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The Key to Differentiation: Be Bold, Be Different
Sunday, while watching The Washington Redskins (finally) win, I saw an interesting ad from Chevy. I have to admit that it tugged at my heartstrings a bit.
It told the story of a family who tracked down their father/grandfathers original 1965 Chevy Impala SS. The emotional message was, “More than a car…a Chevy.”
I’m not sure how effective the ad will be in selling more cars, but I certainly hope its effective with the management and senior leadership of GM, and other companies. See, the thing that created an emotional bond between Dad and his Impala, is that, like it or not, the Impala was not a boring car. The Impala had character.
GM’s problem today (and for most of the last 20+ years) is that their cars are boring, me-too vehicles. With the possible exception of the Corvette (which has stayed strong), there’s nothing interesting about a Chevy. With all due respect, what the heck is a Chevy Malibu? Don’t get me wrong, the Malibu is not a bad car (I drove one recently when traveling), there’s just nothing special about it. It’s like every other car I’ve driven.
If GM, or you, want to be more than just your product or service – a worthy goal – then take a risk. Stop differentiating and do something different. It’s not a guarantee for success, but I promise its a great first step.
Marketing Defense vs. Attack
There is a tremendous difference in strategies, tactics and the overall approach used by companies defending a market position versus those that are attacking a market.
Very few small and mid-market (SME) companies are in a position to defend a market position. Yet, I constantly see SME’s implement sales and marketing programs designed to defend, when they need to be attacking.
Inherently, the underlying position for a firm defending a market is safety – they’re the safe choice. Think about IBM in its heyday. The battle cry was, “No one ever got fired buying from IBM.” This is the default position for large firms. While they make a bunch of promises, firms like GE Finance, Pacific Life, Wells Fargo, UPS, etc. all promise that if you hire them you won’t look stupid.
When you’re defending a market position popular marketing terms like brand, awareness and top of mind are key. This is large companies advertise during football games. By simply being there, they reaffirming their position. This is true of most traditional marketing approaches.
Implementing “defense tactics” when you are not in a position to defend, not only fails to drive growth, it puts additional pressure on price and margins. Small and mid-maket B2B companies must use attack strategies. Their message must provoke the customer to become aware of issues they’re not currently paying attention to. It must demonstrate that the cost of the problem is far greater than the risk and effort required to solve the problem, and that the status quo is no longer viable. It must open the customer up to take new approaches.
Here are three key attributes about this type of marketing that are far different from traditional marketing:
- The message is about the problem and is anchored in the customers world. At ABC Company we do this, that and the other thing is out.
- The message shares knowledge rather than protects it. Read your next ad, your next marketing piece or prospect letter and ask yourself, if you were the reader, how would you be better off for just having viewed it. If the prospect needs to contact you to gain any real value, it’s not going to work.
- It must be consistent. One message, one email, one paper doesn’t cut it. The effort builds over time.
In my experience, applying these three rules will get you well on your way to growing your markets and expanding your margins. If you have any other rules that work – I’d love to know about them.
Why Marketing Doesn’t Work
John Wanamaker famously said, “I know half the money I spend on advertising is wasted, but I can never find out which half.” If you’re involved in a small or mid-market B2B company, you probably wish you were only wasting half of your marketing money.
One of the largest vulnerabilities of small and mid-market (SMB) companies is that they under-invest (in a BIG way) in marketing. It’s not unusual to find companies doing hundreds of millions of dollars in revenue that have virtually no marketing function whatsoever.
How can this be?
The answer is quite simple – marketing, at least how it’s primarily taught and implemented – DOESN’T WORK!
The fundamental problem with 95%+ of SMB marketing efforts is that the marketing effort is disconnected from the sales process.
There are only two reasons that a company should market:
- Get more business
- Keep the business they have
That’s it!
You don’t market to create awareness, you don’t market to create thought leadership, you don’t market to make yourself feel good. The only reason you should spend a dollar on marketing is because it causes revenue to increase.
Awareness only matters if that awareness moves one down the (new) marketing funnel, towards becoming a customer. Thought leadership only matters if it moves a customer to action.
And the reality is that most marketing activities don’t move people to action and are completely disconnected from “creating customers.”
The reason for this is simple. Virtually everything espoused from (so-called) marketing experts is merely a rehash of consumer-product marketing, weakly translated for SMB B2B companies. I’ve got news for everyone, what works for Proctor and Gamble, Coca-Cola and McDonalds DOES NOT WORK for the $5 – $500 million B2B company, and it sure as hell doesn’t work for companies smaller than that.
Terms like “top of mind awareness,” “wallet-share,” “brand image,” etc. matter when you are competing to influence a decision that is made in less than 3 seconds, in the aisle of a grocery store where your competitor’s products are sitting right next to yours. When you’re competing in markets of millions of customers the game is different.
The B2B sale is a completely different beast. With B2B the sale can take years (even if your “sales cycle” is months). There are multiple people involved in buying, and they all have competing priorities, values and interests. The investment you are asking them to make is magnitude’s larger, and the risk is huge! Whenever change is involved buying, the entire decision process is skewed.
In B2B, marketing’s job is to cultivate. It must soften the market, helping them understand the value proposition you bring to the table. It must provoke and educate, focusing on the problem rather than the solution. It must be a process that is fully, completely and totally integrated into sales process. Failure to do so puts your entire customer creation efforts in peril.
Can You Hire Salespeople?
Have you ever noticed that conversation topics tend to occur in bunches? This week the conversation of choice seems to be can small and mid-market business hire salespeople successfully? I met with the CEO of a great services business and he’s clearly in the camp of you can’t.
His story is not unique. He’s been the primary salesperson for his company from its inception. He’s tried hiring salespeople in the past. It never worked out. He’s come to believe that you just can’t hire salespeople successfully.
Many statistics and studies would support my new friend. Just recently I shared a devastating study on the effectiveness of salespeople that was conducted by The Harvard Business Review. Recruiters that I talk with tell me that the mis-hire rate for salespeople for small and mid-market companies is 75 – 85%! One of the best all purpose recruiters I know won’t even engage in a sales search.
But, I’ve got to tell you I just don’t buy it. I think small and mid-market business can successfully hire salespeople. They just need to understand what it is they are hiring. There are two fundamental mistakes small and mid-market companies make when hiring/building a sales effort.
- They treat the “salesperson issue” as a people problem, when it is, in fact, a system problem. You must fix the system first.
- They view “sales” and “selling” through singular definition when it actually means very different things. As the chart below shows, there are four distinct roles in selling.
Each role requires different strengths, different focus, different measurements. The priorities for each role are different, and oftentimes conflict. There is simply no way you can find someone to effectively fill all four roles. When they try, they just end up treading water and wasting company resources.
If you’re thinking about hiring a salesperson, take a moment and define which role you are really hiring – then focus on filling that role and build the others later.
Have you solved the sales hiring challenge? What do you do?
Branding Is Crap!
There, I finally said it. Branding is crap! Sure, it might be fine, even important, if you’re Coca-Cola, Starbucks, Proctor and Gamble, etc. While I’m at it, the whole idea of Top of Mind Awareness (TOPA) is crap too! Maybe if your competing for the 2 second purchase decision of what laundry detergent you’re going to use then all that stuff matters. But – and this is a big but – if you’re a small or mid-market company selling products or services to other businesses (large or small) stop worrying about your (Capital B) Brand or top of mind – trust me, your customers and prospects have far, far more important things on their minds than thinking about your company.
A great brand is a result of being relevant, important and delighting people. It’s not a logo, an icon or an exercise. As I’ve said hundreds of times – your brand is what others say you are, not what you say.
I’m writing this post because it’s making me sick seeing how much money small and mid-market B2B/B2G companies are spending on useless “branding” exercises.
I’m working with a potential client who currently has 20 clients that his company works with. Success for him is adding 2 – 4 solid clients/year. He just spent more than $20,000 to “assess the market and his brand.” Here’s the problem – HE DOESN’T HAVE A “BRAND”! And that’s okay.
He’d be far better off taking the $20,000 and investing it in building an effective marketing asset; and so would every other B2B company.
The problem I have with branding is that it puts the focus in the wrong place – twice.
- First, it places the focus internally on you, rather than your customer. Great companies look outside, not inside.
- Second, and worse, it looks at the world as it is, rather than as it could be. As a marketer, I’m not particularly interested in what customers think today. I’m interested what you want them to think, and the actions you can take to increase the probability that they’ll think that. And you can’t ask customers what they want – as Steve Jobs says, “It’s impossible to ask people what they want, when what they want is around the corner.”
It’s your job to figure out what they want – and then to focus maniacally on making that happen. If you do that, you won’t have to worry about your brand – you’ll have too many people wanting to work with you to have the time.
It’s Not A Salespeople Problem
With increased frequency I’m getting requests from owners, CEOs and VP’s asking for recommendations for a recruiter who can “find ‘good’ salespeople.”
What’s unfortunate about these requests is that even if these companies do find good salespeople (a difficult task in and of itself) there’s still only about a 10% chance that the salesperson will be successful. A study reported in Harvard Business Review revealed that only 1 in 250 salespeople actually exceed their targets.
It does not take a genius to realize that a 99.6% failure rate is not a people problem. It’s a system problem.
The traditional selling system is broken.
There are two fundamental problems with traditional selling.
- First, as I have written extensively, traditional selling is solutions focused and commoditizes the selling organization.
- Second, traditional selling (as it is implemented in 95% of small and mid-market B2B companies) puts way, way, way too much of the client acquisition burden on the salesperson. In today’s complex, fast-paced, ultra-competitive world there is simply too much pressure on the capabilities of an individual to succeed. As a result, the rate of commoditization, and failure, increases.
Great salespeople, and great selling organizations, are the result of excellent systems. IBM created the greatest selling force of all-time, not by hiring great salespeople, but by plugging normal people into a superior system.
There are four parts to every effective selling system:
- Solid positioning. A successful sale begins long before a salesperson arrives – it begins with effective positioning. Do you have a clear, powerful message? Is your value proposition understood, and valued? Are you clear on who your core customers are? Is your pricing strategy clear?
- Outreach. Great selling organizations are very focused in their go-to-market approach, while average ones are tactically opportunistic. Are you earning and capturing the attention and awareness of your best few markets? Do your salespeople know precisely who to focus on and what the resonating issues are? Does your marketing efforts clearly support your sales efforts?
- Cultivation. The buying process is far, far longer than the selling process, beginning even before the potential customer knows that they are looking to buy anything. It is triggered when the customer starts to investigate their issues and uncover their problems. This is where the fundamental flaw of traditional selling rests – and 95% of small and mid-market B2B companies completely skip this step. If you’re not optimizing this step of the system, your results could be negatively impact by as much as 75%. Are you regularly creating content that educates your customers and causes the sale?
- The Sales Process. The fourth – and final – part of an effective selling system is the sales process. An effective sales process ensures consistency, repeatability and effectiveness. It unleashes the power and capability of good salespeople, making them great. And it makes great salespeople stars.
To win in the competitive world that we find ourselves, you can no longer rely on hiring good people alone. You must match good people with effective systems.
Build It…They Will Come
The 1989 movie Field of Dreams is, in fact, the daydream of every marketer. The line made famous in the movie, “If you build it, he will come,” embodies the desire of every marketing organization since the beginning of time.
Of course, marketing has never been that easy. John Wannamaker, a famous retailer, said, “I know I’m wasting 50% of my marketing budget, my problem is that I don’t know which 50%.” My own experience indicates that not only are most companies wasting 50% of their budgets, but also the 50% that is not wasted is only getting about ½ of the results it should be.
The fact of the matter is that marketing – traditional marketing, at least – is broken. Just like traditional selling, it is built on an ineffective, highly inefficient foundation. This means that improving your marketing efforts isn’t going to do you any good. Quite the contrary, merely throwing more to this inefficient system is going to further thrust your company into the black hole of The Commoditization Trap.
There are two critical flaws with traditional marketing:
- It is a broadcasting mechanism, and
- It only communicates value and typically fails to create any.
Broadcasting
It’s trite and it’s true. When there were only three channels and virtually no other way to communicate, broadcasting worked. Today, broadcasting is highly ineffective.
Picture yourself in Times Square in New York City. How difficult would it be to get the attention of people there? How loud would you have to yell? It would be virtually impossible (before you protest, the Naked Cowboy is the exception that proves my point).
You need to understand that today we all compete in Times Square. Here are some scary statistics for you:
- The typical person is exposed to 3,000 commercial messages a day, yet the human brain is incapable of processing more than 100 per day.
- In the last 5 years, the number of pages indexed by Google has expanded by more 360 times.
- In 1986, America had more high schools than shopping centers. Today shopping centers outnumber high schools by two to one. Plus the stores are three times denser than in 1986 – and that doesn’t even account for “online shopping centers.”
This means that there are a lot of people shouting and if all you’re doing is broadcasting (shouting) with a static website, advertising, direct mail or whatever, the likelihood of getting through and driving real results is highly unlikely. Whatever results you do create will be swept away by the costs of getting and maintaining your presence.
Value Communication
Before the age of the Internet, people relied on traditional advertising and marketing as a means to know what was going on, what was available and how much stuff cost. Today, people are building bigger barricades to keep advertisers and broadcasters out.
With all of the noise in the world today, the only effective approach to marketing now is to earn people’s attention. And, in case you didn’t know this, your customers and prospects don’t really care about you, your products, or even your goings on.
What they care about is themselves. They care about their lives and they’re constantly looking for ways to make it better. Contribute to that – before they have to buy from you or even give you their name – and they’ll give you their attention.
The Good News
The marketing tools available to businesses today make it relatively easy to overcome the barriers of traditional marketing and to transform your broadcasting approach into a finely tuned, pull marketing system. Today, if you follow the new rules: if you build it – they will come.
Even better, where traditional marketing approaches favored large, high capitalized business, today size is at worst a neutral factor; and in my experience the new world of marketing plays to the strengths of small and mid-market companies willing to work at it.
There are three simple rules you must follow:
- Create value by providing useful information and knowledge that will help your customers and prospects.
- Give it away and give up control. That’s right – give it away. Don’t ask for money, don’t ask for commitment, and don’t even ask for an email address. First give, then over time you will receive.
- Consistently engage. This is not an overnight success strategy; you must “be there.”
If you follow these three simple rules, you’ll be able to build an enormously valuable marketing asset and you’ll be able to eliminate marketing expenses.
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Resources
Doug's Washington Business Journal Columns- Intelligent Growth Articles
Third Wave Selling Blog
Products to Grow
