It is clear to all of us that online marketing and social media have dramatically changed the marketing practice over the past decade. They have certainly made it a lot more measurable and accountable – much more of a science. They have also made it a lot more interactive and collaborative with the target customer.

Yet it is important to note that some of the marketing fundamentals haven’t changed. Marketing has always been and continues to be about knowing our audience so we can target them with relevant messages that will resonate. Of course the best way to resonate with our audience – really in any situation – is by listening to them before talking. So the fundamental approach to marketing hasn’t changed but how we do it, the tools we employ and how we define and measure success certainly has…

Traditional – or as it is coming to be known as “Outbound Marketing” – focuses on finding customers by building brand awareness and demand through PR, online and offline advertising as well as direct mail and email promotions. It is the company reaching out to the customer – presumably with a compelling message or offer – to entice them to buy their products and services.

Inbound Marketing is a new approach to marketing that optimizes getting found by customers. It is about attracting customers to the business…Whether through search engine optimization (SEO), paid search, social media, or relevant cross-linking, Inbound Marketing is focused on helping businesses improve website “findability” for qualified buyers. The bonus is Inbound Marketing also benefits the visitor with improved content relevancy and linked resources.

What’s important to note about outbound marketing is that it is “interrupt-driven”. What I mean by that is, just like that a TV or pop-up web ad, we interrupt whatever the customer (both B2B and B2C) may be doing with a “message from the sponsor”. Even email is interrupt driven.

So to put it simply, with Inbound Marketing, marketers “earn their way in” vs. “buy, beg or bug their way in”!
One of the biggest problems with outbound marketing – besides the interruption factor – is that it has to rise above the noise to be effective…and the amount of noise is growing exponentially. There are too many ads, too many email offers, too many websites, simply too much content out there – and of course that’s further complicated by less and less time and attention on the part of the buyer.

In an earlier post, I described Customer 2.0 as NOT wanting to be “sold to”…as being informed about products and services not from the vendor’s messaging but from peer to peer conversations. Hence interrupt driven marketing is NOT effective with Customer 2.0. They want to find the right products and services themselves. But given the increasing noise level I just described, rising above it and being “findable” isn’t easy.

The KEY to findability is relevance. It is back to those marketing fundamentals I described earlier, since relevance comes from a deeper understanding of customer behavior and sentiment…it comes from listening before shouting out our outbound marketing messages.

Perhaps not too surprisingly, Inbound Marketing comes with another bonus: unlike its program $$ heavy counterpart, it is people (that is time and effort) heavy. It is about generating the right content in the right places, building and fostering user communities for productive engagement to enable the right people – qualified prospects – to FIND us. Sounds interesting? Stay tuned for more discussion on innovative approaches and emerging best practices in a future post…

I started an earlier blog post with the observation “We market and sell in a brave new world where prospects are equipped with near x-ray vision into companies, products and people they are considering doing business with.”  This statement implies Customer 2.0 holds all the cards!  Hence, evening out the playing field requires sales to be just as knowledgeable about the buyer and bring real value to the sales process by demonstrating why their products and services can solve the customer’s unique business challenges.  Relevance emerges as the key to synchronizing the selling cycle with the buying cycle.  Armed with a 360° view of their prospect’s business that can only come from “listening to” them and engaging them through social media, sales people now have the opportunity to gain the deep insights necessary to get Customer 2.0’s attention – insights that will drive Customer 2.0 into deeper engagement with your company and delivering on the ultimate promise of Sales 2.0!

This is the first time for me attending the show. And it will no doubt be the first of many. Austin is Portland meets Texas – hip, clean, smart and technology enabled with a little barbeque sauce. SXSW takes over town attracting (perhaps) hundreds of thousands to the festival.

 I spoke at session titled “Is too Much Math Killing Marketing” and debated the point with UK Ad Agency chief Mike Teasdale who took the position that it has. Mike’s a brilliant ad guy, fast, and with biting humor so I had to be careful not to get cut up in the knife fight on stage. In Bush country, I made my points – with rhetorical shock and awe (I had to work in a Bush-ism). Actually, we’re mostly in agreement but for the sake of a good show each of us labored (or laboured as Mike would say) to support a pure position – me arguing for left brain and Mike right.

 We didn’t really have any expectations – would this group come hear our thoughts at 9:30 in the morning on the last day of the show after four long nights of SXSW parties – the other reason people seem to go, or would we speak to a big empty room?  The answer came in loud in clear, that despite the time there was a morning thirst for an answer to the question, and we gave it our all in front of a full ballroom at the Hilton.

 So here’s my summary. One of Mike’s main points is that data becomes a crutch for every decision, paralyzing the company and preventing it from making any daring design decisions. He made fun of some of Eric Petersons‘ work around measuring visitor engagement. Now, I know and love Eric (we worked together in several firms – Web Trends and WebSideStory),  however  the audience made up mostly of interactive agency types, seemed to agree with Mike that it’s too complex.  He quoted Ogilvy and Dave Trott, “it’s better to be interesting and wrong than dull and right”.

 And the battle lines were drawn –  Math, Reason, Data, Left brain; English, Instinct, Imagination, Right brain. Too much math stops us from taking giant leaps, “it takes imagination to take a leap into the future”, he said. There where hoots from the crowd supporting the position.

 I started the counter point with the question “What is the Sound of Creativity When No One Can Hear It”? And quickly counter punched that the world today has changed as the internet provides us the tools and the empirical data to optimize. I followed up with the observation that, “we’re all becoming Content Engineers”. I’ve seen this movement for some years – one part creative director and what part data analyst.  Here’s what I said back in 2005 to ZDnet about the topic. This new breed needs to monitor, measure then maximize. Check out our SXSW presentation here.

 But the bottom line to my math is this, creativity without conversion = zero. And hopefully on that point I had a KO! Regardless, the debate stirred the pot and seems to have triggered interesting tweets – #toomuchmath, and blog posts. I would be curious to hear your thoughts?

Given my marketing analytics background (or DNA as some might say ), I’ve always been focused on making marketing more accountable to and aligned with sales. My personal edict is “You Cannot Improve What You Cannot Measure”, and I practice it religiously to ensure my clients drive the most revenue possible with their marketing dollars, great or small.  What was thrilling about my pre-conference conversations with the panelists was how the Sales 2.0 movement is enabling sales organizations to adopt a similar culture of measurement, bringing in much needed accountability.  Actually according to my panel, it is moving beyond accountability – and shifting sales into a culture of predictability.  Here is how: Sales management solutions, such as forecasting, business analytics and compensation management tools, improve visibility into sales performance with objective, dynamic data.  Better visibility in turn exposes volatility at the aggregate level as well as gives us the ability to drill down to pinpoint and act on the problem areas – whether product line, geo, sales rep, lead source – resulting in overall sales performance predictability.

Think about it:

• Business Analytics improve visibility into the pipeline. With just a couple of clicks, we can see what deals are won, lost, closed, or added to your pipeline, even deals that slipped.  Better pipeline analytics help drive a better forecast and also help alignment with marketing re: driving the appropriate lead gen efforts to mitigate potential shortfalls. 
• Accurate sales forecasting, based on dynamic sales data, can build trust in the forecast for run-rate business as well as new demand, ensuring alignment with production – getting us a step closer to achieving the dual goals of improved profitability and customer sat.
• Smart compensation management can help us incent sales people to drive sales of the “right” products (and you got it, we get to define what “right” means!).  We can now adapt compensation plans to match changing market conditions to better align sales comp to business objectives.

Uncovering volatility and bringing about predictability into sales performance have far reaching benefits. It of course helps with the all important revenue numbers – but also drives organizational alignment between sales and finance, sales and marketing, sales and product management, sales and production… (yep, you get the picture) and improves trust between these often mistrusting departments.   Most importantly, it translates into customer value in the form of a more efficient and customer-centric organization. And, to quote a popular MasterCard ad, “that’s priceless!”

Next week I’ll be in Austin at the huge international music, film and interactive confab, SXSW addressing the question, Has Math Killed Marketing Creativity? I’m debating the topic with classic ad guys who think it has (at least that’s the position they take for a good show). Guess what side I’ll take? Math is key to marketing in the future. Move over finance dept, as it’s now critical to build an entire “Culture of Measurement” because we now can. I list some lowest hanging fruit below.

Analytics drive smarketing: sales and marketing alignment

We work in a “smarketing” world where the lines between sales and marketing are blurring as it’s now possible to optimize every conversion step of the lead across the company, from the initial reach campaign – to close and everything in-between. But marketing automation, web analytics, social media, and CRM tools are useless without both process and operational change. Too few ask, “What are my goals, and how will I know when I reach them”?

These new applications force marketing and sales alignment to be more deliberate. Math doesn’t do well with fuzziness. Key questions need to be addressed – what is the definition of an inquiry or lead? Is a lead different from a sales ready lead? What is the definition of an opportunity, who owns it, and how can it be optimized? Who’s responsible, marketing or sales? Maybe we need a Chief Smarketing Officer?

It’s a fact that these technologies enable sales to act marketing-like, while marketing can be held more accountable (like sales) – measured with quotas. But our process lags behind the promise enabled by these applications. There is good news, however, as early adopters are seeing dramatic ROI numbers. What should the rest do? That depends, and I have a few thoughts on this topic for future blogs.

Analytics drive product direction and user engagement

Smarketing is a start, but the product lifecycle can be optimized through analytics as well, and forward leaning companies are asking questions like – What are my users’ behavior and where do they get stumped? In a cloud environment we easily can monitor individual and aggregate behavior, and like a web site, optimize their engagement within the product using the analytic tools of our trade. We can even “campaign” to these users, using marketing automation tools and scoring to present offers at unique “up sell points” during the user session (but let’s be careful here). While this is powerful for converting prospects, the data is also key for customer retention. It’s much more effective to keep a customer than to replace them. An engaged customer is a happy customer.

Analytics drive new distribution models: Freemium & B to I

Marketing in a B to B environment is undergoing a transformation as (mostly) gone are the days of field marketing (expect for in the largest companies like Oracle) with their Vegas events and golf junkets. Behold a new era of marketing that some are calling B to I, or “Business to Individual”, marketing where B to B marketers use the tricks of their consumer marketing cousins. The Freemium distribution model is one of those, and it too is driven by analytics. We know that the Freemium model has shown great effectiveness in the B to C long tail environment, but how will it do in the B to B sector? Logmein and LinkedIn suggest the answer.

New tools are creating a transformative culture of measurement. Best practices are emerging. I hope you check back here often as we share our latest thoughts and observations.

It wasn’t too long ago where the norm was for marketing and sales teams to shout insults and pass blame on for not reaching revenue goals: “The leads are worthless!”…”No, it’s the sales reps who just cannot close!!” Fast forward a decade and the rules have changed. Marketing is now measured and compensated more like sales reps on attainment of goals; and our friends in sales are having to think more marketing-like and segment and target prospects with the right messages at the right time to increase conversions. Welcome to the world of sales and marketing 2.0 or “Smarketing”!

The 2.0 approach requires the art of selling and marketing (a.k.a. creativity) to be augmented with a healthy dose of science (a.k.a. repeatability) to achieve the massive productivity gains required. While there are several factors that contribute to realizing these efficiencies, I believe there a few that are paramount to increasing accountability, reducing customer acquisition costs, and ultimately driving revenue.

Here are the four essential steps to grabbing the Sales and Marketing 2.0 brass ring:

• Align sales and marketing organizations around jointly-defined processes, definitions and success metrics. Establish a “system of record” – whether it is your CRM or your marketing automation system or both if they are synched – to ensure you are capturing all customer engagements in one place. And make sure to agree on the definition of sales stages to ensure your lead scoring process is consistent and gives you the necessary data to measure the effectiveness of each of your programs.
• Target the right audience with the right message at the right time. The days of one-to-many mass emails are gone. Launch targeted one-to-few campaigns by segmenting your prospect database. Watch for trigger events in the industries or geographies you are targeting to reach out to prospects with information that’s relevant to their current initiatives and urgent business challenges. Use behavioral targeting based on how your prospect is engaging with your website or your “free trial”.
• If lead scores indicate prospects are not quite sales-ready, nurture them! Educating prospects with whitepapers, tips and tricks emails or educational webinars are great ways to nudge them along the sales cycle (and effectively reduce your cost per lead!).
• And… don’t underestimate the power of continually testing and measuring the effectiveness of your sales and marketing efforts. Is your website attracting and converting the right prospects? Which programs have the highest percentage of converting into sales-ready leads? How do changes in message or design translate into improvements in conversion rates? Remember, you cannot improve what you cannot measure!

Want to find out what we think on next gen demand generation strategies or dig deeper into how you can implement some of these recommendations? Then follow us on our new blog Smarketer. We hope you will join the conversation – and share your own experiences as well!