MarketingSherpa Blog

Confession time…one of my favorite movies is the Will Ferrell classic, Elf. I love the scene where Buddy (the elf) sees a sign outside of a coffee shop announcing that it has “The World’s Best Cup of Coffee.”

It’s quite a value proposition and thanks to Buddy’s innocence (or ignorance) he barges into the shop and congratulates the entire staff for a job well done. The reason it’s so funny is because we know better. Even the staff at the coffee shop knows better.  To believe such a claim is ridiculous.

Yet many companies still have trouble avoiding such preposterous value propositions in their marketing.

According to a recent incentivized survey done by MarketingExperiments (MarketingSherpa’s sister company), 120 out of the 275 (30%) total business plans we reviewed had no real value proposition. Another 60% were categorized as having only limited or substantial value. Only 10% were considered to have a strong, unique value proposition.

In all, on our scale of zero to five, 90% of those surveyed were at or under a two.

It’s an unnerving statistic given that a well-stated value proposition has (according to our research) been proven to get better response rates on everything from business plans to landing pages.

So how do we craft a value prop that isn’t going to induce a side-splitting laugh in your audience?

Well, I have yet another confession to make…

I’m probably not the right person to ask. I honestly don’t have a lot of background with value proposition. But I DID recently attend a workshop on Landing Page Optimization with the Managing Director (CEO) of MECLABS, Dr. Flint McGlaughlin.

In it, he devoted a whole section to getting your value proposition straight. So I’m going to share what I learned there and share a little of my own commentary as well.

A true value prop isn’t dictated in a board room

According to Flint, the basic key to determining a strong value proposition for your company is understanding that a value prop is not usually determined, it is discovered.

It’s a simple shift in thinking that makes a huge difference. Sitting at your desk and trying to manufacture a shiny new value proposition that you think will sound good is usually pretty fruitless.

Prepare yourself for some hard thinking and investigation into the bowels of your company, as we explore four steps to discovering your value proposition…

1. Answer the question: If I am your ideal customer, why buy from you rather than your competitors?
Assuming it was true, “The World’s Best Cup of Coffee” could be an excellent value proposition. The ideal customer in this case is your typical Manhattan coffee drinker and the reason they should buy coffee there is obvious – it’s the best in the world.

The problem is, it’s not true. The modern consumer simply does not believe your overindulgent hype. So the ideal customer is put off and ends up without a reason to buy coffee there instead of the better-looking shop across the street.

Admittedly, this is an extreme example. Yet marketers make this mistake every day. You likely come across this marketing jargon-filled hype every day. Does a two-person B2B tech start-up really offer a scalable solution for Fortune 500 companies, for example? Just because you say it in your marketing material doesn’t make it true. And your savvy audience is well aware of this fact.

When you’re answering this question for your own value prop, it’s important to note here that you are putting yourself into your customer’s mind by answering as if you were them. So spit out the Kool-Aid and be a little skeptical.

2. Compare your answer with the claims of your main competitors.

Of course we all know that just about anywhere you go, there’s a coffee shop claiming to have the world’s best cup of coffee. Again, that’s part of the comedy of this scene.

If any of your competitors can say the same thing about their products or business as you without completely lying, you don’t have a strong value proposition.

While your mother probably told you how special you were, a unique snowflake unlike all the other kindergarteners in the world, the same can’t automatically be said about your product offering and company. Is it really unique? Or do people only buy from you on a lark or because they haven’t stumbled across your competitors yet?

3. Refine your value proposition until you can articulate it in a single, instantly credible sentence.

The problem with the coffee shop’s value proposition was that it wasn’t instantly credible. No one believes their coffee is the best coffee in the world because there’s no way to prove that.

Your value proposition must be instantly believable. A great way to do this is to add numbers to your value proposition. If that coffee shop had said something along the lines of, “9 out of 10 people preferred our coffee to Starbucks”…you’d be more likely to believe it.

Another strategy is to be as specific as possible. Let’s say you’re not quite there yet with the imaginary value proposition above. What if it said, “9 out of 10 people preferred our coffee to Starbucks in a double-blind taste test?”

The double-blind taste test adds a dimension of specificity that increases the credibility of the sentence.

4. In the end, you must test your value proposition.

No matter what you do to come up with a value proposition, there’s no way to guess what resonates the best with your audience. You need to test it.

Your value prop should be visible in every step of your sales process. Wherever you display it, test different phrasing, angles, and ideas to get deeper inside the mind of your customers.

The better you know what they find valuable, the better you can serve them.

The next stop of the MarketingExperiments Landing Page Optimization Workshop tour is on June 1 in Atlanta. It will also be taught by Dr. Flint McGlaughlin. Then our MECLABS team will take the workshop on the road to New York, San Francisco…and more cities to be announced.

Related Resources

B2B Marketing: On Occam’s razor and value propositions

Optimizing Landing Pages: 3 Keys to Increasing Conversion Rates

Powerful Value Propositions

Value Proposition: Our research team answers your questions

Landing pages get a lot of love. Here at MarketingSherpa and MarketingExperiments we often write about landing page optimization, and offer case studies on how marketers are testing and improving landing page performance. And landing pages deserve all that attention because often those pages are the direct connection between a marketing campaign and a closed deal. We think so highly of landing pages at MarketingSherpa we just released a publication dedicated to LPs — the 2011 Landing Page Optimization Benchmark Report.

The homepage is a channel, not a destination

But because landing pages command so much real and virtual ink, the homepage can seem neglected. The first thing to consider is the homepage is unique to a website. For companies that only offer one product or service, the homepage may be no different than a landing page.

But companies with many products, services, divisions, etc., must look at homepages as a drastically different animal than a landing page. Unlike the landing page where you want to get website visitors to the LP, the homepage is channel where your goal is to get the visitor through the page.

The homepage is possibly the toughest page on a website to test because it “serves many masters” and typically has multiple objectives to achieve.

The usual elements in a homepage to test do overlap with landing pages:

• Eye path direction
• Strength of value proposition
• Color combination
• Image relevance

And testing a homepage involves five basic steps:

You may notice one word features prominently in each step — objectives. Homepage objectives should be broken into three categories:

1. Primary — these are long-term and should have high revenue potential
2. Major — short-term and are typically tied to a marketing campaign or other internal need
3. Minor — functionally necessary elements to the page such as navigation or legal copy

Taking a closer look at homepages, how they differ from landing pages and how tricky they are to actually test and optimize, caused one chart from the Landing Page Optimization Benchmark Report to really stand out.

Boris Grinkot, Associate Director of Product Development, MECLABS, is the author the Landing Page Optimization Benchmark Report and he took a few moments to share his thoughts on homepage optimization and metrics.

Before we get into the questions, here’s a quote from the report (I highlighted the final sentence):

A critical issue becomes the quality of the traffic that the homepage sends into the website. The quality of the traffic is broadly the degree of match between the visitor and the offer – in other words, the predisposition to convert. Reducing bounce rate may be a short-sighted key metric if more visitors get through, yet those are not the visitors that would ever be interested in becoming customers. Dedicating significant page real estate to a $10 gift card offer can explode the clickthrough rate (and conversely, minimize bounces), but it may turn away visitors exploring a multimillion dollar RFP.

In your LPO Benchmark Report, you mention the homepage is possibly the most difficult page for designing a test …

Boris Grinkot: Measurement on the homepage is complicated because so many things typically happen between it and the conversion step. The general point is that when looking at the funnel holistically, a test on the homepage can affect different metrics differently, and sometimes you can get contradictory results — bounce rate reduced = good, conversion rate reduced = bad.

The homepage as any entrance page acts as a filter, and changing it does not only linearly affect clickthroughs to the rest of the funnel, but can affect the quality of visitors that click through — in other words, the segments.

So, what metrics are most important when testing a homepage?

BG: It’s important that marketers monitor several different metrics to get a complete picture of what’s going on. Bounce rate or clickthrough rate measures what happens immediately on the homepage, or wherever it’s measured, but misses how this page affects the rest of the funnel. Overall conversion rate (CR) measures performance of the site as a whole, but ignores where the leaks might be.

More intricate measurement — such as using “active segments” or “goals” — can tell you what happens with visitors who viewed a particular page, meaning that a virtual segment is created based on what the visitor experienced. Segment-specific CR can be much more meaningful because it takes specific page(s) into account.

Boris Grinkot will be providing insights from his Landing Page Optimization Benchmark Report and moderating a panel on “Overcoming institutional barriers to optimization implementation” at the first MarketingSherpa Optimization Summit coming up June 1-3 in Atlanta.

Related Resources

Homepages Optimized web clinic

Homepage Optimization: How sharing ideas can lead to more diverse radical redesigns

Homepage Optimization: How a more logical eye-path led to 59% increase in conversions

Homepage Optimization: Radical redesign ideas for multivariable testing

B2C Testing: A discount airline looks to increase conversion

(Members library) — Office Depot Site Overhaul Lifts Conversions 10%: 7 Tactics to Target High-Impact Improvements

We just launched the registration landing pages for our upcoming MarketingSherpa B2B Summits — the first will be held September 26-27 in Boston, and the second October 24-25 in San Francisco — and looking toward those events got me thinking about all the learnings I’ve taken away from these last months of digging deeply into the complex world of B2B marketing.

Since I began covering the MarketingSherpa B2B beat toward the end of last year, I’ve had the opportunity to speak with many marketers, industry experts, and our internal researchers and thought leaders here at MECLABS (MarketingSherpa’s parent company). One area that really separates B2B from B2C marketing has come up many times — the complexity of the B2B sale and the length of the B2B sales cycle.

Our research, based on interviews with 935 B2B marketers in the MarketingSherpa 2011 B2B Marketing Benchmark Report, found marketing to a lengthening sales cycle as a growing concern, and the third-most-pressing challenge for B2B marketers today (trailing only quality and quantity of lead generation):

That same report shows that more than one-third of B2B sales cycles from first inquiry to closed deal last seven months, or longer:

During my B2B beat reporting I’ve learned quite a bit about three very interrelated marketing areas that address this challenge — the strategy of lead nurturing, the tactic of drip marketing campaigns and the use of marketing automation software tools.

Growing the lead into a sales-ready prospect

A lead generated is very rarely a lead ready to hand off to Sales, and when your sales cycle is measured in months, or even longer than a year, you want to have a lead nurturing program to keep in touch with that potential customer and turn them into a sales-ready lead.

Brian Carroll, Executive Director of Applied Research, MECLABS, explained to me that most lead nurturing programs don’t have an impact on conversion before at least five meaningful touches, and that the important thing is to continue nurturing leads whether it takes five touches or 25 touches to get them to the sales-ready point.

He says, “If you have a nine-month sales cycle, you should nurture a lead in those nine months, and that’s at a minimum level. So that means nine nurturing patterns during the course of that lead.”

Here’s a table from the 2011 B2B Marketing Advanced Practices Handbook outlining some lead nurturing basics:

If you notice, content is a major aspect of that table. That’s because content marketing is a key element in lead nurturing. New information about your product is a good reason to reach out to the nurtured lead. So is a vendor-agnostic article from an industry thought leader that provides usable information or advice on your business area.

Other touches might include an invitation to an event, such as a webinar, or maybe an executive summary and key takeaway list from an event along with links to video or audio excerpts from the presentation.

Content marketing is not the only piece in a lead nurturing campaign, but it should be an area of high priority focus.

Keeping those touches coming

If lead nurturing is an overall strategy to meet the challenge of a long sales cycle, drip marketing is a specific tactic to execute that strategy. Drip marketing involves automatically sending marketing messages to your list via email or other methods. The messages are “dripped” in a series based on the specific behavior or status of the recipient.

Here’s Jeanne Jennings from a SherpaBlog post on drip marketing:

Drip campaigns take their name from drip irrigation, which saves resources by allowing water and fertilizer to be consistently delivered directly to the roots of plants. There’s less waste than with sprinklers and topical fertilizer application; drip irrigation also provides a consistent level of moisture to the soil, rather than the “soak and dry” experience that sprinklers provide.

Drip marketing campaigns are most commonly delivered via the email channel because of its short turn-around, quick delivery time and cost-effective nature. A drip campaign involves a series of messages that are sent or “dripped” in a predefined order at a predefined interval. Each message in the campaign stands on its own but also builds on the missives that have come before it. A drip campaign is a response to a specific behavior or status of the recipient – and it encourages a specific action.

… and then SkyNet took over

Actually April 19^th has passed and I’m pretty certain no terminator robots are heading back in time as I write this post, but lead nurturing does have a powerful tool that makes the entire process much easier to manage — marketing automation software.

Marketing automation offers many benefits for marketers:

• It provides a trackable database and measurable analytic results for marketing efforts
• It, well, automates many marketing tasks that previously had to be handled manually
• For a long sales cycle, multi-touch lead nurturing campaign, it allows marketers to focus on determining the creative elements of the effort — email copy, content with each touch, etc. — and setting the timing and triggers for each touch, and the software handles the actual execution of the campaign

A small business with a handful of leads to nurture can most likely run the campaign manually. A large corporation with hundreds, thousands, or even many more leads will require marketing automation to run an effective lead nurturing program.

Related Resources

Members library – B2B How-To: 5 lead nurturing tactics to get from lead gen to sales-qualified

Members library – How-To Increase Relevance: Integrating drip marketing into an email campaign

No Budget and Less Time? Lead Nurturing in Five Simple Steps

Lead Marketing: Cost-per-lead and lead nurturing ROI

B2B Marketing: Calls-to-action and the business buying cycle

Members libarary — How and When to Use Content in the B2B Sales Process

Quick quiz, savvy marketers.

What is going on in this picture?

A.      Their flights were canceled and all the hotels are booked up, so they’re camping out on the street for the night.

B.      They are pioneers of the latest fad – urban camping.

C.      They represent a new demographic – homeless yuppies. They bought a McMansion that was foreclosed on, yet took all the nice gear they bought at REI and now are forced to use it merely to survive.

D.      They are the natural consequence of some very impressive loyalty marketing.

The answer, of course, is D. They are camping out, on line at the Fifth Avenue Apple Store to be one of the first few people to buy an iPhone.

Polish toilet paper and well-designed telephones

“I remember once, a relative in France sent us three rolls of toilet paper. We couldn’t believe how soft it was. We were in heaven,” my colleague, MECLABS Research Manager Zuzia Soldenhoff-Thorpe told me recently. She grew up in Communist Poland, and her parents would wait in line for six hours in the Polish winter just to buy toilet paper. Scratchy, rough toilet paper. Not the fancy French stuff.

And that is understandable. Toilet paper is a necessity. Communist Poland rationed it.

But what would drive otherwise rational people in the world’s richest nation to wait in line for a telephone? Well, loyalty. In their view, they have solidarity with the brand.

So, what are the benefits of creating solidarity forever with your customers?

The value of a loyal customer

“A loyal customer is less price-sensitive and nearly immune to competitive entreaties. A loyal customer is often open to trying line extensions. Finally, a loyal customer is much more willing to forgive your inevitable small fumbles. (Does anyone seriously think Apple is going to lose core customers because iPad production delays due to the Japanese situation? Not likely.),” said Micah Solomon, author of “Exceptional Service, Exceptional Profit.”

On the other hand, sometimes customer acquisition costs are so high that you need loyal customers just to break even. “It is estimated today that a large credit card portfolio has an 18-24 month window to repay the initial acquisition cost of that customer. Without loyalty and engagement you are losing money on every acquired customer,” said Mark Johnson, CEO, Loyalty 360 (the Loyalty Marketing Association).

A few data points to consider:

• It is six to seven times more costly to acquire a new customer than retain an existing one
• Brand advocates recommend and share products two to four times more than the average consumer
• 60 percent of customer who hear of a positive (or, in fairness, negative) experience will change their buying habits
• Over three years, customers referred by online grocery shoppers spent an additional 75 percent of what the original shopper spent

Of course, to benefit from that, first you must get the referral, and then you must keep them as customers for that long…

How to win and keep loyal customers

So, how do you instill loyalty? If your target audience is a dog, the answer is easy (Tummy Yummies). If, however, your audience is the jaded, savvy, demanding, rapidly evolving, skeptical, fickle, streetwise, cynical modern consumer, what then?

That’s no easy question to answer. So, I passed it around to a few industry leaders to see what advice they could give you to help you foster loyalty in your customers…

• Be transparent – As Dr. Flint McGlaughlin, Managing Director, MECLABS says “Tell me what you can’t do, and I might believe you when you tell me what you can do.
• Be accessible – “Make your company extremely easy to reach via your marketing materials and correspondence,” Micah Solomon said. “Don’t – if you can avoid it – send out mass emails from a ‘do not reply!’ address; either have the address accept replies or have it extremely clear how to easily reply through an alternative mechanism.”
• Deliver a rewarding experience, not just “rewards” – “Loyalty is MUCH bigger than just points, it is expanding to the process, techniques, software, ideas, communication mediums and interactions that create and engender engagement and loyalty. It is NOT ABOUT POINTS anymore,” Mark Johnson said.
• Step out of your shoes – “You cannot treat others as you would like to be treated. Instead, you must identify what they want and treat them as they want to be treated,” Bob Lucas, Managing Partner, Global Performance Strategies advised. “Talk to your customers and solicit their opinions and expectations, then build marketing initiatives around them. This individualized approach to communicating with others is more likely to result in greater customer satisfaction, retention and loyalty.”
• Less can be more – “Every day, we are bombarded with messaging from brands trying to hold our attention, and the ability to communicate a relevant, personalized message that appeals to your audience plays a crucial role in engagement and loyalty,” according to Rod Hirsh, Global Director, Brand and Content, Thunderhead. “Establish a baseline of what good communication practices are and make it a policy to exceed expectations. Aim to streamline and cut excessive communication while at the same time creating a better customer experience.”
• Build a relationship, don’t just sell – “Relationships trump product. Anyone will tell you that,” said Andreas Ryuta Stenzel, Marketing Director, TRUSTe. “Sales and Marketing build and own relationships at scale more than almost any customer service organizations, especially these days with the more personal touches that automated nurturing and social media bring to the table.”

Here are a few thoughts of my own as well. And I’d love to hear what you’ve learned as well.

• Be the customers’ advocate – Always ensure your company is delivering true value to your customers, not just a value proposition. You are the one making a promise to your customer with your innovative, creative, out-of-the-box marketing campaigns, so you also better be the one making sure your company comes through on that promise. Of course, that is no small task and likely involves Sales, Product Development, Manufacturing, Customer Service, and many more parts of your organization. But just because you cannot perfectly complete that challenge, doesn’t mean you’re exempt from trying. Or as Rabbi Tarfon said, “You are not required to complete the task, but neither are you free to desist from it.”
• Don’t be shady – As marketers, we are always trying to be persuasive. But, c’mon, there are limits. Dishonest marketing breeds disloyal customers.
• Radiate passion – You can’t expect passion from your customers unless you live it and breathe it yourself. Yes, we’ve all got bills to pay. Yes, we all need a job. But when and if possible, market things you are truly passionate about. Or spend enough time with your customers to understand why they really care about your products. Sure, it’s easy to do this if you’re a Harley enthusiast. But even a VP of Sales and Marketing for an industrial hose company can find a passionate way to communicate with the audience.

Related Resources

The Last Blog Post: How to succeed in an era of Transparent Marketing

The Last Blog Post: Marketers must embrace change

PPC Ad Optimization: Testing, unique landing pages, and honesty

Good Marketing: How your peers brought joy to the world (and their boss)

Over the last two weeks I’ve covered a number of angles on lead nurturing. Last week’s Sherpa B2B newsletter took a look at five lead nurturing tactics, and yesterday’s blog post was on why you should consider nurturing leads lost to competitors along with tips on how to do just that.

Today, MECLABS’ Executive Director of Applied Research (Full disclosure: MECLABS is the parent company of MarketingSherpa), Brian Carroll provides insight on how to look at both cost-per-lead generated in terms of lead nurturing and measuring the success of a lead nurturing program through return-on-investment (ROI).

Cost-per-lead is the wrong metric

Although many marketers are interested in the cost-per-lead number, Carroll says this is the wrong metric to focus on. He explains by saying if a lead is generated at a low cost, but never contributes to the sales pipeline, it is a wasted expense. Great cost-per-lead number, but terrible (non) contributor to the bottom line.

Carroll believes two metrics that are better measures across the entire process are cost-per-opportunity and cost-per-pipeline revenue. Cost-per-opportunity helps you understand how Sales accepts and pursues leads, and in the long run that metric shows if those leads are actually helping Sales, and if Marketing is contributing to the pipeline.

He says to take a look at your entire marketing expense-to-revenue, and then contrast that number to expense-to-revenue after implementing lead nurturing.  He adds lead-to-sale conversion rate is the most important metric in the entire process.

Carroll states, “We have examples of nurturing programs returning a ten-times return for every dollar spent, and we had other examples of nurturing programs where it is a fifty-times return for every dollar spent, meaning for every dollar that we put towards an existing lead, we are generating $50 of top line revenue.”

Here is a list of metrics and indicators from one of Carroll’s blog posts:

These are real-world metrics that every marketer should track in their lead generation program:

• Number of inquiries? (people who raised their hands)
• Number of leads? (qualified as “sales-ready”)
• Number of opportunities? (leads that move to pipeline)
• Number of closed sales? (generated from marketing leads)

If marketers know those metrics they can start to track the following key performance indicators:

• Inquiry to lead ratio (cost-per-lead)
• Lead to opportunity ratio (cost-per-opportunity)
• Lead to pipeline revenue ratio (cost-per-pipeline revenue)
• Lead to sale (win) ratio (cost-per-closed sale)

A value-driven mindset requires leaders and marketers to plan and budget for the long term and to take a more holistic view that goes beyond cost-per-lead budgets.

Using ROI to measure lead nurturing success

Carroll began this conversation by describing lead nurturing investment. He gives an example that if you plan on spending $100,000 on a new lead program, $25,000 of that investment should be allocated to lead nurturing. Lead nurturing should command about 25 percent of a lead campaign’s budget.

When looking at ROI goals for lead nurturing, he believes you first look at the objective of the lead generation program — ten times, 20 times  return or whatever goal you set — and use that goal as a starting point for the lead nurturing goal.

He adds what companies generate from a lead nurturing program is going to be affected by a number of factors:

• The product sold
• The brand
• The value proposition
• The offer
• The ability of Sales to convert leads into revenue

It’s also important to remember nurturing programs take longer to provide a return because a typical lead nurturing program involves multiple touches over a period of time, but marketers can point to building momentum toward final conversion as a positive result of nurturing.

Carroll says, “I documented a case study of someone seeing a four million dollar lead nurturing pipeline impact in year one, and that same company, the following year, with the same budget from that same lead nurturing program saw a fourteen million dollar pipeline impact because returns on nurturing over time grew to be exponential.”

A lead nurturing analogy

To complete all this talk about lead nurturing, here’s an analogy from Carroll:

I worked on a farm growing up and the farmer said, “You don’t pick your corn to check if it is growing. You have to nurture it. It needs sun, it needs water, it needs good soil to provide a yield.” And the same is true in these relationships that we are building as well.

Related Resources

No Budget and Less Time? Lead Nurturing in Five Simple Steps

Are Marketers Measuring Their Success or Someone Else’s?

Lead Nurturing and Management Q&A: How to Handle 5 Key Challenges

(Members library) Lead Gen Overhaul: 4 Strategies to Boost Response Rates, Reduce Cost-per-Lead

Every company is going to define its process, but the basic lead lifecycle consists of three parts: lead generation, lead nurturing and hand-off to Sales. Lead nurturing, particularly in B2B companies, is key because that stage turns the face in the crowd with the raised hand asking for more information into a sales-ready prospective customer.

Adam Blitzer, Co-founder and COO of Pardot, a software-as-a-service (SaaS) marketing automation platform geared toward small- to mid-sized businesses, recently shared an interesting lead nurturing idea he has — nurturing leads lost to competitors.

Often once a prospect makes a purchase decision, and that choice is with a different company, the lead completely leaves the pipeline. Blitzer says there are good reasons to keep that now future prospect in a nurturing program, and discusses how Pardot continues to nurture lost leads.

You have something of a counterintuitive idea — actually nurturing leads lost to a competitor. Is this idea based on research or other metrics?

Adam Blitzer: It really started more as an experiment internally. Since the nurturing is automated, with no real work required on the part of the sales rep, there’s no reason not to try out an idea like this. We saw a fair amount of prospects come our way because they were unhappy with their current vendor, so it made sense to us that someday these leads lost might also be unhappy with their choice and be looking for a new solution.

We started nurturing lost deals back in 2007 and noticed that within a year, we started to win back a reasonable percentage of them.

Explain the reasoning behind nurturing lost leads.

AB: If you think about it, it makes a lot of sense to keep in touch with those lost leads – if your product was on their short list, they saw something the liked in what you are offering. Your sales rep has already invested a good amount of time building a relationship with the decision maker.

Putting them on a nurturing track allows you to keep them informed of new features and updates that you’ve pushed out over the course of their current vendor contract. In a fast-growing, SaaS industry like our own, the scope of a product can change greatly over the course of a year. It’s possible that the feature that cost you a deal might be now be implemented or that you’ve added something new and innovative that puts you leaps and bounds ahead of the vendor that your prospect chose.

It’s really just a way to keep your company top-of-mind in case they are looking to make a change. It isn’t unusual for a company to shop around when their current contract is approaching renewal.

There is also the simple matter of making the most of your marketing dollars, which is the goal of any nurturing program. You spend a lot of money generating leads and even more to generate sales opportunities. If they convert, it is likely a very low touch sale (this time around). You have already spent the funds to try to convert the prospect in the previous year and do not have to re-spend it when winning back the client.

How can a marketer begin reaching out to these lost prospects with a track specific to the vendor who won the deal?

AB: If a good relationship was established with the prospect during the sales cycle, it can actually be as simple as the sales rep setting up the campaign by saying that they wish them luck with their implementation, they’d love to keep in touch and they’ll send them over any information they run across that might be helpful.

Marketers know their competitors well. They can easily set up a different “lost opportunity” track for each competing solution, with content specific to that vendor.

The challenge is keeping automated content “fresh.” The easiest way to do this is to have fairly static email templates that point to dynamic or constantly updating content.

A great example is to have an automated email (personalized from the sales rep) suggesting the prospect take a look at their newest feature and interesting blog post. In both cases the link would just point to a page that is dynamically updated anytime a new feature or post is produced. That ensures that anytime the email is sent out, it points to something fresh and relevant, all without the marketer ever needing to change the nurturing program or email template.

How does timing come into play in this variant on traditional lead nurturing?

AB: The timing or cadence of the nurturing program will actually depend on the competitor to whom you lost the deal. If you know your competitor typically does annual contracts, you can start the program gradually (perhaps one email in each of the first two quarters) and then pick up steam as the prospect is closer to his renewal date.

One of the nurturing best practices we always try to remind people of is to know when to stop. If at any point a lead responds to a nurturing email — that’s a good time for the sales rep to pick up and engage personally with the prospect. And if you’re going to do this, it’s absolutely key that the person be removed from the campaign at that point, to avoid any conflicting messaging. It can be easy to forget this step, but it is so important.

Should the nurturing messaging be based on the winning vendor? If so, how?

AB: It is ideal to use the winning vendor’s name and any other information if possible. This makes the messages much more personal and less likely to be seen as automated. If you do have specific information about the vendor, it can’t hurt to point out the differences in your products, like where you feel yours excels over the competitor.

Should nurturing lost leads have an informal feel, or should these lost prospects be strongly pursued?

AB: While I do think it can be effective to use vendor-specific information that has a strong message, it’s often best to start out with a softer sell, especially at the beginning of a nurturing program. Since the prospect already has an established relationship with the losing sales rep, a personal, informal tone tends to work well.

These emails might include new features about your own product or perhaps even best practices information that could be helpful to them even as they are using a competing product. This best practices information still acts as a reminder that your company is a thought leader in the space and helps keep your brand top-of-mind.

Related Resources

B2B How-To: 5 lead nurturing tactics to get from lead gen to sales-qualified

B2B Marketing: The 7 most important stages in the teleprospecting funnel

(Members library) Lead Nurturing and Management Q&A: How to Handle 5 Key Challenges

Web Clinic Replay: How Lead Nurturing Produced $4.9 Million Pipeline Growth in Eight Months

No Budget and Less Time? Lead Nurturing in Five Simple Steps

photo by: Phil Roeder

I’ve been browsing the new MarketingSherpa 2011 Social Marketing Benchmark Report this week and soaking up the rich data. One of the first charts that struck me is a bubble chart on social marketing tactics.

First, I want to say, I love these bubble charts. They provide a three-dimensional view of the data on a given topic. Our researchers do a great job of packing them full of information without making them confusing.

This chart graphs the effectiveness, difficulty and popularity of each social media marketing tactic. You’ll notice a clear positive correlation between a tactics’ level of difficulty and its level of effectiveness.

Hard work pays off

For those of you who have not brushed up on your statistics lately (as I just brushed up a moment ago) I will note that a positive correlation between two factors means that as one factor increases, the second factor increases. For example, there is a positive correlation between my consumption of ice cream and the temperature outside.

Looking at this chart, it’s clear that the most effective social marketing tactics are also the most difficult, and vice-versa. Blogger relations — the most effective tactic reported — is also the only tactic to break into the 70%-range in terms of marketers reporting it as “very” or “somewhat” difficult.

You’ll also see that the three most-effective tactics — blogging, SEO for social sites, and blogger relations — are known to require significant amounts of time and effort before results are shown.

Every tactic is somewhat effective

Take a look at the scale on this chart’s Y-axis (level of effectiveness). Those listed percentages correspond to the number of marketers who reported a tactic as “very” effective. What they do not include are the marketers who reported a tactic as “somewhat effective.”

Looking at the chart, you might guess that adding social sharing buttons to emails is a waste of time — but don’t be too quick to write this tactic off completely. Only 10% of social marketers reported it as “very effective,” but 55% rated it as “somewhat effective” (found deeper in the report). With a total of 65% of social marketers reporting at least some effectiveness, these buttons might be worth the small investment they require.

Also, since adding social sharing buttons bottoms-out the Y-axis here, every other tactic listed has more than 65% of social marketers reporting at least some effectiveness. Here are some examples:

• Social sharing buttons on websites: 69% say at least “somewhat” effective
• Advertising on social sites: 73%
• Microblogging: 75%

Related resources:

MarketingSherpa 2011 Social Marketing Benchmark Report

Free Webinar: Best Practices for Improving Search and Social Marketing Integration

Marketing Research Chart: Using social media as a list-growth tactic

Inbound Marketing newsletter – Free Case Studies and How To Articles from MarketingSherpa’s reporters

Earth Day is coming up tomorrow, so with that in mind, we are providing information on green marketing from an industry expert. Shel Horowitz is a green marketing consultant, and along with Jay Conrad Levinson, co-author of “Guerilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet” (published by Wiley in January 2010.)

Today’s B2C newsletter case study features the guerilla marketing tactics Horowitz used to promote the book, and he also took the time to share some of the basics of green marketing for this blog post.

What is “green marketing?” What are some of its key principles?

Shel Horowitz: It has two parts: First, using green technologies to do the marketing (e.g., e-mail—ideally, with servers powered by clean and renewable power sources — vs. postal direct mail that consumes lots of trees and fossil fuels, teleseminars and webinars vs. in-person events). Second, marketing a green product/service/company/organization/idea and reaching the green consumer with a green-friendly message.

Principles:

• Looking systemically and holistically at problems/solutions, goals/achievement paths, which leads to a lot of creativity both in product development and in marketing.

Examples: Go Flushless drastically lowers water consumption by neutralizing the odor and staining properties of urine, thus cutting down the number of flushes.

Sustainable Garden Supply sells “vertical gardens” about the size of a water fountain that urban apartment dwellers can use to grow food in their apartments.

Hydros Bottle allows you to drink clean filtered water anywhere you travel without the incredible waste of disposable water bottles (a filter is built into a reusable water bottle).

• Creating marketing that appeals to both a customer/prospect’s self-interest and global interest.

Examples: Marcal doesn’t just say, “buy our recycled toilet paper”. It says, “help save 1 million trees (by buying the toilet paper).”

Ben & Jerry’s talks as much about fair trade, environmental sustainability, and providing jobs to the severely disadvantaged as it does about the quality of its ice cream.

• Thinking about how to turn competitors into allies and partners, rather than enemies—joining forces to provide creative approaches that would be harder to do on your own.

Examples: The Empire State Building retrofit involved at least six different companies, each with particular strengths.

My launch of “Guerrilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet” tapped into many other marketing consultants and leading figures in the green business movement, all of whom could be seen as competitors (from my co-author on down).

• Respecting the customer’s intelligence; involving the customer or prospect as a partner in educating the world.

Tell me four things about green marketing that would surprise most people.

SH: 1. Often, the green approach is actually cheaper (which is why extremely profit-driven companies like Wal-Mart have become major players in sustainability).

2. If you do a good job selling the value of your green approach to both self-interest and global interest, green consumers tend to be less price-sensitive and more willing to pay extra for a green product or service (within reason).

3. Transparency is the key to avoiding accusations of greenwashing. Don’t claim to be super-green if you’re really only part-way there. Explain how far you’ve gone down the path, and what further steps you’ll take in the future.

As people take time to educate themselves, you will see huge backlash against, for example, the nuclear power industry in the coming years—which falsely claims to be clean, carbon-neutral, and safe. It will be a lot of years before BP can again claim to be a green company, when the Gulf oil spill showed the whole world that it had been lying.

In the book, I discuss a bottled water campaign that got Nestlé hauled into court, and I show how a few minor wording changes would have made the ad claims transparent—and bullet-proof.

4. The market will respond positively when you make substantiated claims; not to do so is to forfeit a huge marketing advantage.

Is this a topic all marketers should be interested in? Why?

SH: Absolutely! Green-sympathetic “Cultural Creatives” make up about 25 percent of the marketplace and rapidly growing, so this is a big market that people should pay attention to. In the coming years, companies that can’t legitimately claim to be green will be left behind as consumers seek greener alternatives.

Related resources

Website for “Guerilla Marketing Goes Green”

(Members library) Going Green: How to Transition Catalog Users to Email & Lift Conversions 19%

(Members library) Don’t Make These Common Green Marketing Mistakes

Conversion diagnosis: Nature.org’s carbon footprint calculator

Backing Up Green Messages – Part I

Back Up Your Green Messages by Flexing Your Muscle

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photo credit: Pedro1267 on Flickr

Think about how many emails you sent yesterday. Now think about how many your company sent yesterday — to customers and coworkers. Probably thousands of unique emails, right? That is a mountain of content, but little of it gets used for marketing.

I spoke last week with Chris Baggott, CEO and Co-Founder of Compendium (also co-founder of ExactTarget). During our discussion, Baggott pointed out two content-rich resources that marketers often overlook: their email marketing campaigns, and their social media profiles.

Marketing emails, for example, often tell a story or feature content that is not published elsewhere. The content is not indexed by search engines — but it could be if published online.

Also, the comments and conversations on your Facebook profile typically never escape the walled garden. But you can grab that content and incorporate it into your marketing.

“We’re working on breaking down content silos to be able to pull content from anywhere and distribute content anywhere,” Baggott says.

Here are some examples Baggott provided of how some companies are breaking down content silos and combining email marketing, social marketing, natural search and content marketing:

Publishing emails for long-tail search

One of Baggott’s first points was that a company’s emails are a huge untapped resource for content. Of course, there are your marketing emails, as mentioned above. But even your sales and customer service emails can be published.

Sales and service teams write thousands of emails to answer customers’ questions. Questions such as:

• What is the best product for my situation?
• When would I have to update my product?
• Will this product work while I’m traveling?

The answers to these questions are extremely specific to each customer’s situation. If published, they’re potentially valuable for long-tail (low volume, highly qualified) search traffic. What is the best parka for sub-zero temperatures? That sounds like a Google search to me…

Of course, not every email you send will be valuable. They should be screened before publishing, but you could identify several emails to publish each day.

Collecting and leveraging user-generated content

Baggott also mentioned an email strategy to gather and use content in your program. Here’s the process he laid out:

1. Send a triggered email asking customers for reviews, testimonials, or other types of user-generated content. These emails can be sent after customers use a product, such as after they’ve stayed in a hotel room.
2. Publish that content online to help attract natural search traffic and encourage visitors to sign up for your emails.
3. Send another triggered email asking customers to share their content with friends on social networks.
4. Use the content in marketing emails or nurturing campaigns.

The content generated, again, will be very specific to each customer’s situation. If you have good information in your database, you can match the content to subscribers’ attributes and use it to send them targeted, highly relevant messages.

“One of the biggest problems we’ve always had with dynamic content [in email marketing] is the content,” Baggott says. “The problem isn’t that I don’t have enough data, or the tools to make it easy to send relevant emails. The problem is that I don’t have enough relevant content to send to the right person.”

Related resources

Social Media Marketing: Turning social media engagement into action at Threadless

Inbound Marketing: A pioneering YouTube video strategy

Marketing Research Chart: Top tactics for delivering relevant email content

Marketing Research Chart: Using social media as a list-growth tactic

Search Marketing: Capture future seasonal traffic lifts by preparing today with these 4 SEO factors

Inbound Marketing newsletter – Free Case Studies and How To Articles from MarketingSherpa’s reporters

Every advertising agency, SEO specialist, and PR firm likes to be seen as a partner, not a vendor. And that may well define your relationship. But, go down to accounting and explain that relationship, and they’ll laugh in your face.

And for good reason. While, hopefully, you do have that close knit partner relationship, at the end of the day, this is a financial arrangement and you must maximize the value of that arrangement.

On the face of it, performanced-based pricing seems like a no-brainer. You get a guaranteed result, or you don’t pay.

Is this a great country, or what?

Like many things, the devil is in the details. First of all, you have to keep in mind that the vendor knows the metrics far better than most prospective clients do. That means, in many cases, the vendor is selling the illusion of risk.  Second, and more importantly, you have to be sure the result you are paying for is the result you really want.

Let me show you what I mean. I’ll use a teleprospecting vendor as an example, and highlight the lesson you can get out of each example for the type of vendors you work with every day.

What intermediate metrics truly contribute to your success?

In B2B lead generation, a common result is defined as an appointment for sales people. The cost per appointment generally runs from about $400 to $800, depending typically on volume, your brand and the target.  If you can provide the vendor with the people your sales team absolutely, positively wants appointments with, you’re in business.

In my case, I would gladly take appointments with CMOs of B2B companies with $500 million or more in revenue. At least, that would probably be my immediate response. Of course, there might be a few CMOs in that target that oversee pure e-commerce plays, or highly commoditized, low-end products that do not require lead generation, my area of expertise (or, so I would like to think). Therefore, I might pay for some appointments that I don’t really want. So, the real cost for a qualified appointment might be a bit higher than I originally agreed to.

Then there is the hidden cost: sales productivity. The purpose of such services is to increase sales productivity. For these kinds of top executive-level appointments, the representative might very well expect to meet face-to-face with the CMO. So, you have to add to the equation the cost of the commuting time and meeting time. Loaded field sales costs for complex solutions often start at about $100 an hour and can be $500 an hour or more, for elite, high-end key account sales people.

Very quickly, a $500 appointment can become an $800 or even $1,500 appointment, especially if any serious commuting takes place. If the conversion-to-deal is high or the revenue-per-deal is high, then who cares? In many cases, however, buyers find out that 20 to 30 percent of the appointments are not a fit. Now the cost of the qualified appointment goes way up, and the soft cost of sales expense goes to the moon, not to mention the hit on sales productivity.

Unless you are absolutely certain that your sales team wants appointments with a particular set of individuals, then you really need to focus more on qualified leads, not just appointments.

LESSON LEARNED: Make sure you pick the correct intermediate metrics when paying for performance.

Are you helping  your vendors be successful?

OK, now you have learned your lesson, the hard way. You won’t do that again, right? So you negotiate a cost per lead fee structure. Before you do, you wisely work with sales to define BANT (Budget, Authority, Need and Timeline) lead criteria and structure the deal accordingly. Again, the devil is in the details. What if sales discovered, after further review, that what they really wanted was to get in to larger accounts before the prospect had finalized a budget? In those cases, maybe the deal takes longer but the win rate is higher and the deal size is higher. Happens all the time. Now you have to try to change the deal. At least for some accounts.

With leads, there is also often subjective information, open to interpretation. Is the prospect really acting with authority? Do they really have a budget? Even seasoned sales people can be mistaken about such things. In short, lead qualification is almost always nuanced, complex and evolving, as the teleprospecting operation figures out how to qualify leads precisely and the sales organization figures out what it really wants and needs. This reality often creates conflict with the vendor initially, because the fee structure negotiated is not really the right fee structure and so one side or the other loses.

Finally, if the vendor is taking all the risk, many people understandably put vendor support on the back burner. It’s human nature. In reality, teleprospecting operations fail, including those that are in-house, without proper support from marketing and sales. For example, from marketing, this operation needs lists, assets and tools, and an appropriate supply of reasonably qualified responders. From sales, the team needs training and mentoring on qualification and precise, rapid feedback on leads..

After all, the fee is fixed and the operation should run on auto-pilot. You also might not bother investing in effective demand generation that feeds the vendor or even list development, instead allowing the vendor to get by on cold-calling decaying lists.

Your program then becomes the dumping ground for new hires. The vendor might also park underperformers there before giving them their walking papers. In other words, both you and the vendor try to extract some value out of the effort. But, some of what matters isn’t getting measured, like the cost in the market place to your brand because of the quality of the calling.

LESSON LEARNED: A business relationship is a two-way street. Your vendor can’t help you be successful, if you don’t help it be successful. As Jerry Maguire said, “Help me help you!”

Is there transparency in your relationship?

So, what’s the right approach? It really depends on what you need and how clear you are about your needs. If you have a reasonably well-oiled, well-documented process and approach to teleprospecting, then asking the vendor to share in the risk and the upside can serve your mutual long-term interests.

If things are not going so well and you need to figure out the right approach, then pay-for-performance is going to create unnecessary conflict. You might be better served in that case to put your focus on determining the right model or strategy for teleprospecting and the parameters of a pilot. Insist on a level of transparency during the pilot and then use the pilot to optimize the approach. Then, after the production level has begun to plateau, start working on a shared risk model.

The right shared risk fee structures ensure that both the vendor and the client win if the program is working and lose if the program is failing. To arrive at such an arrangement, there must be clarity on both sides about mutual obligations and the consquences for non-compliance. Mutual trust and respect are also necessary, including a win-win approach to the fee structure.

To those who might argue that every dollar of profit a vendor makes is a dollar of margin that is lost to its clients, I would point to the free enterprise system. Everywhere in free markets, the quest for profits drives higher levels of efficiency (and losing money drives companies out of markets and out of business). If the vendor makes above average profits for driving above average efficiency, then its clients are the beneficiaries. And the profits that the vendor makes must always be tempered by what its competitors offer or what its clients believe they can achieve in-house.

LESSON LEARNED: A rising tide lifts all boats…as long as everyone is clear on how “tide” and “boat” are defined in the process. So, before you dive in, dip your toe in and start with a pilot that has flexibility to evolve over time. Once the proper success metrics have been discovered, and a working relationship is established, you can create a more successful payment model that truly shares risk and reward.

But don’t stop there. Look at this as an evolving fee model. Continue to optimize as you learn more about what creates a mutually successful relationship.

Related Resources

B2B Marketing: The 7 most important stages in the teleprospecting funnel

B2B Lead Generation: Why teleprospecting is a bridge between sales and marketing

B2B Marketing: The FUEL methodology outlined

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