Know the Customer Before Business Planning

Previously, I have referenced the column from Inc.com on “Herding Gazelles,” written by Karl Stark & Bill Stewart. These guys have a consultancy that works with businesses on strategy as it relates to attracting investment. Their contributions to Inc are well thought out and I enjoyed this morning’s edition:

We have been working with an early-stage enterprise tech company to help them get their product to market. We recently gathered to watch their first customer installation. They were naively fearless–they knew things would go wrong, but they didn’t know what or how severe the problems would be.

No one, however, expected the install to go as badly as it did. If there was a feature that could be broken, it was. If there was a process that could be challenged by the new technology, it was. If there was a remote possibility that some network setting would cause chaos, it did.

All the testing they did in advance didn’t prepare them for “real” users. The tech team was at first horrified by the volume and severity of the challenges they experienced. But then something amazing happened. They showed us exactly why we are excited about their potential.

They took a deep breath, stopped trying to gloss over the challenges, and instead embraced their flaws. They encouraged users to try to break things. They feverishly took notes as they learned what they needed to do better.Customer insight wordle

The customer wasn’t scared off by the bugs because our client had prepared them for possible issues. The team was honest about where the problems were, but more importantly, they showed the customer their resolve to learn everything that they could to develop a great product. The customer’s attitude actually shifted from tolerance to excitement as they realized the system was going to be refined beyond just fixing flaws and that they were going to be a part of designing a system that they would love to use.

The tech company accepted that they didn’t know it all and eagerly solicited feedback from the customer. The experience gave them the best free product development input they could ever expect.

We thought to our own client experiences, and the experiences our other clients have with their customers. If we can all listen to customers as openly as this tech start-up did, we will not only build great products and services, but we will forge the sort of lasting relationships that most companies seek.

When developing new products and services, it’s good to trust your intuition and your internal expertise–to a point. But when an opportunity to learn from a real live customer presents itself, you need to be all ears. You can’t possibly know it all if you don’t recognize the wisdom of others.

What is recommended here echoes what I am sharing with entrepreneurs on a recurring basis: until you fully understand the needs of your (target) customer, you are fooling yourself as to the viability of your business model. Taking the time to first identify target market segments, then messaging appropriate to each, followed by testing your proof of concept in an effort to revise your offerings is Business 101.

We are passionate about the need to understand how your target buyer thinks, what is important to them, and how you can produce something that they perceive as highly valuable. Asking is a great start! Slowing down from product or service development, let alone ongoing business operations, and asking yourself tough questions requires discipline and commitment. Kudos to those who are strategic enough to realize the potential compound payback on the investment!

 

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Private Company M&A Lacking Objectivity

One of the area of my consulting practice that is most enjoyable is advising clients on merger and acquisition issues. While very few of my clients actually do a deal, more and more are considering inorganic growth as a means to address both the economies of scale that come from combining back office solutions as well as what are perceived as historic opportunities to perform “roll-ups” in a variety of vertical niches. Understand that my clientele is exclusively privately held businesses whose annual revenues are under $50 million. In fact, in the $1 – $50 million range, they are usually on the lower end when we start working together. 

When I have the opportunity to become involved in a strategy conversation about the potential benefits of a transaction, then, it is not with multinational, public companies who are measuring cross border opportunities as a defensive mechanism to preserve market share against more aggressive competition. These facts notwithstanding, I enjoy reading research performed on the larger company front because many of the issues studied trickle down into my part of the market. This past fall, the global law firm Eversheds published a study, The M&A Blueprint: Inception to Integration, wherein the authors claim that deal teams need a more holistic approach and stronger connections between the planning, completion and post-deal integration phases. Amen!

The universe of participants in the study included 400+ large businesses who had pursued cross-border deals in the period 2009-2012. Many respondents felt that the inability to envision the end from the beginning (think through integration and beyond during due diligence) was the single greatest cause of unrealized potential. 

Robin Johnson, M&A partner at Eversheds, said: (bolding of phrases added)

The current economic climate has made the business of doing deals much tougher, with the research highlighting an acute awareness of risk in the process…Our research shows that the overriding factor contributing to the success of a cross-border deal, is the presence of a core team providing the ‘connective tissue’ to link all the phases together, taking the deal from the inception stage through to post-completion integration. Businesses need to start joining the dots between the different stages of the deal cycle to move the focus from just simply ‘doing the deal’ to thinking about life for the business beyond the deal.

The Eversheds report recommends a methodology that rolls out as follows:

1. Inception

  • From the start – 38% of deals where the in-house team were brought in too late suffered problems during integration.
  • Early warning – 59% of all respondents said they had spotted potentially damaging issues early enough to advise that a deal should not go ahead.

2. Planning and due diligence.

  • The crucial stage – 43% said the most common cause of the failure to realise value in transactions was down to avoidable errors in the due diligence and planning phase.
  • Joined up thinking – 70% felt that linking due diligence and integration planning together would help to improve the deal process.

3. Deal execution

  • What matters most – The reasons General Counsel would advise not to proceed with a deal were illegality/regulatory (45%), e.g. bribery, competition and antitrust, and commercial concerns (45%), e.g. price and valuation, litigation risk, integration costs.

4. Integration

  • A false saving? – 83% did not use external lawyers to a large degree during integration, although they were acknowledged to add value. The main reason for this was cost.
  • Avoid mismatches – 26% felt that the failure to realise value in a recent cross-border M&A deal was due to a misalignment between legal dealmakers and the day to day business team.

Recognizing that Eversheds is acutely focused on the implications for the legal field, they found that involvement of external transaction advisory experts earlier in the deal process yielded better results. Applying this thought to and the process outlined above to my own experience, I strongly recommend that cultural due diligence be brought front and center early on. Internal teams are not usually objective enough to evaluate their own culture, let alone that of another entity. When we delve into matters of governance, decision making, core values in action, executive team personalities and styles, we are able to more accurately predict what may happen in integration and beyond. If red flags go up, back away!

 

 

Create a Stronger Brand Through Research and Leadership

As an adviser to SMBs, we frequently are in the role of addressing branding issues in an organization either looking to jump start growth or figure out how to combine forces with a merger partner. In any such scenario, the effort to rebrand is a challenge. To take a known corporate identity and recast it in the minds of a target audience requires research data, creativity, and commitment.

Overture NetworksOverture Networks in the Research Triangle area of North Carolina merged with another competitor, who happened to be located in the same town. Both Overture and Hatteras Networks competed in the telecommunications equipment sector. After the merger, the new company had a broader product line, bigger sales distribution channel, and deeper expertise. Mark Durrett, Overture’s marketing director, and Alicia Smith, the communications director, shared seven lessons from their rebranding experience via the Marketing Profs website this morning:

1. Executive buy-in is critical

Our executive team recognized that our rebranding project had the power to help grow the business and change buying behavior. With the CEO’s support, every executive leader, a member of our board of directors, and other company leaders became involved. Vested in the project’s success and expecting measurable results, they all cleared their calendars to participate.

2. Set internal and external goals

The merger brought together two companies with complementary products, but different operating cultures. By marrying the objectives of our rebranding work with the company’s strategic business and growth goals, we helped ensure that everything we did drove business value and focused on growing the bottom line. We learned to be realistic with our timing, knowing that ships don’t turn on a dime, and gave ourselves time to define and then “live” our new brand.

3. Research can inform and guide

There’s tremendous power in asking questions—and in listening. Diving deep, we asked everyone—customers, analysts, internal stakeholders—what they thought we did, how we did it, how we could do it better (or different or easier or with more impact), what they wish we did, how they prefer to work with… you get the idea. After we created a safe forum to receive candid, useful responses, the input poured in. In any such exercise, you must be prepared to get quality feedback; you must listen carefully, evaluate honestly, and decide what really matters.

4. Collaboration (and outside experts) can bring you together

A valued and trusted partner will use your research, extract ideas from the entire team, and empower key leadership to make quality decisions. And just because you’ve expanded the circle of collaboration doesn’t mean you make decisions by committee. With everyone invested (and involved) in the process, our leadership made decisions that the other collaborators readily accepted.

5. Establish a foundation, then build on it

Before beginning any creative exercise—from your new logo to a datasheet—your team needs to have agreed on all the elements that define you as a company. Armed with those foundational brand elements, you can effectively build out the language, design elements, stories, and guidelines that allow your brand to grow in the direction you desire.

6. Convert collaborators to evangelists

Executives and other leaders have a unique role in sharing your brand story with customers, analysts, employees, and key stakeholders. Ideally, they will transition from collaborators to evangelists. 

7. Keep walking the walk: You have to live the brand

Once the launch party fades, the hard work begins. Hopefully, by now, your entire company agrees that your brand consists of everything that has anything to do with your company, and that your brand goes everywhere. Your stated values must become reality. Anyone who interacts with your people or your products, receives an invoice, or sees your logo—really anyone in any circumstance—expects an experience that aligns with your brand attributes. 

 

Even if you have not undertaken a rebranding project, you and your company can benefit from the advice offered above.  Think through how you can solicit and implement feedback from customers. Incorporate their input into your messaging, involve executive management in the process, and seek to build collaboration into brand evangelism.

Crank Up Content Marketing For 2013

One of the leading developments in marketing has been the increased importance of content management strategies. With the proliferation of communication via the internet, companies of all sizes who are serious about engaging their target audience are looking to content as a significant tool. Clare McDermott, writing for the Content Marketing Institute today, took the opportunity to speak to to Amanda Nelson recently about how her organization creates content that is compelling, fresh, and engaging. Amanda manages content for Salesforce’s Marketing Cloud platform. Her job is to create and curate content for the Salesforce Marketing Cloud community. She manages everything from the blog and eBooks to webinars and infographics — with the help of a content team, of course.Newsjacking

Excerpts from Clare’s interview with Amanda appear below:

CMI: What issue do you think your content solves for your audience?

Amanda: Businesses want to become social, but they don’t always know where to start. What we do is create content to educate these organizations in the hope that when they are ready for social media monitoring, engagement, or publishing software, they will think of us. 

What kinds of content tactics are you using?

What we do is develop a content engine. A content engine starts with a central focus. In our case, it’s an eBook, but it could be a case study or any other piece of content that a company might have. From there, we publish the content by recycling and reusing it on multiple media:

  • We’ll read the eBook aloud and make it an audio book.
  • We’ll interview the customer for a quote in the eBook and then put that up as a video.
  • We’ll take the audio from the video and make a podcast.
  • We’ll create a presentation from the eBook with highlights.

What results have you gotten since you started using the “content engine”?

We’ve  had significant increases — about a 300 percent year-over-year increase in our eBook shares and downloads. I believe social shares of our blog posts increased by about 150 percent. What challenges have you run into?

A lot of people want to plan and curate, but at the end of the day, we need writers.. I sometimes have a need for (outside) writers..I’ll go out to the community and get guest bloggers. 

What’s your favorite tool used to communicate with the team?

We use Google Hangout because we’re actually all spread out across the country and Canada.. it is great because it’s video and it can hold up to 10 people. There are also fun things that you can do. You can do screen share or overlay funny faces. Whoever is talking is displayed predominately so it constantly changes. It’s in real-time, easy to use and free. The hangout is public so anyone else can join. People can see that you’re hanging out. It’s very social.

What are the most exciting examples of content marketing that you’ve see outside of your own business?

“News-jacking:” you see what’s going on in the media and they’re able to create content around it that becomes really shareable because it’s sitting where it’s hot. 

As you read through Amanda’s comments, take note of what she has done (with plenty of resources including a team of people) and think through how to interpret it and implement similar concepts in your business. We suggest the following:

  1. Think through your audience, where they hang out, and what your main message to each segment may be.
  2. Create a content engine that is your prescribed way of being consistent.
  3. Think about ways to use free, crowdsourced help for additional content.
  4. Investigate Google Hangout as a tool for enhanced collaboration.
  5. News-jack something interesting to supplement your original content. (Like we just did with this excerpt!)

 

 

 

Changes in Marketing You Need to Know For 2013

In advising my clients on marketing and related business development issues, it is often difficult to get them focused on integrated marketing approaches. Many have been sold marketing services by an agency that is not necessarily coordinated with either the overall business strategy or other marketing strategies and tactics. With the advent of a new year come a series of questions regarding the future and direction of marketing given the increased importance of the internet. Recently, Uri Bar-Joseph, director of marketing at Optify, in a blog post on the Marketing Profs website, addressed what his firm sees as trends in marketing for 2013. His opinions are offered below:

Digital-Marketing-Picture

1. Digital marketing will continue to grow

It’s pretty obvious to just about everyone that digital marketing is becoming the main channel for demand generation. But despite the adoption levels of digital marketing, there’s still a lot more upside. In 2013, digital marketing will continue to see huge adoption rates as businesses of all sizes implement all manner of digital marketing tactics.

2. Digital marketing services will surge

Subsequent to digital marketing’s mass adoption, adoptions, digital marketing services will spike. Consultants, agencies, and new services will surge to support new users and meet their demand for assistance.

3. Content creation services and software will proliferate

Content marketing is becoming the core of just about every marketing initiative for B2B marketing as well as B2C. In 2013, we will see a host of software and services solutions for content creation and syndication emerge as companies try to use content for more demand- and lead-generation results.

4. Integrated marketing will gain popularity

After new channels stabilize as standalone, consistent lead-gen options (social media, content marketing) and new channels and tactics emerge with enormous promise (mobile, re-targeting), 2013 will become the year of integrated marketing campaigns. Marketers will try to combine tactics to make use of the compounded effect of multiple channels’ working in unison. The market will react as more solutions will come to offer the ability to manage and measure integrated campaigns in one place, marking a decline in the adoption of one-dimensional solutions.

5. Direct mail will make a return

While digital marketing rises, sophisticated marketers will recognize the potential of direct mail coupled with an online connection to break through the noise. Solutions and services that offer integrated—offline and online—approaches will emerge and gain traction as a result of being affordable and highly measurable.

6. Big Data applications will emerge

Big Data has been the hot topic in the media for the last 18 months, and big companies such as HP, IBM, Microsoft, and other software conglomerates have been developing solutions to tackle Big Data. In 2013, we will see solutions emerge and adopted that offer big data applications for day-to-day marketing campaigns.

7. The immeasurable will become measurable

In 2012, we noticed a lot of talk about measurement and the ability to justify marketing efforts. As ROI becomes essential to the broad adoption of any marketing tactic, in 2013 solutions and services will find ways to measure previously immeasurable tactics and evaluate their contribution to the bottom line.

8. PPC will decline as budgets move to other paid solutions

In 2012 we’ve seen the first signs of decline in PPC usage for B2B companies. In the next year, more budgets will move away from PPC to new and more affordable channels and tactics.

9. Marketing spend on software will increase

As more software and infrastructure for marketing is required, Marketing’s budget will match IT’s.

10. Sales responsibilities will move to Marketing

The expansion of lead generation responsibilities in B2B marketing is resulting in the moving of more sales-related tasks to Marketing. In 2013 we will see marketing teams take over more sales tasks, such as lead qualification, inside sales team management, and sales operations.

How about you and your company? As you think about your strategy for business growth for 2013, which of these trends have you thought about? For me, the top 3 things I want my clients to focus on are integrated marketing, metrics, and a digital marketing (including content) strategy.