GM’s Demand Downfall Gives New Meaning To Un-Leaded Strategy

By John Gaffney, Executive Editor
It may seem like a bit of historical trivia right now, but consider this fact: In 1952, when newly-elected President Dwight Eisenhower needed a secretary of defense that could manage America’s post-war manufacturing capability he hired the ex-CEO of General Motors. Back then it was controversial, because Charles E. Wilson was an Eisenhower crony, and after all the former head of a major corporation that would stand to gain from the appointment. Now that appointment wouldn’t be controversial--It would be fodder for Jon Stewart and Stephen Colbert.

I won’t rehash the current litany of discontinued product lines and lost market share. The real cautionary tale from GMs performance over the past five years is in its complete ineffectiveness to sustain effective marketing measurement, predict key market changes, and generate demand for sustainable product lines. GM’s recent experience proves positive that demand gen is not a luxury. It also shows that “no lead” is not about gasoline for them, it is about having “no lead” on the next right customer.

The proof for me came with the most recent announcements that several gas guzzling product lines including the Hummer, would be discontinued. Smaller, gas efficient vehicles, dealers and consumers were told, would be the focus. So I did a little digging to find out exactly what that meant. It is true that GM has put a lot of R&D money into the Chevy Volt, a hybrid. However, the most I could find out about it was that GM still had not awarded the contract for building the Volt’s battery. Tough to generate dealer excitement for a dramatic repositioning when your lead car isn’t ready. Even tougher to generate demand for new products when the big news is a company’s blockage of demand from its old products.

GM’s move also shows that their marketing measurement has been ineffective. Just a year ago this company, that hired enough consultants and data analysts to match the GNP of a third world country, was proceeding as if the TV spots that filled NFL games with Hummer ads and that incessantly played John Mellencamp song was working famously. It was still working to build brand awareness while the pillar of the whole house, foreign oil, was crumbling.

Marketing measurement and customer needs assessment should have shown GM years ago that consumers want and need reliable cars. Reliable not in terms of highway safety, reliable in the face of oil price swings and fragile environmental conditions. Dodge, as early as last fall, was asking truck owners if they “had a hemi in there?” This challenge was clearly aimed at building demand for products that the company took less than year to bail on. Would GM have the guts to ask its middle class truck base the same question now? If it did the answer would be something like: “Yeah I have a &*&* hemi in here.”

DemandGen, from my perspective, is the way out of GM’s mess. It needs to separate itself from oil demand and get back into the game of auto demand. Show consumers and dealers alike that it’s on top of the situation from a product and process perspective. Dealers know it can spend money and pay agencies for clever ads. Put the John Mellencamp CD away. Stop pretending it’s the late 60s and hemi engines are cool. Get back to some dealer meetings, figure out how the Chevy Volt can compete with the Prius. The answer will be in the demand GM can create for this car by defining the customer that will buy it, and the best ways to get to that customer.

Defining The Value & Role Of Marketing Automation A Key To Achieving Results

By Ian Michiels, Senior Research Analyst, Aberdeen Group

Recent research from the Aberdeen Group revealed approximately 44% of all companies are using a marketing automation tool, and 37% plan to implement one in the future. For many organizations it’s difficult to identify the most valuable marketing automation features, functions, and processes to implement or use; particularly with all the ambiguous acronyms that commonly define the same or similar technology features and functions (MRM, MOM, EMM, MCM, etc.). Let’s face it--even the term ‘marketing automation’ is pretty ambiguous.

Today the most common marketing automation tools include campaign management and tools to automate marketing operations (across multiple campaigns). As a result, the ability to integrate across multiple marketing channels is critical. With all these complexities to think about, how do companies know what technology to implement? What are the true costs of implementing and using marketing automation?

Marketing automation requires a combination of organizational capabilities, process, and technology. You can’t flip a switch on technology and expect to see a higher ROI. Recent research from the Aberdeen Group revealed best practices in the use and implementation of marketing automation technology. By isolating Best-in-Class companies (organizations with superior return on marketing investments, annual revenue growth, and cost per lead), Aberdeen identified best practices in leveraging and implementing marketing automation technologies.

Best-in-Class companies focus on two primary strategies for adopting marketing automation technology; a tool marketing can own and maintain and most importantly, a tool that is easy to use. In many cases, companies must balance the need for robust features with the complexity of the marketing automation tool. Before talking to a vendor, organizations need to have a formal list of all the processes and performance metrics they would like the tool to support. Without this, marketing automation technology investments are a shot in the dark. Additionally, organizations should get input from senior and operational marketing contributors during the vendor assessment. Let these individuals use the potential tool(s) in a beta or demo environment and consider their input when selecting the final tool.

COST OF OWNERSHIP
Training is typically part of initial implementation costs, but ongoing training can be challenging to support. Five years down the line, will your organization continue to train new hires with the same level of training a vendor will provide during the installation? Significantly, many Best-in-Class companies were early adopters of marketing automation tools, tools with extremely robust features and complex interfaces. These organizations now find themselves struggling to support the tool, and their departments and regions often seek their own easy to use and maintain solutions to support day to day operations. The goal of these tools is to centralize and automate the entire marketing process, so ease of use will be extremely important to continue realizing benefits from technology investments.

The organizational culture and processes are also important to consider before implementing a marketing automation tool. Vendor demo’s will wow with the promise of completely automated processes, however organizations need to think about what it takes to make these capabilities a reality inside a technology. Your organizational culture must be capable of supporting the technology; do you have a common definition of a ‘lead’ and a ‘prioritized lead’ between sales and marketing, do you make individuals accountable for key performance metrics, do you measure and benchmark key performance metrics, do you have a standard definition for how to calculate your key performance metrics, lead nurturing capabilities, brand consistency, etc? All of these components and more must be defined prior to implementing a marketing automation tool.

The proliferation of sales and marketing channels causes many organizations to struggle with disparate and siloed data sources. Even today, the technologies that support marketing are plentiful. However, vendors are finally starting to design technologies with purpose built integration. This will increasingly become essential to the future of marketing and sales technologies, so choose vendors that are focused on building tools that are designed to integrate. Thirty-seven percent of Best-in-Class companies plan to completely replace legacy solutions because they are difficult or impossible to integrate with other technologies. The ability to integrate and mesh marketing technologies with CRM, Web Analytics, Lead Management, and eMail is essential.

Before adopting a technology, sit down with sales and marketing and develop a list of the key components, measurements, and processes you would like the system to support. In many cases, if you don’t consider these capabilities up front they can be impossible or costly to implement after the tool is officially rolled out. Don’t worry about isolating every detail, even for Best-in-Class marketing automation requires constant optimization and learning from mistakes. You can always tweak and optimize the system, but it’s extremely hard to change the foundational elements of the solution after the fact.

Finally, whether the tool is on-demand or licensed, IT should be involved in the assessment to help isolate constraints in the design of the initial tool. IT should also be involved to help understand how to integrate the existing technologies in your organizations. Automation sounds great, but if it requires extensive manual work on the back end, sometimes it’s more expensive than it might seem.

Ian Michiels is a senior research analyst at the Aberdeen Group. Michiels covers Marketing Management and Digital Marketing in the Customer Experience Management Group. He can be reached at ian.michiels@aberdeen.com.

The following Aberdeen reports are available for free on the Aberdeen Web site.
->The CMO Strategic Agenda: Automating Closed-Loop Marketing
->Next Generation Marketing Technologies: The Integrated Marketing Solution

Keep Prospects Engaged Over Long Sales Cycles With Drip Marketing

By Geoff Rego, CEO, Market2Lead

If you sell a product over a long sales cycle it is essential for your marketing program to keep in touch with those prospects. You can’t let them forget about you or your competitor could easily win the sale. Case studies have shown that the best strategy to stay fresh in your prospects’ minds is with a carefully-crafted drip marketing campaign.

Drip marketing involves a series of marketing tactics that nurture a prospect from the initial contact until the prospect is ready to be engaged by an inside or outside sales representative. For example, a campaign might offer white papers, webinar invitations, free trials, etc., one at a time, over the course of your sales cycle. The success of such a campaign depends on several factors. Chief among them are obtaining the prospect’s permission to send email messages and enforcing strict cadence rules, so you don’t communicate too often or too infrequently.

PERMISSION
Permission can be a “Catch-22” situation. You need a prospect’s permission to send email, but how do you get it without sending email? You can obtain explicit email permission by using pay-per-click ads to draw prospects to a landing page, on which they exchange their email address (and permission to use it) for something of value. You can also send unsolicited email messages to addresses you obtain from a purchased list of leads. If you are a U.S. company, such messages are legal, as long as they comply with the CAN-SPAM Act of 2003. Refer to online resources such as the Federal Trade Commission’s site at http://www.ftc.gov/bcp/conline/pubs/buspubs/canspam.shtm for more about the Act.

Whether you use online ads or a purchased list of email addresses, the key is to provide sufficient incentive for the prospects to explicitly grant permission for you to send future email messages. Offer a newsletter that provides valuable information, for example. Or offer access to an informative white paper. Although the CAN-SPAM Act permits the use of implied permission, you gain more credibility with forthright communication. Obtain explicit permission from your prospects by providing the right kind of offers to the right people.

CADENCE
Once you have permission, the next step of your plan involves cadence – that is, how often you communicate. Successful marketers have learned that monthly messages are too infrequent. You’ll lose too much mind share if you wait that long before sending the next “drip” in your drip marketing campaign. Bi-weekly messages, on the other hand, are too frequent and can cost you sales by annoying the prospect. The best practice, therefore, is to reach out to a prospect every 21 days. Companies commit a common error when they have more than one person working from the same database. For example, one staff member might send a white paper offer to a prospect and another staff member, not knowing that message went out, could send a webinar invitation two days later.

The most successful marketers do more than enforce a 21-day cadence. They go a step further by scheduling messages based on a prospective customer’s explicit preferences. For example, they allow the customer to specify what day of the week is best to receive the messages. Then, instead of sending all their second stage messages at one time, they spread them out over a week, depending on the prospects’ expressed preferences.

STAGES AND OFFERS
As you plan your first drip marketing campaign, define stages (drips) based on what you already have (newsletters, white papers, etc.) For initial campaigns, three to five stages is optimal. You can always add more tactics after you get your campaign up and running.

When you plan what to offer during each stage of your drip marketing campaign, consider the amount of time a prospect is willing to spend at different stages in the sales cycle. For example, when a person first begins to look for something their business needs, they are really at the “tire kicking” stage. They will spend five to 10 minutes on each vendor’s Web site as they begin to determine which vendor’s products might solve their business challenges.

This is not the time to invite the prospect to a 30-minute Webinar. Instead, provide a Web landing page from which the prospect can quickly receive the most essential information about your product and on which he can provide the most basic information about himself (including permission to send future messages).

With each visit, the prospect is further along the sales cycle and willing to invest more time. On a second visit to your Web site, a prospect might be willing to spend 30 minutes to obtain in-depth information. This is the time to offer a detailed white paper. For your third offer, an opportunity to participate in a live webinar or view a recorded one might be appropriate. If you can provide a free trial of your product, that would be an excellent fourth stage offer. This might also be the time you’ll want to provide the person’s information to your sales department as a qualified sales lead.

MEASUREMENT
A good drip marketing campaign is a living thing. Successful marketers regularly change their campaigns, adding tactics that work and removing those that don’t, for example. This requires some kind of measurement. For example, you should measure how many prospects (by percentage) complete the transition from stage to stage. Determine what offers are most effective in driving such transitions. Optimize the messages and offers that are working, replace the ones that aren’t, and add new stages as necessary. Effective software tools can automatically provide the reports you need to make such decisions.

AUTOMATION
You can plan and execute a drip marketing campaign using manual tools, such as a spreadsheet application. But if you run more than a few programs, each having three to five stages, you’ll quickly find that doing it with a spreadsheet can become overwhelming. As a result, you’ll have trouble maintaining your cadence. In addition, you probably won’t be able to respect prospect preferences such as the day of the week and you probably will find yourself never getting around to measuring the effectiveness of each stage in each program.

Marketing automation software allows you to perform complex segmentation of your prospect database by analyzing data that prospects provide themselves as well as behavioral information, such as how much time each prospect spent on each of your Web pages. This kind of segmentation is difficult if not impossible to do manually.


Geoff Rego is CEO and Co-Founder of Market2Lead, Inc. Rego has rich and extensive experience in building software technology. Prior to Market2Lead, Mr. Rego led the technology build-out of the world’s largest insurance lead generation platform at InsWeb (INSW). Geoff also held various management and architect roles at technology companies including Oracle, Microsoft, Apple and Cisco Systems. Rego holds a MSCS from University of New Haven and MS Chemistry from Loyola College. He can be reached via email at geoff@market2lead.com; or via phone at(408) 907-2821.