Personal versus ‘Firm’ influence

Does a person’s influence come from their own expertise and authority, or does it come from the credibility of the firm they work for? Actually it’s a bit of both, and I was intrigued to read via Augie Ray that Forrester is banning its analysts from blogging outside the ‘official’ Forrester blog platform.

The policy reads: “analysts with personally-branded research blogs must take the blog down or redirect readers to a Forrester-branded role-based blogs” (Source: Sagecircle).

I wonder if this is in any way related to the rise of Charlene Li and her groundswell blog and book, which positioned her as a leading social media analyst, only for her to scamper away and set up Altimeter, personal influence and credibility intact.

It’s a tough one for firms in the influence game. Do you, like McKinsey, hide the identities and personalities behind an anonymous company byline? Does your company brand immediately convey authority? Or do you promote your top staff as stars, in the hope that their individual reputation rubs off on the rest of the firm, and subsequent sales?

There are two things a company can do. Firstly it can recognise where company influence is most effective. This is in market reach and independence. Market reach, it turns out is influenced by both company reach and personal reach. Few have both, many benefit from just company reach, and personal reach is (obviously) the most transferable. But many an influencer has underestimated the balance between the two, having left their prestigious employers and struggle to make it on their personal brand alone. Gary Barnett at The Bathwick Group (and ex-Ovum colleague of mine) calls the critical degree of personal reach the ‘personal escape velocity’, which neatly explains the idea. Does an individual have enough ‘velocity’ to escape the ‘gravitational pull’ of the company?

A company’s stance also determines precisely the extent of independence of an individual. One may be an acknowledged expert in an area, but if the person also works for a vendor then their overall influence is qualified by this, and diluted accordingly. A non-vendor company can increase the influence of its staff by having a clear position on independence. Most analyst firms get this now, but the journey was fraught with conflicts and there remain some ‘analyst-for-hire’* firms. Other types of firm can also benefit from a stance on independence, including consulting firms, channel partners, services firms, and so on.

The second thing forms can do to increase the influence of its staff is to get them closer to decision makers. Normally the people that get to talk to decision makers are sales people, which are exactly the wrong type of people to position as influencers. Now despite the warm and cuddly reputation that sales people have, they unfortunately possess a fatal flaw, in that they want to sell something. It’s the hardest thing to influence someone while trying to sell them something**, because you have a clear, unambiguous and pressing interest in the outcome. Additionally, most sales people lack sufficient expertise and other influence attributes.

But there are other people in an organisation that are more suited to be positioned as influencers. The best influencers often come from the technical department, product development and design areas. They have a deep expertise, enthusiasm and energy, and a surprising lack of interest in making a sale. These people can be employed as influencers on specific deals, but they become much more influential at a market level if given the scope and support. Many adopt blogs as a medium to increase their reach and frequency of impact, which is why blogs are a useful influence enabler, but other avenues of outreach should also be used (conferences, seminars, press, etc).

Consultants, analysts and any other adviser types have the best chance at influencing decision makers, because (often) that is precisely what they are employed to do. They advise decision makers on what decisions to make, and in that sense they are professional influencers.

Companies trying to position staff as influencers must make their employees at least as effects as the professional influencers for them to have measureable impact on decision makers.

*This term was coined by Bill Hopkins at KCG.

**In a B2B world, that is. The influence of sales in B2C seems to be much easier…

Are you “blowing up balloons”?

Following on from my earlier post on What is a lead?, the comments received prompted recall of a presentation by Malcolm McDonald, a marketing thought leader. He challenged the marketing profession to be taken seriously, lest it be destined to blowing up balloons at events. How many marketers really have a strong position within their organisation, and are well respected for the contribution they make to the firm’s success? Perhaps an indicator is the number of good people being made redundant from marketing functions – I suspect they are simply undervalued.

Whose fault is this? It’s partly that of management, unable to recognise the value of marketing against, say, R&D. There are plenty of firms out there that have great technology but awful marketing. In tough times, it’s marketing that differentiates, not great technology. Nortel and Sun are examples: great technology but an inability to communicate it well enough.

But it’s also the fault of ourselves. Lets talk up the value of marketing, and do some marketing for the marketing department. Let’s also strive to measure valued metrics. Awareness, column inches and numbers of leads are quantifiable but largely meaningless. They measure activity, not effectiveness. Instead try sales velocity (lead-to-close time), leads-to-sales ratios, campaign ROI, and so on. I’m depressed when difficulty in measuring marketing is translated into defeatism. “It’s hard so we won’t try.”

I have a suggestion. Try.

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.

Online influence – here comes Google

Via John Bell, I stumbled across an interesting post by Heather Green at Business Week on Google’s imminent method for ranking influencers. I shudder at the impact this will have on discussion of influence. We’ll end up comparing influencers based on the number of times they appear on a search result or, worse, whether they appear in the first ten returned results.

As John notes, influence is complex and context-specific. The specifics of influence are such that one might be a world expert in a given subject (Scotch whisky, web site development) but have very little authority in an adjacent area (cognac, web site design).

A feature (flaw?) in measuring influence is that you can only measure what you can measure. Google can only measure what it is aware of, which is the frequency and connectivity of web pages. It cannot determine (as far as I know) the impact that reading a particular page has on the subsequent actions of that reader. Did the reader make a purchase decision based on the content of the page, or rush off to sell their stock in RBS? Who knows.

Connectivity – the number of connections an individual has – is a poor proxy for influence. Why? It’s too easy to fake. We all know the people that have 500+ connections on LinkedIn, yet have very limited influence. Likewise with MySpace. The term for people with lots of connections but no influence is Bore.

The longer term, and greater, threat from Google is that influencers are considered a route to market for advertisers. We’ve already seen this sort of thing emerging from Buzzlogic – Google will be able to do this magnified a zillion times.

If Google’s plans get more firms to talk about influence, then fine. But I fear that it will dumb influence down to a few ‘magic’ numbers that have tenuous relevance to real influence.

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.

Analysts influence, as measured by HP

HP’s AR blog announces its research findings of its survey of what influences customers’ decisions to place a vendor on the short-list. Interesting stuff.

But note that while 55% of respondents say analysts do influence the decision, this doesn’t not equate to share of influence. It might be that 80% of respondents think peer customers have influence, or that 100% think consulting firms have influence, or that journalists have no influence at all.

Unfortunately, they don’t say who else also influences customers, or where in the ranking analysts come. I assume it wasn’t top…

The only tidbit they offer is that bloggers and social network sites rank 11th of the 14 types. Go on, HP. Tell us the order of influencers. We’d all love to know.

Marketing efficiency versus marketing effectiveness

How do you measure marketing?   

I think that marketing should be measured by sales. Whether you use incremental sales, or total sales, or marketing-budget-to-sales ratio, or sales velocity, or some other metric, it all comes down to sales. Market awareness or “propensity to purchase” and other such things are pointless if they don’t ultimately lead to sales.

The difficulty comes in tying specific campaigns to sales. How do you know if the event you ran caused someone to buy when they wouldn’t have otherwise? So most marketing organisations track overall operational effectiveness and/or efficiency.

Fair enough. But I was shown the following chart by a client. It plots IDC’s assessment of 99 firms on two scales: how efficient marketing is (vertical scale), and how effective it is (horizontal).

 

 

   

The chart comes from IDC’s CMO programme, Marketing Investment Planner 2008: Benchmarks and Key Performance Indicators, published in September 2007. (You have to subscribe to this service, which I recommend if you want to benchmark your marketing against peers, or purchase the report to see the whole document,).

What does this chart show us? The startling thing about this scatter diagram is the degree of scatter. It looks pretty much random. I’m guessing that if there is any correlation between effectiveness (how useful marketing is) and efficiency (how well marketing is performed) it’s tiny.

For example, the most efficient marketing operation faired no better in its effectiveness than many less efficient operations.

Put simply, how well you do marketing has little effect on how useful marketing is.

Ouch! What we have here is a case of measuring for measure’s sake. It’s a problem I’ve detected with the whole Marketing Performance Measurement (MPM) movement. It’s all very well measuring marketing, but does it actually help?

Focus on marketing effectiveness, measured in sales, and you won’t go far wrong. Efficiency can come later.

Spinfluencers

I’m directed by The Leading Edge to the Spinfluencer blog. “Spinfluencer” is a great name (wish I’d thought of it, damn you!), and it got me thinking about how the marketing industry (and PR in particular) is struggling to incorporate influencer strategies into their traditional kitbag of activities.

I think marketing has got an image problem. Sales people find marketing pointless or irrelevant most of the time. Customers are suspicious and mistrust what they’re being told. And proving RoI on marketing spend remains, for most, a “one day, maybe” aspiration.

I trust the irony of marketing’s dilemma is not lost…

So putting together our thoughts for the book, Nick and I wanted to distance ourselves from traditonal marketing. Influencer Marketing is all about making messages more believed (because they’re communicated by influencers, not by you). It’s about aligning marketing with sales. And it’s about demonstrating RoI, tangibly. Holistically, Influencer Marketing is about changing the way that organisations think about marketing.

One thing that holds this all together is the understanding that influencers are different. You can’t “pitch” to them – they’re way too smart for that. You can’t train them to say nice things about you – they’re not amenable. And you can’t pay them – because that undermines their influence and is thus counter-productive.

While the term “spinfluencer” is memorable it has, for me, all the wrong connotations. It implies traditional marketing, spin and fluff, and it reinforces the negative image of the industry. Any marketing or PR agency that wants to understand influencers should be moving away from this approach.

When I browsed the Spinfluencer blog I found it to be interesting, well-written and insightful. I recommend it. I just hope they don’t regret choosing the name.

The value of referrals & references

Serendipity strikes again. I’m arranging a reference call between a prospect and a client, and then HBR alerts me to this article (subscription required) on the value of word of mouth (WOM) referrals. And then Brand Republic points me to a Robin Grant post on the latest Nielsen* research that shows, yet again, that people trust people more than anything else.

The HBR article is interesting not so much for the mathematics of referral value (yawn) but because it identifies a gap between those who say they’ll make a referral, and those that actually do so. Strangely, the higher value customers tend not to carry out the promise, whereas lower value customers are more inclined. Thus there’s a difference between a customers lifetime value and their referral value (which, the article states, could be significantly higher).

In the world of Influencer Marketing we often say that reference customers are the ultimate influencers. In the absence of direct experience of a product or supplier, a prospect will defer to a peer as a proxy for personal experience.

The Nielsen research and HBR article talk about referrals in a B2C context, whereas Influencer50’s focus is predominantly B2B, which typically involves references. The difference between a referral and a reference is timing, occurring at the beginning or the end of the decision process, respectively. But otherwise they are the same, a recommendation, with the same high impact.

In my experience, references in B2B are just as difficult to realise as referrals in B2C. Why is this?

• They’re generic: a reference is best if it maps closely to our own needs. That’s why banks like to get references from other banks. But most reference customers are used indiscriminately – case studies are notoriously bad for this approach.
• They get tired easily: the goodwill established in a reference client erodes quickly. You have to use them soon, and appropriately, or lose them.
• You don’t always have references: if you’re entering a new market, or have a new product to launch, you’re starting from scratch.

Understanding the whole ecosystem of influencers, not just customer references, is important for these reasons. You can use non-customer influencers to backfill your reference programs. This also means you keep your customer references fresh and focused for those situations where you really need them.

 

*The full Nielsen report is here.

How analysts can increase their influence

It turns out that I’m becoming known for my “analyst bashing” blog posts and other writings. It’s not a reputation I’ve sought. But I’ve made no secret that I think analyst influence is generally overstated, and that’s with eleven years of inside knowledge at Ovum and IDC. I’ve seen analysts with huge influence and those with very little. The real issue is, how do you tell them apart?  

As Richard Holway told me:

Any fool can be an analyst
But very few get to be influencers.

Bill Hopkins’s AR text Influencing the Influencers maps out very clearly why a few analyst firms carry the majority of influence within the analyst community – I commend you to read it. As Bill states in the book, “Some influencers are more vital to you than others.” Though it’s completely obvious if you think about it, many vendors (and AR agencies) don’t think about it, and propagate blanket importance of analysts. PR agencies do the same with journalists.

I think a primary challenge for all analyst firms is to make their analysts more influential. The first question to be asked, as always, is who do they influence? A better way of understanding the relevance of this question is to ask another: who do vendors want to be influenced by analysts? Usually, vendors are trying to influence decision makers, so that they buy products and services. It’s logical, therefore, to want to know which analysts have influence over those decision makers, that can sway a decision in one direction on another. These are what Hopkins calls Deal Makers and Breakers.

Clearly, then, the more analysts are influencing decision makers the more influential they are to vendors. And while it’s risky to categorise all analysts within one firm together, a firm’s business model will point to the likelihood of influence on decision makers. So Gartner, with its end-user research focus and consulting business, is likely to be more influential than, say, IDC, which has a predominantly supply-side viewpoint.

Additionally, the closer an analyst gets to the decision maker, the more influence they will have on that decision. In my experience, this deep level of influence is delivered only through client engagements and consulting. So analysts that directly advise decision makers carry the greatest influence.

There is also an issue of when influence is being applied. Analyst research papers are used by end-users as guidance and pointers, sometimes in the development of shortlists. This occurs early in the decision making process. Consulting, again in my experience, happens later in the process where evaluations and recommendations are being made. At this point the stakes are high, and individual analysts much be sure in their understanding of both the needs of their client and the capabilities of the vendors they are judging.

I think that this is where many analysts, and analyst firms, cop out. They are unwilling, or unable, to help a specific end-user client make a final decision. They may claim that doing so would conflict with their vendor independence. Nonsense. Recommending a specific product to a specific end-user organisation does not conflict with independence, as long the same analyst is just as likely to recommend a different product to another client with different needs.

So I think analyst firms should tell their analysts to get out more. Talk to, engage with, and start influencing end-user decision makers. It’s the only route to real influence.