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March 24, 2010
Today our Marketing Analytics team lead, Creig Foster, dives into the sexy topic of predictive analytics (PA). Why are we so enamored with PA? One of my students, the Marketing Operations leader at fast-growing software company, captured the essence of why PA is compelling in a recent essay: “I have a better chance of my marketing department growing and my personal relevance moving up the food chain if I can predict the future – plain and simple.” So if that’s the case, why aren’t more marketing leaders actively applying PA in their marketing strategies (particularly in the B2B world)? Perhaps they just don’t yet understand the many PA applications that are available to run their Marketing Operations better. Creig’s aticle takes some of the mystery out of the magic of predictive analytics. Gary
Increasing the Value of Marketing Operations with Predictive Analytics
by Creig Foster
A recent blog post by James Kobielus of Forrester Research advances the idea that business success depends on your company’s capability to see likely future outcomes and take appropriate steps now to realize them. He goes on to say that predicting future scenarios successfully, laying plans and deploying the needed resources is critical in seizing opportunities, minimizing threats and mitigating risks. I fully support this view and believe that for a company to be successful these days it must use predictive analytics to its fullest extent.
So what is Predictive Analytics? From the all knowing source, Wikipedia, “Predictive analytics encompasses a variety of techniques from statistics, data mining, and game theory that analyze current and historical facts to make predictions about future events.” You might ask yourself what is the big deal; humans do this sort of thing all the time. Yes, but predictive analytics takes in huge amounts of data, analyzes complex interrelationships, and discerns patterns in the data that the human mind could not possibly see. Besides, the models can do their processing 24/7 without making a mistake.
Kobielus goes on to state that the “grand promise of predictive analytics – still largely unrealized in most companies – is that it will become ubiquitous, guiding all decisions, transactions, and applications.” For a company (large or small) to become a truly predictive enterprise, I believe it will take more than an investment in the technology and people to accomplish this transition. It also takes a change in how a company thinks about its business.
Instead of a reactive response to challenges and opportunities as they are presented, I believe that a proactive and investigative approach to building the business is enabled by predictive analytics. Yes, I know we all plan with the best intentions of positive outcomes. What I am suggesting is using predictive analytics in making decisions about future directions and strategy. In other words, the use of predictive analytics should become part of the way a company thinks about its business and a cornerstone of the overall business strategy.
Read the complete article here.
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October 18, 2009
Today I'm pleased that Joshua Horwitz, founder and president of Boulder Logic, is sharing his vast experience with us on the implications of undervaluing your customer reference program. I continue to be disappointed (but not surprised) by companies that claim to highly value customer loyalty, yet fail to invest in the processes, tools and staff to optimize their customer reference efforts. I've talked to hundreds of marketers and sales people that have experienced the same challenge I have when I led outbound marketing at ShoreTel: No one owned the customer reference challenge! Joshua's company provides a great technology solution that – when combined with good process, guidance and execution –can transform a few good customer references into a pipeline of willing evangelists, ready to enthusiastically support both your sales and marketing objectives. Gary
When a Customer Reference Causes the Deal to Fall Apart
by Joshua Horwitz, Boulder Logic
Bringing operational discipline to your customer references is not only a Marketing Operations best practice, it’s a proven way to increase your value and contribution to your company’s success. Still we occasionally encounter executives that believe customer reference management takes care of itself. If sales people are able to search down a customer to speak with a prospect when needed, where is the big problem?
Beyond the non-productive time spent searching or the burn-out of the few good ones, the problem with an undisciplined approach to satisfying reference requests is the high risk of inadequately matching the selling situation and the resulting financial implication.
In this post, we'll take a look at some of the ways your sales people may actually be lowering their chances of closing the deal when customer references aren't handled properly.
1. The prospect hears more negative than positive: The prospect starts asking questions and the details shared by the customer paint your company in a negative light. It may be timing or just not vetting the customer well. The customer may not even know what they've done. This happens more often than you'd think.
2. The prospect questions your company's ability to execute: Prospects evaluate your company's ability to satisfy their requests at every step. Because customer reference activities involve multiple relationships and stakeholders, there is a significant risk that an ad hoc process will expose an uncoordinated appearance that leaves questions in the prospect’s mind.
3. The prospect decides you don't have enough relevant experience: In the rush to find someone to satisfy the request, it is common for a sales person to share a customer reference whose experience doesn't match what the prospect is trying to achieve. While glowing praise from a customer sounds nice, if the reference doesn't match the prospect's requirements and vision, it won't help reinforce the experience you claim to have.
4. The prospect feels you don't understand their problem: Put the wrong customer in front of a prospect and they may think that your sales person hasn't really listened to what they've said or just doesn’t appreciate their specific situation. The hard work your sales person spent building the relationship may be lost.
5. The prospect begin to lean towards your competitor: Your prospect has also obtained references from your competition. If the customer they share is offered in a timelier manner and is able to speak more effectively, the opportunity may be impossible to salvage.
Sales people are used to doing whatever it takes to satisfy a prospect. While this may result in relatively few customer reference requests going completely unanswered, it ignores or hides the risks of having no tools or process in this area.
Few factors influence prospects as much as comments from their peers. Organizations that overlook this area are inviting unnecessary risk that an inadequate customer reference may actually cause deals to fall apart.
Check out Joshua's blog.
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The following post appeared on Boulder Logic’s Reference Success blog last week. Today we have a guest post from Gary Katz on his experience applying a formal Marketing Operations model to customer reference management. Enjoy… About five years ago, I walked into Shoreline Communications as the new director of communications and corporate marketing. After completing my first objective – helping to re-brand the enterprise phone company from Shoreline to ShoreTel – I realized I had a significant challenge ahead:
- ShoreTel had great customer loyalty, which needed to be leveraged as a significant competitive advantage in the market.
- Our marketing programs depended heavily on great customer references – webinars, seminars, case studies, media relations, analyst relations, speaking engagements.
- The company’s sales channel model provided neither the structure nor motivation for Sales to collect timely customer reference data. Once the deal was done, the heavily lifting was passed to a channel partner and Sales was on to something else.
- The same customer references were being burned out, used over-and-over again. Why? Because with more than 1200 customers and more than 150 channel partners at the time, no one wanted to assume responsibility for qualifying and managing these customer references.
- My success was directly related to being able to tap into this rich pool of customer references.
At that time, I didn’t know about Boulder Logic. I didn’t even know what Marketing Operations was. I just knew I wasn’t getting anywhere trying to qualify these references on an ad hoc basis.
So I worked with a consultant to design a customer reference process aimed at developing a robust and renewable pipeline of customer references – just like a sales pipeline.
Specifically:
- ShoreTel’s customer database was categorized, continuously updated and mined for strong reference candidates
- All references were qualified for use in marketing and sales efforts
- Qualified references were matched to appropriate marketing, public relations or sales opportunities
- Select customer references were converted into case studies or e-newsletter articles, or used in webinars, editorial calendar, article, analyst research or speaking engagement opportunities
- We began formally tracking all active references, including customer contact info, channel partner info, reference type, usage log and color-coded status information
Since that time, ShoreTel’s customer reference program has grown from about 20 qualified references to more than 1000. The program generates approximately 25 new case-study candidates every quarter. The public relations team has a ready supply of credible references to present to editors and analysts as publicity opportunities arise or are uncovered.
But most importantly, within months of rolling out the program, the major benefactor and requester shifted from Marketing to Sales. Today, ShoreTel Sales relies on this program to identify references that help it win strategic deals in new vertical markets and new geographic territories.
And who do you think helps them find the best matches for their requests? The same consultant I hired to implement the program one day a week back in 2004! Dick has out-survived four of my successors and his value (and workload) is greater than ever, even in a miserable economy.
So let’s get with it, people! Odds are, your customer reference effort is suboptimal. Bringing operational discipline to your customer references is not only a Marketing Operations best practice, it’s a proven way to increase your value and contribution to your company’s success. Today, you have great tools like Boulder Logic to make the customer reference process even more effective.
Think about it. What other marketing program can simultaneously influence your company’s customer lifetime value, ensure that valuable Voice of the Customer insight is collected and utilized in marketing, potentially transform your customers’ technologists into industry rock stars, and help Marketing become Sales’ best friend by increasing the velocity of the sales pipeline?
With a heightened emphasis on Marketing optimization and ROI, today you can’t afford to miss this golden opportunity. Highlight any portion you want:
Is your organization effectively leveraging your customer loyalty in your sales and marketing efforts? If yours is like most organizations, your customer reference process is less than optimal. While this is a big challenge, it’s also a huge opportunity. Solve the reference problem and you will not only dramatically increase your company’s sales and marketing results, but boost your career in the process. Do you need to bring greater discipline and control to your customer reference process? Do you want to protect your best customers from suffering reference burn-out so you can get the most out of these invaluable assets? Are you ready to run your reference process like you do (or should) your sales pipeline? If your reference process could use an overhaul, please join Joshua Horwitz, founder of Boulder Logic, and me this Tuesday, May 12 at 12 p.m. PST for a free webinar to learn about the opportunities and challenges of bringing Marketing Operations approach to customer reference activity in your organization. Among the areas Josh and I will address:
- The economic relevance of customer reference management
- How to apply an operational approach to references
- Consideratiottps://www1.gotomeeting.com/register/868352752ns before introducing new customer reference practices
“Good customer references are known to influence sales, however an ad hoc approach to providing those references is less productive and jeopardizes existing relationships,” says Horwitz. “Executives that attend this event will learn how applying operational controls and metrics to customer reference management can lower costs, protect existing customers and drive new sales.” Register now for the free “A Marketing Operations Approach to Customer References” webinar.
Gary
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Congratulations to our Lynn Hunsaker for being acknowledged as the CustomerThink.com Best Author for August 2008, in the Blog category. Lynn received high marks for all four of her blog postings, with the following blog being the most popular of all. Gary
Love Those Lemons: When They Complain, Make Lemonade
By Lynn Hunsaker, ClearAction and Marketing Operations Partners
Negative customer feedback is a lot like biting into a lemon — the bitterness is hard to love — unless you give the lemon a good squeeze and some sugar, and transform it into refreshing and healthy lemonade. You’re only as strong as your weakest link, so those lemons — complaints and low survey ratings — are indeed essential ingredients to improving customer experiences.
To squeeze your voice of the customer lemons into useful juice, you’ll want to (1) make it easy for customers to give you early warnings of their dissatisfaction, (2) strive to see the whole picture of the customers’ experience, and (3)analyze root causes.
To add sugar, you’ll want to put a positive spin on your your new-found knowledge of dissatisfiers and their root causes. After all, what better warnings could you have for ways to manage and nurture your weakest links? Working on the root causes of dissatisfiers is the best way of (1) migrating ambivalent and at-risk customers into a reliable source of profit, (2) preventing your brand fans from stumbling upon your weak areas and becoming disillusioned, and (3) building brand equity by delivering company-wide on your brand promise.
The average American company loses half its customers within five years. How can your company achieve sustained growth with image-building alone? By addressing the customer group giving you “lemon feedback” you can turn negative word-of-mouth trends to sustainable competitive advantages with a ripple effect on your entire customer base. This internal branding effort aligns what’s going on inside the company with what’s being promised to customers.It adds customer experience substance to your value proposition.
On a hot day, a cool drink of lemonade is just the thing to re-energize. Similarly, in the heat of competition, lemonade is just what the doctor ordered to provide a compelling customer experience with your brand.
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How our customers experience our organizations is at the core of our Marketing Operations effectiveness. We hear a lot of talk these days about “value” and the importance of ”customer experience management.” But often, the reality is that “value” is in the eyes of the beholder, and ”customer experience management” is a nice buzzword that we proudly tout without taking the necessary steps to integrate the concept into the fabric of how we do business. Today, my colleague, Lynn Hunsaker, shares some insightful recommendations on how to view customer experience more holistically and measure the outcomes that comprise value from the customers’ perspective. Gary
What’s Your Customer Experience Value Quotient?
by Lynn Hunsaker
 If value is defined as benefits versus costs, what’s your company’s customer experience value ratio? Superior value is the objective of customers and marketers alike. And since customers hold the purse strings, marketers are compelled to view value as customers do. In the customer experience value ratio, the numerator includes product and service value, as well as image and personal value. We may often overlook or be unaware of some of the cost dimensions in the denominator: money… plus time, energy and psychic costs.
In managing customer experience, the challenge is not only to maximize the numerator, but also to minimize the denominator. Touch-point analysis can be very helpful, but make sure non-touch-points are also considered, as the customer experience contains several elements that do not touch the company or channel. By carefully identifying and improving the time, energy and psychic costs to customers, the customer experience value quotient can be boosted significantly. In fact, the intangible elements of the denominator may be the hardest things for your competitors to copy, and therefore, your surest strategy to sustainable value superiority.
 A great exercise in exploring your value quotient is to quantify the value ratio for all choices available to your customer. To develop a holistic perspective, plot these quotients as they existed in the past, as they currently exist, and as you project them to evolve in the future.
While the exercise above is illuminating, it’s incomplete in its prescriptive value to your organization. You may realize that your solution is inferior or superior to other alternatives available to your target customer, but which superior elements should you prioritize for protection and strengthening, and which inferior elements should you prioritize for improvement? The answer lies is customer experience outcome research, which involves ethnography to observe customers in their natural surroundings, revealing a more accurate and realistic viewpoint of the dimensions in the numerator and denominator of the customer’s value equation.
 To innovate superior value, plot all available solutions by customers’ desired outcomes. If you have conducted customer outcome research, rank-order desired outcomes by importance x frustration x frequency. Now you’re able to see things the way the customer does: for the most important outcomes, how do the choices compare? Root cause analysis may identify engineering issues, service skill gaps, business process complications, or outdated policies.
Involve your whole organization in outside-in thinking and continual improvement by teaching them about the customer experience value quotient. For similar ideas, see my newest handbook, Innovating Superior Customer Experience.
Contact the author to find out how to customize these tips to your situation.
   
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October 12, 2009
The recording from yesterday’s “A Marketing Operations Approach to Customer Reference Management” webinar is now available. Due to a technical glitch, Josh and I weren’t aware that there were many questions in the queue. So we will be providing responses to those questions on this blog and Josh’s Reference Success blog within the next day or so. Gary
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Customer reference management is definitely a great area to apply Marketing Operations discipline and tools. If you didn’t get to attend our live webinar this week, here is a link to a recorded archive: A Marketing Operations Approach to Customer Reference Management, with Josh Horwitz of Boulder Logic and yours truly. Josh and I were having fun during the discussion and time got away from us. Since we didn’t get to all the great questions we received, we decided to post the Q&A below. Enjoy! Q: What could be customer incentives to participate in the program? A: There is a lot of debate on this topic and there was an earlier Boulder Logic blog post on points that you might find interesting. Generally the incentive for customers comes from their appreciation for a successful partnership with you as a vendor or service provider. A desire to see their success communicated externally is a personal motivator. An effective program typically has elements in place to reinforce these factors and augment them with other benefits. Benefits that have a direct monetary value risk the perceived integrity of the testimonial and open legal and accounting issues. Some of the most successful programs tap into the customer’s relationship with your business and products by offering VIP input to product roadmap and access to executives. Q: Do you have any other numbers to elaborate on the impact of references on sales/revenue? A: One of the really nice things about customer reference management is that it is so closely tied to revenue. One way this is done is linking specific sales opportunities to deals that were impacted by customer references. There have been a few folks that have published numbers related to their results, including a nice write up by Abby Atkinson of Infor. Boulder Logic will be publishing a recording from another webinar shortly that walks through the calculations at a very detailed level. Stay tuned! Q: We do have a reference program and we are moving into an indirect channel and it’s proving to be difficult. How does one engage the indirect channel more? A: Organizations with an indirect selling model do have additional challenges because the customer relationship is typically owned entirely by the partner. In these cases, it is very important to have an executive sponsor that promotes the importance of the initiative directly and through the executive responsible for the channel relationships. From a marketing perspective, you should apply internal marketing techniques to bring visibility to partners that do engage an awareness to all. If possible, secure the opportunity for your channel to apply co-marketing dollars to their own customer reference efforts. After all, they are both the producers and consumers of an important resource. Q: Any tips on how to get seasoned sales executives, who may be used to a culture of guarding their reference customers and “keeping them in their back pocket,” to adopt a sales reference tool/process and be active contributors? How do new customer reference programs build trust? A: Your question acknowledges that it is all about a trust relationship, which is great. Trust is achieved in steps where expectations are set and consistently met. Acknowledge and respect the relationships that exist. Break down their concerns about overuse and the lack of other available references by sharing how your program will work. Leverage your executive sponsor and ensure that sales management is involved so they hear that the initiative is being supported. And when you see success, promote it and whoever made it happen! Q: What kind of applications can be used for customer reference management? A: It isn’t uncommon to start with using Excel, however the challenges of sharing access, defining workflow , data quality, and tracking details for reporting make this a challenge. Many organizations ask their IT department to build something; however there are specialized tools for managing an enterprise customer reference program available as a stand-alone or integrated with your CRM system. Q: How do you get marketing & sales execs to understand reference management (the need, the processes, the business case, best practices, etc.) when you’re given 3 minutes to present AND you’re also trying to describe the status quo of our particular situation internally to get them to fully understand the problem? They say “we need more references” but won’t stand still long enough to understand how else it can be done… A: Wow! That doesn’t sound very fun, but your situation isn’t actually so uncommon. Customer reference management is surprisingly difficult and organizations fail to realize that the solution and the responsibilities need to cross groups. I’d set aside the 3 minute presentation until you’ve secured an executive sponsor that will help. If that isn’t easily obtained, follow the advice of one of our clients: “My advice to organizations considering managed reference programs is to rally their salespeople around the idea first. Having your sales team champion the need for a managed reference program can make the difference between getting executive buy-in and funding or not (see ShoreTel case study blog post for a good example). This isn’t easy and requires good planning and communication but when you can get sales to say, ‘I can generate more business with references’, somebody high up in the marketing organization is going to take notice and back the venture.” Q: To your point about skill sets: I have the process & operational mindset — the marketing execs holding the money do not.  How can I break through that? A: If your executive audience doesn’t think with an operational mindset, I wouldn’t advise trying to convert them to a different way of thinking. Know your audience. Keep your business justification focused on the business benefits, high-level execution plan and your resource requirements. If there isn’t a real process today, it shouldn’t be too hard to highlight lost opportunity or business problems. If they are more apt to listen to sales reps, follow the guidance from the answer above and solicit input to sales about how the topic impacts their ability to generate new business. Q: How often do you see customer management programs successfully integrated with existing CRM solutions? A: The successful integration between Customer Reference Management with an existing CRM solution is a pretty consistent part of the customer reference program vision. Obstacles typically include other IT priorities, budget and limited adoption of the existing CRM. To answer your question, we see successful integration about fifty percent of the time. Q: Good idea of integrating these very interesting topic(s)! Nice slides  A: Thanks for the positive feedback. Marketing Operations fits pretty easily with customer reference management. Q: Is it important to monitor the use of references by the sales force [to prevent them from] using a reference too early in the process? A: Good question. I think it is very important to understand the different phases of the sales process and consider how some form of customer testimonial should be applied in each. By presenting this back to the sales team, they’ll be more inclined to use what is appropriate for each phase. Q: Where are/were the customer references for Boulder Logic in this presentation? A: Ha! Who planted this question? Seriously, we decided to avoid too much self promotion. Here is a page with a few of Boulder Logic’s client references. Q: What are some successful strategies for motivating hesitant customers to participate as a customer reference? A: We talked a bit earlier about what incents a customer to participate as a reference. When customers are hesitant, it may be because they don’t understand these benefits, don’t believe them to be relevant or have external pressures affecting them. Your effort to overcome these should be based on the importance of their participation, but some of the approaches would be: 1) working through individuals that have the closest relationship, 2) showing them others like them that have participated, 3) starting with something small like providing a quote, or 4) redefining how they participate, such as doing an anonymous case study. Josh and Gary
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Today my colleague, Lynn Hunsaker, discusses how acting on voice of the customer (VOC) is a key ingredient in any successful Marketing Operations program. Lynn is a rare individual who has successfully straddled the sometimes divergent worlds of outbound marketing and customer advocacy. She powerfully represents the point-of-view of Marketing Operations Partners, which emphasizes the importance of the CMO and marketing team taking back ownership of the customer experience – Gary Katz
Marketing is so much more than image-building and strategic planning, although these roles are essential. As the conduit for customers’ voices throughout the organization, and as a conduit for the company’s voice to customers, marketing plays a significant role for the entire customer experience.
Accordingly, we need to expand the impact of marketing to include acting on the voice of the customer. How many functional areas within your company are aware of current customer sentiments and their functions’ impact on improving customer relationship strength? Marketers can take initiative to systematically provide all areas of the company with this information and the business processes to act on it. This is the part of marketing that rolls up its sleeves, objectively analyzes the less attractive feedback from customers, and makes things happen within the company to substantively improve customer perceptions. Through substantive changes, growth through loyalty and word of mouth becomes sustainable.
Marketing Operations embraces acting on VOC as a key strategy for streamlining processes and quantifying ROI. Acting on VOC extends beyond the assignment of improvements for the top dissatisfiers indicated in survey results. First of all, a well-respected executive champion accounts for a great deal of the difference between success or failure of your endeavor. With this in place, start by analyzing your customer base. This is different from segmentation analysis; rather, it examines which customers are most profitable, so that you can make sure VOC represents your customer base with a healthy balance. Next, you’ll want to make sure your methodology for capturing VOC provides you with a thorough understanding of customers’ pain, wherever it may be. One of my favorite quotes is from Jim Morgan, Chairman of Applied Materials: “Good news is no news, no news is bad news, bad news is good news.”
To overcome apathy, denial, or finger-pointing when sharing customer feedback within your company, slice the customer feedback by product line and by sales and service teams. When each group has their own set of data, you can drive VOC throughout the organization, establishing clear accountability for action as the data relates to each internal group. Customer-focused service at all customer touch points is only as good as the weakest link in the entire value-chain. Analyze handoffs throughout the company’s business processes to identify streamlining opportunities, and to track in-process warning signals. Be sure to measure and reward the right things to motivate employees and to have the capability to actually predict future customer perceptions. And remember to “close the loop” with VOC participants as often as possible.
A wide variety of programs can be developed that engage and reward your customers, ranging from those who are delighted with their customer experiences to those who are at risk of defecting. But to realize your full power as a marketer, avoid the mesmerizing effect of focusing on your promoters, or advocates. Remember to systematically address the less attractive feedback from customers, and you’ll make great strides in marketing operations success and your group’s value to the organization.
For more information on this topic, see my recent article, “"Excellent Voice of the Customer Initiatives Drive Growth by Turning Lemons into Lemonade” – Lynn Hunsaker
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June 4, 2009
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