Marketing Defined

Archive for the ‘execution’ Category

Friday, August 28th, 2009

Let me preface by saying this isn’t a textbook definition of ‘Marketing’. It isn’t how the American Marketing Association, or Proctor & Gamble, or even Apple would define it. This is Bob Leonard’s definition of ‘Marketing’ developed over many years of learning what works best for my clients – small to medium sized (SMB), information technology (hardware, software and/or services), business to business (B2B) companies.

Brand communicates the ‘personality’ of the company and its products and services. Some people mistakenly believe that brand must be communicated through advertising and other promotional activities. Not!

The C suite should define and communicate what a company is about, so employees understand and transmit the brand message. ‘Brand’ is communicated through all customer and prospect touch points.

I define Marketing as “anything that helps Sales close profitable deals”. Branding is a part of that, but only a part. It’s an input to the process of Marketing.

Marketing can be used as a tool to help management develop market strategies (for each product/service) – which are built upon detailed descriptions of target prospects. Once we know exactly who will buy each product and service, and why, we can determine the best

messaging (benefit statements, value propositions, etc.)
offers (what will make them take action?)
vehicles (the most effective ways, online or off, to reach them).

Marketing can inject discipline into the Sales process. It can force the development of a strategy, plan and budget that eliminate one-off, shoot from the hip promotional efforts that do nothing to increase profitable business.

Marketing is a process that is composed of many parts. When conceived and executed properly, the return on investment is significant. Marketing is the planting of a seed, and the nurturing of that seed over time. Just as a farmer must water, weed and feed for months before reaping the benefits, Marketing takes time.

Marketing exists because Sales, by nature and due to compensation plans that reward short-term results, is unable or unwilling to perform that nurturing process. They just don’t have the time. Optimal results are achieved when Sales and Marketing work together. When each:

understands what the other is doing and why,
agrees on who is responsible for what, and
can clearly articulate a mutual definition of a ‘qualified lead’.

Marketing performs demand generation activities, and hands off warm, engaged leads to Sales when the time is right. Sales can then spend its time nurturing relationships with current customers to deliver upsells and repeat business; and developing and closing profitable deals with qualified leads.

Over time, I’ve devised a methodology for developing and executing effective ‘Marketing’ for my clients. The basic format is: ‘Strategy. Content. Design. Tools/Vehicles. Test/Optimize.’ More in upcoming posts.

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Tags: business to business marketing, execution
Posted in acSellerant, business to business, content marketing, execution, marketing strategy | No Comments »

Interview with EVP at Safeguard Guaranty

Thursday, July 16th, 2009

Ken Fries and I worked together a long time ago in Agency Automation at Aetna in Hartford. I left for Boston and Digital Equipment Corp. Ken stayed in Hartford and stayed in the insurance industry. His resume includes stints as the Vice President of Agency Strategy, eBusiness and Technology at The Hartford, an independent agency owner (he bought, built up and sold the agency over a five year period), AVP of Project Management & Efficiencies at Mass Mutual; and today he’s EVP of startup insurer Safeguard Guaranty. He knows as much about the state of technology deployment in the insurance industry as just about anybody on the planet.

So I gave him a call.

Bob: Customer knowledge across lines of business has been an issue since we worked together at Aetna all those years ago. When I went to Digital, it was an issue we tried to address with data warehouses. Then, years later at EMC when I was the Insurance Industry Marketing Manager, we tried to address it with CRM and Enterprise Storage Networks. Is customer knowledge across lines of business still the holy grail for insurers?

Ken: Maybe not considered to be the holy grail, but still very, very important in many different aspects. First and foremost is the data. I believe, as do many companies, that data is still king. It indicates past performance of customers and predicts future traits in terms of buying patterns, needs, claims modeling and rate setting for pricing of products. Literally as we speak, Travelers is doing some heavy spending on data analytics and modeling based off this data. I have never seen an insurance company to date making such a tremendous commitment to acquiring and analyzing the data as they are currently doing.

Bob: How is Safeguard Guaranty solving this issue?

Ken: Well, we’re lucky in that we have no legacy systems to deal with. We’re putting systems in place that can truly capture customer data in an Enterprise fashion versus traditional segmented type systems by line of business or market segment.

Bob: Do you think insurance industry executives are finally ready to tackle this beast?

Ken: Certain firms like Travelers, Progressive and Geico are definitely committed to this, but many of the others are not yet prepared from a human resource/expertise perspective to understand the value of solving this issue… let alone ready to commit the substantial dollars needed to resolve it. They won’t do it, until the reality of losing their market share to companies like Travelers, Progressive and Geico hits them smack between the eyes.

So, it’s still an issue in much of the industry, and in Ken’s perspective, vendors need to educate their insurance clients on the competitive dangers they face, and the potential solutions available.

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Tags: agency automation, enterprise storage networks, insurance industry, legacy systems
Posted in execution, information technology providers, insurers, view across lines of business | No Comments »

New Bank Card Regulations Affect IT Shops

Tuesday, June 30th, 2009

I’ve reprinted an article from the July issue of Bank Technology News below. The author, Rebecca Sausner, writes that the new US regulations on credit card companies will eat up most of these companies’ IT budgets over the next couple of years. This is good news for ‘body shops’ who will benefit because internal IT shops at these banks will be overwhelmed trying to rewrite their applications to comply with the new regulations.

IT vendors who supply more innovative Card Company solutions will see their projects sidelined for the next 12 to 18 months. Opportunity always accompanies change, though. Innovative IT providers should study these new regulations and attempt to partner with the Card Companies on applications that can help them comply while also adding customer service functionality.

COMPLIANCE

Card Co’s Day of Reckoning Hits IT

Bank Technology News | July 2009

by Rebecca Sausner

The new federal regulations overhauling credit card industry practices seemed radical, until President Obama signed a law in May that upped the ante in terms of timing and restrictions, and then in June proposed the Consumer Financial Protection Agency. Either alone represent a sea change for card lenders, requiring them, as the American Bankers Association puts it, “to overhaul their entire business models, eliminate specific practices, and reconstruct the way they extend credit and interact with customers.”

“Overhauling” and “reconstructing” have technology implications, but not always good ones. What will happen with the proposed new regulator is unknown – every bank lobby in the country opposes the idea. But the card law is a done deal, and represents such a major short-term challenge for lenders’ technology operations that one banker told MasterCard Advisors that compliance could absorb as much as 70 percent of the coming year’s IT resources at his institution. Everything from customer service technologies, billing and payment processing systems, disclosure processes, and pricing models must all be rewritten or replaced. Best guess is that most lenders will band-aid existing systems to meet the deadline – or face stiff fines – and overhaul down the road. “When you combine that the changes affect every part of the process, and when every part of the process involves technology, it’s going to be a drastic and very burdensome thing for IT departments,” says Michael Brauneis, director of regulatory risk consulting at Protiviti.

Certain provisions require entirely new processes to be added to the customer information file. Among them is the requirement that consumers opt-in to the product feature that allows them to pay a fee in order to exceed their available credit limit. For this, banks will have to build permissions functionality. Some institutions are looking at ways to comply without losing revenue. One solution: instant opt-in via a text message sent to a consumer at the point of sale. “They’re looking for something that could realistically be done so that it will be legal and consumers will accept the charge for the over-the-limit transaction,” says Greg Hedges, managing director at Protiviti.

The changes in how card issuers can utilize delinquency and other information to adjust credit availability will also be onerous, requiring that the links between the risk analysis and servicing side of the system be revamped. “I think it would drive even more the move towards more flexible technology where you could have three pricing tiers or have thousands,” says Dennis Dixon, president of Zoot Enterprise.

The new law may also “serve to wash a lot of the innovation that’s existed in the market out of the market,” Hedges says. “Organizations that had very sophisticated risk-based pricing, who started to look at consumer behavior, are trying to look at how they can keep those practices in place and still stay in compliance.” And for some, the rules may be too much to handle. “I strongly believe a lot of the smaller firms are just going to exit the business,” Brauneis says, adding the understatement of the week, “It’s already less attractive than it was a few years ago.”

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Tags: card companies, regulatory compliance
Posted in acSellerant, banks, execution, information technology providers | No Comments »

Finally Time for Insurers to Develop Comprehensive Views of Clients

Friday, June 26th, 2009

Adapting to the new economic and regulatory realities requires some new thinking on the part of insurance executives. It’s always easier for them to continue using legacy systems without any significant changes. In times like these, however, change is needed. There’s a considerable amount of research predicting that insurance industry IT budgets will increase in the remainder of 2009. This is a good sign for the industry’s future, and for vendors selling hardware, software and services to the industry.

Research shows that insurance industry executives are more likely to seek advice from technology vendors than their counterparts in banking and most other industries. I haven’t seen any convincing arguments regarding why this is the case; but anecdotal evidence from our clients supports it.

A recurring theme in media predictions and analysts’ research is that insurers are investing in better underwriting and improved risk management. These offer good and necessary improvements, but only on the tactical level, i.e. incremental improvements in efficiency.

Technology providers ought to focus on changing the way insurers operate strategically and help them to place greater emphasis on customer lifetime value. It requires some creativity and a change of mindset. It’s amazing to me that this is still an issue. Twenty years ago, when I was in Digital Equipment Corp.’s Insurance Industry Consulting Practice, we were addressing ways (mostly data warehouses) of building 360 degree views of insurers’ clients across lines of business.

It may be that, given the current environment, insurers are finally feeling enough pain to take the steps necessary to increase value and profitability by better knowing their customers. It takes more than just a vision to make things happen, though, especially with such a high level of uncertainty in the air.

I’d like to hear from insurance executives, research pundits and IT providers out there:

Is customer knowledge across lines of business still the holy grail for insurers?
How are you solving this issue?
Do you think insurance industry executives are finally ready to tackle this beast?

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Tags: digital relationships
Posted in execution, information technology providers, insurers | 2 Comments »

Execution – Get’r Done!

Thursday, June 18th, 2009

This is the area where an outside marketing agency can most help an SMB IT provider. Precise targeting, compelling messaging, attractive design, etc. won’t result in more qualified leads if they’re never implemented.

Proactive Not Reactive

This is going to sound like advice from your Dad, or your high school coach, or your spiritual mentor – because it is. It’s common sense and it applies to many facets of life. You have to know what you want. You have to have goals and direction before you launch any endeavor. When you have goals and direction, you can put together a step by step plan to get from here to there.

If you don’t have that plan in place, you’re vulnerable to the influences of many. To put it in terms of a marketing plan for an IT vendor, (this is just an illustration) the desired goal might be to secure face to face meetings with five bank CIOs to brief them about a new SaaS back office banking application. You know your close rate is 40% when you meet with qualified prospects, so these meetings will net you two new accounts.

How do you get from here to there? You might:

develop a demographic description of the bank CIOs most likely to be interested in this solution.
rent a list of 200 CIOs who meet your criteria, containing their physical addresses and phone numbers.
send each of the 200 a letter on company stationary introducing yourself, listing the benefits of the solution, and giving a landing page address where they can learn more.
post the landing page where 20 of the 200 find more detailed information about the solution.
include a registration box where they can input their first name and email address to receive a case study re the solution.
send the case study as an attachment to an email to the 10 who registered. The email thanks them for their interest, and tells them that a ’solution consultant’ will be calling them within 48 hours to answer any questions they may have. The case study outlines an installation of the solution at a bank similar to theirs. It’s clear by the testimonials and ROI quote, that the case study CIO is a hero at that bank.
call the 10 CIOs and secure meetings with five of them.
meet with five of the CIOs, and eventually close two deals.

It seems like a lot of work to get from here to there, but consider the alternative. Cold calls, advertising, golf tournament sponsorships, etc. – all shots in the dark. You may or may not be reaching an audience that can actually buy what you’re selling. You’re messaging is generic and irrelevant, because you don’t know who you’re talking to. You’ll spend a lot of time qualifying and educating people who are never going to buy.

This is a typical scenario that I see every day. It’s wasteful. Just as much money is spent, maybe more, with little or no results.

Why Does This Happen?

There are five main reasons:

It’s nobody’s job to do the work described.
The skill set needed isn’t on the payroll.
There’s no plan, process or roadmap in place to provide direction.
You don’t want to spend the time necessary to source qualified external professionals (and don’t know where to begin).
You can’t afford the fees charged by full service agencies.

Most SMB IT companies can’t justify the expense of having an internal Marketing department. Those that are serious about gaining market share, even in a down economy, are finding external marketing consultants who understand their products, services and marketplace; and can quickly put together a team containing just the right skills and talents for a specific project.

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Posted in acSellerant, banks, execution, information technology providers | No Comments »

Archive for the ‘execution’ Category