Creating Market Pull

Posted on May 26, 2016September 6, 2016 by Jerry Vieira

“Market Pull results in higher marketing and sales ROI than Market Push and makes everyone’s life a lot easier. Ask B2B business owners which they would prefer, and you’re unlikely to find anyone that wouldn’t prefer to have customers lined up at the door asking to buy their products than having to coax them out of the brush to engage.”

Market Push

Market Push is exactly what it sounds like – aggressively pushing and promoting of your product to any and all that will listen. After all, customers can’t buy your products if they don’t know they exist. So, marketing must become obsessed with “getting your name out there”.

Right?

Well, not really. That obsession makes Market Push programs expensive and many times ineffective.

An all-out “get-our-name-out-there” initiative can lead a B2B marketing team to commit a lot of cash, time and energy to a scattered range of unfocused activities: a new branding program, a revamped website, new logo and newly-minted tag line, a blitzkrieg of trade shows, radio ads, an SEO initiative, a blast of pop-up on-line advertising or an aggressive social media program.

Source: Douglas Wray on Instagram, via Daring Fireball

I have seen firms spend in excess of 7 figures on Market Push programs with virtually no measurable results.

It’s a fall back, non-strategic shotgun approach. And, even if it works a bit, it typically generates a widely diverse range of customers. The consequences are that the firm doesn’t know where to focus next. They will likely be pulled in many directions by different special interests within this new, wide customer base. They cannot decide how to evolve their product offering road-map or what specific message to promote to whom. Debate can get heated. Spread too thin, they can become vulnerable to more focused competitive initiatives.

There is a much better way.

Create Market Pull

Now, contrast Market Push with the phenomenon of Market Pull.

After initially trying and failing with a Market Push program, a B2B client shifted to a focused Market Pull program and grew their customer base by three orders of magnitude in just under three years. The initial impact of the switch was seen in less than 120 days. Another customer hit two orders of magnitude in six years.

The question is this: How does one create market pull of these magnitudes? The compound answer may seem counter-intuitive, at first look.

It’s: Focus and Leverage

Market Focus: Tapping into the Natural Leverage of the Market Ecosystem

Each target market is a community. Each community has a natural architecture. We call this target market architecture the Target Market Ecosystem or TME. While all TME architectures are virtually the same in basic structure, (see below), each is unique in what’s inside the nodes.

Creating market pull is about building a reputation for delivering outstanding value to Economic Decision Makers in a specific target market ecosystem, then fanning the flames of the communication of that value proposition between peers, referral sources and through the other network nodes.

Within any TME, the ultimate goal is reaching Economic Decision Makers with your compelling value proposition.

For economically impactful purchases in the B2B world, Economic Decision Makers commonly look to knowledgeable, experienced people they trust within the market ecosystem for advice and recommendations. Filling those advisor roles are peers, technical specialists, lawyers, accountants, consultants and Board Members. We classify this group of advisors as Key Referral Sources.

Within that same TME community, there are also Opinion Leaders – those few knowledgeable folks who seem to always be at the front edge of new ideas. They might not hold a direct, open communication line to the Economic Decision Maker, nonetheless, they typically have significant indirect influence on them through their Key Referral Sources.

The most impactful Opinion Leaders are characterized by four traits.

They are Fanatic Believers in your value proposition
They are Well-Networked within the target market ecosystem
They have High Credibility with Key Referral Sources and Economic Decision Makers
They are Natural Sales People, anxious to communicate what they know and believe, to all willing to listen.

Also within this community infrastructure are a couple of non-people nodes – Venues and Vehicles. Venues are the real and virtual places where people in this ecosystem meet and dialogue: society meetings, trade shows, on-line groups, peer-groups, conferences, industry events and seminars.

Vehicles are the means through which people discover new information: webinars, blogs, podcasts, talks, videos, articles, industry journals and whitepapers.

The arrows in the ecosystem diagram, represent the directions of influence of each node.

It’s A Universal Dynamic

The social influence dynamics of a target market ecosystem are at work for everything bought by anyone. Its ubiquitous existence was clearly demonstrated in social research compiled by Professor Everett M. Rogers in his book “The Diffusion of Innovations” (Free Press, 1995). From community adoption of health practices in villages in the Andes, to the fan-out of new techniques for educating children in math in Pittsburg, to the adoption of high-tech products, the TME is the engine that drives adoption.

It’s Underlying Structure is Ubiquitous

The market ecosystem architecture for Hospitals is the same structure as that for Fire Departments – and every other industry. Yet, each individual TME is, for the most part, self-contained. Within it swirls the internal dynamics of market-specific issues, market-specific peer-to-peer communications, influencers, opinion leaders, venues, and industry journals spouting their own unique industry lexicon.

This insular characteristic means the Director of a Hospital, is not likely to hang out with, or seek the advice of, the Chief of the Boston Fire Department regarding how to select computer monitors for their delivery rooms. She will most likely, ask a peer at another hospital or a hospital IT specialist first.

Leverage: Kick-Starting Your Value Proposition Communication Multiplier (VPCM)

Your VPCM is the fuel that powers growth in a TME.

Social science research shows that “node-based”, intra-community communications is 13 times more effective than mass media in getting a value proposition message to go viral within a TME.

Having one of your happiest customers communicate the exceptional value delivered by your approach to solving their problem in a venue talk to 25 or more of her peers is an example of your Value Proposition Communication Multiplier (VPCM) in action.

The VPCM is most powerful within an ecosystem and, occasionally can even jump from one ecosystem to another. It drives market pull and sells for you when you are not in the room.

Opinion Leaders are important communication and influence nodes. One Opinion Leader can influence dozens, or even hundreds of Economic Buyers or Referral Sources in a specific TME.

Key Referral Sources are influence and communication nodes for your VPCM.

Venues and Vehicles are also VPCM communication and influence nodes.

“Strategically injecting an ecosystem-validated value proposition message at the right communication nodes is the key to creating market pull.”

What You Can Do Immediately

Here are three actions to create market pull in your corner of B2B world.

1. Focus

Select a target market where your value proposition has been validated to deliver higher economic value to customers than any other segment. Be sure the market has some economic momentum, lots of customers with a common problem your offering fixes and a well-established, easily identifiable TME.

2. Map that Market’s Ecosystem

Identify the Economic Decision Makers by title, Key Referral Sources by the same, Opinion Leaders, Venues and Vehicles.

3. Target your value proposition story at communication nodes within the TME

Build your story and marketing plan around your proven, delivered value proposition in that specific sector. Then proceed to place that message through blogs, articles, talks, referrals and presentations at the Nodes of the TME to get the natural lift that each TME offers.

Don’t get antsy. If you do it right, and your value proposition is real, then you should begin to see results in no more than 160 days. If you don’t see results something is amiss – and whatever it is, it’s not anything that could be fixed with an expensive Market Push Program.

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Jerry Vieira, CMC is the President & Founder of Jerry@qmpassociates.com. Read more about Jerry on LinkedIn and follow him on Twitter at @JerryatQMP

6 Targets for Applying Lean in Marketing & Sales

Posted on April 13, 2015June 21, 2018 by Jerry Vieira

Boosting Customer Received Value Through Lean

In our previous blog post, “3 Guiding Principles for the Application of Lean in Marketing & Sales”, we offered a trio of overriding Lean commandments. In this post, we point to specific Marketing & Sales targets for Lean that will simultaneously increase customer received value and marketing and sales ROI.

Target #1: Lean Applied to Market Focus

Face the facts. Your product or service offerings do not deliver the same economic, emotional, political or physical value to all market segments equally. Lean means focusing your products on market segments where the total value received by customers is its highest. If that situation exists, the Law of Economic Value is satisfied.

The Law of Economic Value states:

“All economic value accruing to your firm has as its source, the customer’s perception that they will receive more economic, emotional, political or physical value from your product or service, than it costs them economically, emotionally, politically or physically to acquire and use.” ©

Research shows that the following benefits accrue to a firm if the Law of Economic Value is fulfilled:

the ability to garner price premiums
faster market penetration
higher customer satisfaction
more market peer-to-peer customer communication of that value proposition
higher interest in your product from channel partners
higher probability of achieving market share leadership in that segment
reduced marketing and sales expense
improved sales win rate and faster time to close
reduced product design costs and a clearer product evolution path
greater returns from focused on line marketing investments

Market Focus is Lean in Action.

Target #2: Lean Applied to Product Requirements

Feature creep is the antithesis of Lean. It can be particularly nefarious in high tech firms where brilliant and creative engineers, encouraged and abetted by marketing and sales folks, attempt to stuff all the capabilities they can into a product to make sales as easy as possible.

The truth is, feature-stuffing typically causes delays in new product launches, ingrains price and profitability pressures in the product and results in a general market positioning of “everything to everyone in just one package”. Everything-to-everyone products inevitably lose market share to focused, niche offerings.

Focused Product Requirements are Lean in Action.

Target #3: Lean Applied to Marketing Communications

The wisdom of Lean and focused market communications is the toughest principle to convey to marketing and sales teams. The common fallacy is that, “more marketing expenditure is better than less”. Marketing and sales teams typically will fight tooth and nail to avoid reductions in this sacred budget arena. They believe that more marketing dollars across more expansive markets means more customers. Not so.

Research shows that communications of a new idea is best accomplished through peer-to-peer opinion leaders in a specific target market. That research revealed that peer-to-peer communication is 13 times more effectively than mass communication. Focused marketing communications programs that reach those opinion leaders, supported by value propositions achieved through market-focused product design, is the most economically productive combination that can be achieved.

Focused marketing communications is Lean in action.

Target #4: Lean Applied to Channel to Market

Your market share will eventually erode if your channel-to-market provides value only to you and not your customers. Marketers must be vigilant to assure their channel delivers meaningful and relevant value to customers and clients first.

Marketers must also recognize that the customer value the channel must deliver changes with the maturity of the industry. In a fledgling market the channel may be required to supply training, installation, configuration and integration services. In a mature market, those expensive services must be replaced by the channel’s ability to quickly deliver spare parts or service.

Evolving Channel Value Delivered is Lean in Action

Target # 5: Lean Applied to the Sales Process

An oft-cited statistic claims that 30% to 50% of the opportunities in the average sales person’s pipeline won’t close because the customer makes a decision to notbuy anything. The sales person has, in effect, wasted time and money pursuing something that was destined to never result in a sale.

We suggest a set of 5 criteria that can improve a sales person’s ability to qualify an opportunity and save time.

The intensity of the customer’s need or problem,
The degree to which the customer believes your product can meet that need,
The degree of the economic, emotional, political or physical value the customer will receive by buying the product or service,
The customer’s perception of your product’s relative competitive advantages ,
The existence of a customer champion for your solution

Good Sales Qualification Discipline is Lean in Action.

Target #6: Lean Applied to Market Intelligence Feedback

Sound strategy cannot be developed without current and accurate market intelligence. Rapid response to market intelligence feedback is critical to business success. That intelligence may comprise some or all: competitive moves, customer satisfaction, barriers the sales people keep running into, the health of the customers’ markets, usage idiosyncrasies and a host of other informational tidbits. The sales team must be at the forefront of gathering this market intelligence. The sales team is the one company asset that is in the most frequent communication with customers.

Here are some thoughts about making your market intelligence gathering Lean:

Create a market intelligence section as part of your sales person’s weekly or monthly sales report or presentations
Train your sales people how to question, listen and observe when they are in front of a customer – not just spew the benefits of your product
include providing market intelligence in the sales compensation plan and sales position descriptions
provide the ability to award spot bonuses for the most timely and important pieces of information that come your way
read the market intelligence reports; think about and acknowledge them by calling back the sales person who provided the information, thanking them and getting more information
Understand what pricing pressure means. Pricing is typically a symptom of a bigger strategic problem, centered on customer-perceived value. Make your actions value-delivery related, not pricing related.

Rapid Collection and Response to Market Intelligence is Lean in Action

Conclusion:

The application of Lean principles to marketing and sales requires no major cash investment. In fact it saves cash. A firm of any size and market can deploy Lean in marketing & sales and begin to reap the economic rewards quickly.

Lean principles assure that customers receive the best value possible – and in return, consistent with the law of economic value, your business optimizes its own economic performance.

*****

For more information on the application of Lean principles to Marketing & Sales, call Jerry Vieira, CMC at 03.318.2696 or visit the QMP Group website atwww.TheQMPGroup.com

5 Steps to Assuring the Success of Your Branding Program

Posted on August 21, 2014June 21, 2018 by Jerry Vieira

A Good Brand: Cause or Effect?

Perhaps it’s a result of living in the Northwest for the last 20 years that I am periodically afflicted by the “salmon complex” – the uncontrollable impulse to swim against the current, despite obstacles. And so it is, I find myself in such a stream with regard to the growing pandemonium toward B2B branding programs. It’s not that I don’t believe that “Brand” has value, in fact, just the opposite. Brand has enormous value. It’s just that brand power is the effect, not the cause of B2B market success – and the strategic research proves it.

I have had the opportunity to observe a wide range of branding initiatives at B2B companies. At opposite ends of the spectrum, two come to mind. The first was a simple logo redesign for a small private company. The other, a million-dollar comprehensive branding initiative for a mid-market public firm. Neither initiative seemed to have any visible impact on the firm’s earnings.

After those initiatives had been in place a while, I asked the executives of each company whether they thought their branding program was a success. The answer, in each case, was an unequivocal “No”.

Not too long ago I gave a talk on market strategy to MBA students at a prestigious local university. At the end of the talk, one of the students approached me and expressed amazement and disbelief. How could I possibly give a detailed talk on market strategy without mentioning the importance of branding? He was agitated and animated, his arms waving about as he skittered around in front of me, like a drop of water on a hot skillet. It was as if I had missed stating the importance of water to agriculture.

So, why all the hysteria and stampede around branding?

Even though branding programs often fail to move the needle – their popularity remains ubiquitous. There are a number of reasons for this:

It feels good: A new brand. A refreshed tag line. A fantastic logo. A clean, well-constructed website. Looking at these products of a branding program makes you feel good. Customers can quickly see the highly visible outcomes. Executives smile at the wondrous accomplishment, reinforced by the adulation of their peers telling them how snappy it all looks.

The majority of the creative energy needed can be subcontracted to, and accomplished by, outside folks – minimally increasing anyone’s internal workload

Marketing and sales teams are hounding their management to spend money on branding

Branding gives the marketing team something concrete to focus their energy on – something on which to build a whole marketing communications program

Websites need to be constantly refreshed anyway – and a rebranding typically does that in a big way

There’s little downside risk, except for the money spent

Everybody’s doing it, and

Everybody’s selling it

Now, please don’t get me wrong. I sincerely appreciate the value of a good brand image in attracting customers – but a brand (the image, interpretation and meaning of your name, tag line and logo) is an effect not a cause, of success. What impact would the Apple logo have if Steve Jobs hadn’t first amazed the world with a steady stream of mind-blowing, innovative products?

What your company and its products and services mean to their target markets, i.e. the customer experience surrounding your value proposition, must have already been delivered and validated in the marketplace before a brand can be meaningfully established.

Strategic Marketing Research and RPQL

The voluminous PIMS* database and research from the Strategic Planning Institute, conclude that the customer’s perception of a product’s quality relative to its competitors, is the prime driver of financial success. This is called RPQL – Relative Perceived Quality Leadership. The research concludes that financial success is the outcome of achieving RPQL – and brand power is also a result of RPQL – not the other way around.

Quality means more than just “it won’t break”. It means that the product or service experience meets customer expectations – consistently delivering on its promises. And, delivering a relative perceived quality leadership experience takes consistent organizational rigor and discipline. No matter the logo! The customer must experience RPQL first hand, and then the synaptic connection can be made to the brand name and logo.

Achieving the Branding Impact You Intend: 5 Steps

Develop, deliver and confirm a meaningful value proposition experience first:

The Law of Value Exchange states, “The source of all economic value in your company originates from a customer’s willingness to exchange their cash for what, in their perception, delivers greater economic, physical, emotional or political value in return.”

Assure that your value proposition targets a market with substantial momentum and potential:

The world’s best boat, sporting the flashiest logo and most clever tag line goes nowhere in a river that is devoid of water. And remember, a brand has different meanings to different markets. Focus your investment and energy developing a meaningful RPQL experience in a meaningful growth market.

Don’t muddle corporate and product branding:

Smaller companies with petite marketing budgets often try to create one brand for the whole firm. But they may be serving multiple market segments with different products delivering different value propositions. In such a situation, it might better to focus branding budgets on specific products, vis-à-vis branding the whole firm. For example, the GM (General Motors) brand has been badly damaged recently by a torrent of recalls, however one brand RPQL experience (Corvette) remains solid.

Understand what your firm means to your best customers:

I asked new and returning clients why they buy from QMP. I was surprised; it really wasn’t what I thought. When I repeatedly heard the same reply, I immediately changed the corporate logo to reflect that perceived value and experience. Here is the QMP logo.

Yup. Our clients told us they engage with QMP because they gain invaluable insight because we challenge them to think.

Align your brand:

Alignment does not mean just marketing materials, fonts and messaging. It means your whole damned company. From employee recruiting, to training, to product design, values, culture and customer service. All components must be aligned to reinforce the customer RPQL experience – which is your brand. When you invest in that kind of brand discipline, your brand promise will be delivered.

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*PIMS stands for the Profit Impact of Market Strategy, a data base initiated by GE in the 1960’s to study the connection between strategy and profit. It is now maintained by the Strategic Planning Institute. It has tracked more than 500 key metrics of thousands of companies since the 60’s.

For more information on branding success contact Jerry Vieira at The QMP Group 503.318.2696 or Jerry@qmpassociates.com