It’s amazing how many B2B companies I come across that still see Marketing as being the department that produces brochures. Thankfully it’s less frequent than it was a few years ago as most have recognised the value of the brand, the impact that lead generation and prospect management campaigns can have on sales effectiveness and the contribution of customer communications to retention rates. They’re beginning to see the value of marketing.
Why then do these same enlightened people restrict their use of the internet to a website and what’s more, a website that is no more than an online brochure (that’s actually out of date)?
A recent survey* highlighted to me why things need to change. It identified that corporate buyers felt that the first port of call when looking for potential suppliers was Search Engines – way ahead of exhibitions and trade magazines. So we should all do more Search Engine Optimisation? Well yes, but it means a lot more than that.
It means that B2B buyers have changed their behaviours and their buying processes and that we need to change our approaches accordingly. It’s great news as it means that we can make use of the attributes that make online marketing so compelling – low cost, high degrees of personalisation, immediacy, ease and speed of response, self fulfilment etc.
It does how ever require a new communications strategy. It’s only by reviewing the entire sales and marketing process that you can identify all the opportunities for increased effectiveness and efficiencies. Web response has been proved to improve both the quality and quantity of leads generated by advertising and direct mail and eBrochures can be built “on-the-fly” to provide exactly the information they need, whilst also saving on the print and fulfilment costs. Online datacapture is less prone to errors and facilitates self qualification and results in a higher submission rate of permission email addresses. Automatic email follow-up keeps them warm and encourages further action and can lead to a prospect management campaign that nurtures them until them enter the buying cycle. Similarly keeping customers informed to generate cross-selling opportunities as well as measuring customer satisfaction levels can all be moved online.
But, it’s not only the changes in buying behaviour that makes this the right time, it is also recent developments in technology and significant reductions in the cost of content management systems and the availability of Rich Internet Applications. We can now build an entire content managed website for as little as £5,000. And it’s viable to develop online applications to tell complex stories in a simple and easy to use format, to provide product selection tools that would enable an industrial buyer to find exactly the widget they need in no time at all and to give an online experience that really motivates people to buy from you.
There really is no excuse for us not to improve our results or to reduce our budgets – the buyers are ready, the technology is available and is affordable, we just need to open our minds and look afresh at how we use the internet.
Mergers and Acquisitions, they’re all about growing your business and rapidly increasing its value. Right? It’s a sure fire way of buying market share or increasing the range of products you can sell to your existing customers. As long as you can get the price right and can arrange sufficiently attractive financing, you can’t fail.
Sadly no. Many experts give M&A activity just a 50% chance of being successful. A recent Deloitte and Touche survey suggests that almost 70% of companies that undertake a merger or acquisition fail to achieve their stated goals. Another report in the US
The problems tend to lie in one of four areas - a clash of leadership styles; conflicting management systems; different approaches to decision making; or failures in communications. It’s worth noting that these aren’t financial issues per se, but that are more about culture, practices and communications – “branding” in fact.
In modern business what differentiates one business from another is less about the products or services you provide and more about how you deliver them - the customer experience. This is in turn is dictated by the culture, the practices, attitudes and behaviour, and communications - all elements of the brand. We may usually refer to them in brand speak as Brand Assets – the things that your business does particularly well, the Brand Promise – the thing that is most compelling about the customer experience you provide, Brand Personality and so on, but what we’re talking about is the promise of and the delivery of a consistent and valued customer experience.
However, in our experience, branding issues are rarely considered prior to a merger or acquisition and usually inadequately dealt with afterwards. The consequences both internally and externally can be catastrophic. Internally the effect on employees in both organisations can be confusion, a loss of purpose and pride, and a dramatic fall in trust and motivation. Externally the effects are similar. But what can you do to avoid this happening?
Here’s six things that will help:
Investigate the target
Make sure that in your investigations of potential acquisition targets you develop a clear understanding of their assets, practices, cultures and the resultant customer experiences even before you look at the financials.
Assess conflicts
Having decided that the brand is attractive make an assessment of whether or not this represents added value to your current and potential customers. It’s all very well them having a need for these additional products or services, but are the practices needed to deliver them successfully consistent with those needed to deliver your existing products or services. Do they, by their very nature, require a different culture to be effective.
Management Buy-in
Make sure that the senior management that will be responsible for running the combined business understand and buy into the goal and understand the strategy for assimilating the acquired business. Not how much money will we make out of this deal, but, how will this deal help us to achieve sustainable profitability
Design the culture
Literally, design the new culture. It may sound perverse to look to create a culture but no two cultures are the same and it is critical that the combined business has a single culture. You have three options:
1. Assimilation – to impose one of the existing cultures onto the other organisation
2. Hybrid – identify which cultural norms are shared and which ones have to change in each organisation
3. Integrated – create a distinctly new culture based on the good points from each
Identify Assets
Be clear about what the Brand Assets of the combined business will be. Identify what it is that your business is going to be good at and which elements are most important in making that a reality. This may mean adopting some practices and assets from the acquired business throughout the organisation.
Align Communications
Review what each of the businesses have been saying about themselves in the past. How aligned are they? How contradictory are they? What needs to change in each so that they reflect the new Brand Promise.
It’s worth noting that communications comes last and this is because what you say about your Brand must reflect the reality of what you are going to deliver and how you are going to deliver it. Whilst it may be seen as the sexy side of branding it only has meaning and will only have the desired effect internally and externally if the experience is as you say it will be.
Obviously, the finances have to add-up, but I would argue that they should be secondary to the branding issues. If the resultant “brand” is stronger and more attractive than the two constituent brands then there is usually a way to finance the deal. If, however, the “brand” does not create value for the customer because of a clash of cultures, contradicting communications, an unclear promise or indistinct points of difference, then, no matter how you structure the deal you will end with a less than 50% chance of success.
It is now accepted wisdom that planning a marketing campaign across all media, in an integrated way and from a customer’s perspective is the right thing to do. But making the transition from a media-led to a media neutral approach is not as straight forward as it might sound.
The Status Quo
Not long a go almost all marketing departments employed the services of a range of agencies depending on their total budgets: a PR agency, an Advertising agency, a Design agency, a DM agency and when needed someone to work on events and other tactical promotions. Each were given their own brief and each worked in their own silo. The result - inconsistent, overlapping and inefficient communications, usually creating confusion rather than creating brands.
But, to be fair, this scenario wasn’t created by the fact that the agencies were specialists but more by the fact that the clients themselves structured their own marketing teams around activities and “media”. They had Advertising Managers, Direct Marketing Managers and PR Managers – all orchestrated by the Marketing Communications Manager or even the Marketing Director.
For many businesses this is still the case and it is still common to find a range of agencies managed in isolation from each other. This makes media-neutrality at best challenging and at worst impossible. So how do you go about making media-neutral a reality?
The Internal Challenge
As with any improvement the first step is to recognise what is wrong with the status quo. For most businesses the answers will lie in the internal structures and practices. There are three key elements to consider: budgets, people, and measurement of success.
Budgets tend to drive planning (which is obviously the wrong way round). It is a process that can wrongly dictate who is employed and what role they take and even what activity they are able to do within their responsibilities. The problem is maintained through evolutionary budgeting. This makes a change in strategy difficult and politically sensitive. So a different approach to budgeting is needed.
People are often a significant element of total marketing costs, and yet whilst lying within the Marketing budget they are a fixed cost rather being seen as part of the cost of the activity itself. Over recent years “headcount freezes” have become more common and this simply encourages departments to try and hold on to what they have, living in fear of having this resource taken away from them.
Changing people’s role is also a challenge. Changing the way the team work can highlight skills gaps and can also threaten status possibly creating contractual issues. So it has to be handled carefully, but restructuring the department is essential to facilitate a change in strategy of this magnitude.
The third area measurement is relatively straight forward to change practically but if the business is used to tracking and monitoring marketing success by media it requires a new measurement regime to go media-neutral and it will result in a period where metrics lose their value as you make the switch.
The Benefits of Media-neutrality
Before looking at how best to make the switch it’s worth reminding ourselves of the benefits. Most of us have witnessed changes in our markets over recent years including increased competition, commoditisation in many sectors, convergence in others – all focusing our attention on the importance of being customer-focused. To gain maximum value from our customers we need to realign all areas of our business to enable us to better meet the needs of the different customer groups.
Media-neutral planning is merely marketing’s way of making this change by using the right media, with the right message at the right time to communicate with each customer segment. It delivers greater relevance, increased efficiencies and improved effectiveness and ROI.
Making the change
It starts with a change of strategy but this often requires a change in mindset. Rather than thinking “each quarter we need to sell X,000 of these and Y,000 of those” you now need to plan around the customer segments – “to generate £X,000’s from this group and £Y,000’s from that group”. Simple.
The reality is that it’s not. It requires a company wide change. Sales needs to be realigned, support needs to be reviewed and customers services will also need to change. It can be done by marketing alone but when the board look to review marketing performance you’ll find that others glaze over as the Sales director is thinking “that’s all very well, but how does it help me sell more widgets”.
So stage one is to construct a business wide strategy that aligns the entire business with the needs of each customer group. The simple fact is that you can’t have a media-neutral plan that promotes products, as media is consumed by consumers and buyers who in turn buy a range of products.
Once the strategy is agreed you can then consider the budgets or should I say reconsider. All marketing expenditure can then be planned around the value, or preferably the potential value of each customer and prospect segment. So rather starting with an Advertising line and an Event’s line begin with Group A (High Value customers) and subdivide into Acquisition and Retention and then divide it further into the objectives – awareness, lead generation etc.
Having worked through each group you may well then be able to group objectives that are common for example Brand building or research. By planning your total spend in this way, prior to identifying “headcount” costs you are also beginning to reallocate people.
Ideally people should take on responsibility for one or more customer groups and should manage all activity focused on that group. Yes it will mean that your DM Manager now has to commission advertising and other media they are not familiar with, but others in the team still have that experience and they need to work together in a matrix during the transition stage.
Measurement now becomes easy, and because people are measured by what they achieve with their customer group, against targets that fall out of the strategy, you are much more likely to find that the marketing activity is much more effective.
External Resources
You are now faced with a decision regarding agency partners. Do you move from specialists to using integrated agencies or do you stick with specialists? The argument against specialists is that you will now have each member of your team briefing and managing each agency partner in turn. Whilst the argument against integrated is that they tend to be Jack of all trades and that quality suffers as a result.
My view is that integrated agencies have evolved quicker than clients. They are more focused on the total demands of communicating with customer groups rather than trying to make their particular area of expertise the solution no matter what the problem.
Whichever route you take, if you are using a range of agencies it’s important to firstly nominate a lead agency and secondly to clearly define the roles and responsibilities. Who is best to take the lead? Well that will depend on your situation as well as on the competencies that exist in each agency.
Managing Media-neutrality
Communication is everything. Regular all agency and department meetings are essential. It’s important that everyone knows what everyone else is doing and that there is genuine desire to work as a team. If you get it right you’ll also find that the combined strategic and creative force becomes greater than the sum of it’s parts and that the agencies get to a point where they begin to manage themselves.
The customer is king
If you haven’t already made the switch then this may all sound too daunting. Equally if you have started to employ media-neutral planning techniques but based around what you’re selling rather than who you’re selling to then taking the final step to planning around customer groups may feel too difficult to contemplate. The reality is, in today’s markets (for most of us) the customer is king. Unless you plan your strategy around them, allocate your budgets according to their value and realign your team to focus on them you’ll only achieve a fraction of what you could achieve.