketing’s image problem

In prepping for the CMO Council talk some weeks ago, I centred on a theme based on marketing’s image problem. It struck me that most non-marketers have a pretty poor regard for marketing, somewhere in the region of estate agents, lawyers and car salesmen. 

What also struck me was the irony in the situation. Jeez – if marketers can’t fix their own image problem what chance do their employers/clients have.

When I met Hugh McLeod in 2006 he used this analogy for traditional marketing:

Imagine you’re at a party. A man comes up to you, but instead of introducing himself, he yanks your head back, pulls your jaw down and looks at your teeth. “I’M A DENTIST!” he explains.

(I’ve subsequently plagiarised this analogy in a White Paper and the book.) 

In a party context, most normal people would rather be offered some peanuts and engaged in polite, if trivial, conversation. Why can’t marketing be like this? Why not engage people in a conversation? If you are interesting then they will respond in kind. You can move to a business conversation later, once social niceties are satisfied.

Hugh recently revisited the subject even more succinctly:

(Full post is here.)

The real problem for marketers is the awful image they have within their own firms. At the CMO Council Summit in Berlin, I was amazed at how many of the speakers criticised marketing and marketers (i.e. the audience!) for their lack of ambition and poor perception. “Blowing up the balloons,” was how Malcolm MacDonald termed it. 

Marketing should be the second most important thing a firm does, after serving customers. If marketers are blowing up the balloons, then someone else has to do the effective, productive marketing, typically the sales teams and channel partners. Sales people can spend 40% of their time creating marketing collateral – 80% of “official” collateral created by marketers never gets used.

How are you perceived within your organisation? Are you a future board member or strategic thinker? Or do you blow up the balloons?

New year, new budget, old habits

What’s your rationale for determining your marketing budget this year?

The majority of us marketers look at what we spent last year, make a few tweaks, and submit the not-much-changed plan for approval.

So, did last year’s plan work well for you? Did it tangibly increase revenues, or generate better quality sales leads? The best measure for marketing success is to ask the sales team whether they think marketing is doing anything for them. So go on, ask them.

In fact, since Influencer50 started surveying sales teams as part of our kick-start influencer engagement programmes, I’ve been startled at the appalling scores marketing departments get by the sales teams. The average score for usefulness of marketing to sales efforts is less than 50%.

And don’t give me that “Oh marketing is complicated and we have to invest in awareness” claptrap. If you can’t justify marketing in terms of sales (or sales support) then why are you doing it?

With my Influencer50 hat on, I’d say that you should instead map out who and where your key influencers are, then organise your marketing activities around them.

But it doesn’t really matter what rationale you use to plan your marketing this year. Just make sure it’s not last year’s plan. If last year’s plan didn’t tangibly and positively affect sales, what makes you think the same plan will work this year?

CMO Council talk transcript

It’s available for unrestricted download here…

The paper on the Insanity of Marketing, which I referred to, is here (one-time registration required, or just login).