Brand Central Station

You don’t have to spend a fortune on intense, consumer-oriented market research to be a success in the B2B marketing space. All you really need to do is set a manageable framework for research, collect the data, dedicate the time to putting everything into context and then act on your findings.

You’ll be surprised at your “return” on the investment.

Set the framework
The biggest problem companies run into when considering market research is related to organization. There are so many options available when it comes to collecting and analyzing data that marketing managers unfamiliar with research are quickly and easily overwhelmed.

Rather than looking at all of the options and their related costs, I suggest clients start on the other end of the project and identify the questions they have about their clients, markets or competitors and determine the value of knowing the answers. Be as specific as possible.

Once the scope of the research has been determined, clients need to decide how much of this they want to take on themselves and how much they want to delegate to an outside expert. The cost of an expert is relatively easy to determine (they’ll give you an estimate or proposal), but the cost of conducting research with in-house personnel is more difficult. You have to consider not only the actual costs incurred related to your in-house persons’ salary, benefits and overhead but you also need to consider the opportunities lost because of the in-house person’s commitment to the research project.

It’s surprising how, once an honest assessment of costs is done, an outside expert is preferred.

Whether it’s provided by an outside expert or determined by an in-house committee, a framework for the research needs to be determined. This means an action plan has to be set with clear objectives, detailed tactics, deadlines and budgets. Remember, every tactic has a cost associated with it – either in hard dollars or time required or both. Be sure to document this and continue whittling away at the scope of work until you feel comfortable the scope can be met given the cost and time required.

From that point forward, all that’s required is implementation.

Collect the data
This is usually the most expensive part of the process. Data collection can consist of everything from conducting focus groups in remote locations to distributing surveys by e-mail. Secondary research may require site visits or trips to research libraries. We do a lot of phone interviewing, finding the one-on-one interaction with people who fit in our clients’ target to be very helpful.

Data collection typically takes the most time. But if it’s done well (and usually conducted or supervised by the person responsible for the analysis and recommendations), the data collected can often provide additional insights that go far beyond the scope of work.

One thing to keep in mind (and it will help you save money): Data collected for previous/other research projects may hold some of the critical information you require. Make sure you have a complete understanding of what information is readily available from this and similar in-house sources.

Put it into context
Although data collection can be the most expensive part of the process, it’s the analysis (where data is turned into information) that adds the value. Conducting analysis in-house is tough, especially for small and mid-sized companies. Why is that? Because objectivity is paramount.

Research specialists can be retained on a freelance basis to evaluate data and provide insights. But beware, if you’re considering a specialist for this phase of the project, you need to make sure the specialist you select is involved in setting the framework for the data collection and after action. That way, you’ll be able to tap into the entire range of knowledge and expertise offered by the expert.

One of the things we do that helps put everything into context is we review our preliminary findings with media representatives we trust. Trust is meant in both senses: journalists we trust to have their finger on the pulse of the industry and journalists we trust to not blab our findings before we’re ready. (You can find more about partnering with the media in the Media Advisor blog.)

The last step in this analysis phase is to help tie the research and its findings to the day-to-day operations and long-term vision of the company/brand. These recommendations are intended to have a definitive impact on the company and its brand(s). And even if the client doesn’t want to act on all (or any) of the recommendations, they should (in the very least) trigger an informed debate that will help the company improve and the brand increase in value.

Act on your findings
The last, and most important, step in this whole process involves putting knowledge into action.

It’s not enough to just know what’s happening. By creating action plans that leverage that knowledge, a client is able to make informed decisions on business strategy, market development, customer management and a wide range of other issues that have a direct impact on the bottom line.

Action is important. Measurement of that action (and what results) is also important. The results of those actions can become the initial data required for another round of market research and business activity that fosters’ the clients’ agenda and business mission.

Technorati Tags: Marketing, Branding, Market Research, Customer Relationships, Vendor Relationships, Employee Training, Sales Training, Informed Decision Making

(c)2006, Brand Central Station – all rights reserved. To learn more about Brand Central Station, please visit our website.

In the marketing profession, we often get an opportunity to see both ends of a business relationship in quick succession. Our negotiations with suppliers and vendors are often immediately turned into business opportunities presented to clients or new business prospects.

This is salesmanship, customer management and business process in its most linear form. It’s not that linear is bad, it’s just not very flexible or creative. Linear thinking in business today is time-tested and trusted. It’s safe and conventional.

The problem is, we live in an unconventional world and those businesses that aren’t creative run the risk of falling fast and hard.

So, how do you foster creativity in a business environment that may not be particularly creative? The answer lies in collaborative techniques designed to bring more people into the solution. With more people come more points of view, more ideas and eventually more value.

Collaboration can be a destructive thing, though. It often needs to break down conventional barriers to creativity. And, quite typically, the first thing to go are the “silos of responsibility” employers and managers often build around themselves.

Explained on mid-level manager in the financial services profession: “We are desperately trying to move away from silo’ed efforts,” in their quest for greater collaboration. The result of such an effort can be liberating – often resulting in a new or unique perspective on conventional business problems.

When the collaborative effort extends beyond the organization and involves clients and vendors, the impact can be felt beyond the immediate return on investment. Increased loyalty between parties – a direct result of sharing the process of discovery that characterizes collaboration – is known as the Hawthorne Effect.

Benefits can be measured on the balance sheet, as well. Improved financial stability resulting from stronger ties with customers and vendors give managers a solid footing for planning and growth. Economies of scale can result from purchases made against long-term order quantities. Sharing resources between parties can help lower production costs for both.

There are always new examples of customer collaborations announced in the media. If you have a particular case study or example you would like to share, I invite you to contact me and we’ll develop a case study to share on this blog.

Technorati Tags: Marketing, Branding, Collaboration, Partnership, Hawthorne Effect, Customer Relationships, Vendor Relations, Leadership, Culture

(c)2006, Brand Central Station – all rights reserved. To learn more about Brand Central Station, please visit our website.

This post is going to sound a bit self-promotional – for that, I apologize.

But I think it’s important business owners and managers seriously re-think the way they’ve been looking for marketing help all of these years. We conducted a poll last year and found that only one in nine businesses regularly used the services of a marketing firm like an ad agency or pr firm. The rest (nearly 90%) picked up the help they needed when they thought they needed it.

The admitted resources used to find this help were not very sophisticated: the Yellow Pages, referrals from friends, etc. And in the unlikely event a company was looking for a more “permanent” relationship, they would often turn to the same purchasing methodology they used for buying raw materials in order to collect information from prospective marketing service providers.

The RFP (Request for Proposal).

Now, I shouldn’t have to tell you how much agencies hate RFP’s. It’s not just the document; it’s what the document stands for that drives us crazy.

RFP’s, typically, ask a number of irrelevant questions with a smattering of intentionally intrusive questions mixed in for good measure. Why clients think they can ask for details concerning everything from executive compensation to old financial statements and tax returns is, quite frankly, beyond me. To compound those intensely personal intrusions with requests for reems of price quotes for printing and production projects for which no “real” specifications exist is nothing other than adding insult to injury.

Why do agencies (especially the privately held ones) get so huffy about these questions?
Because ad agencies and PR agencies are intensely personal business ventures. Criticism of how they are managed is taken as personal criticism of the managers. And, usually, the managers own part (or all) of the company.

It’s a strange dichotomy, but agency principals usually have every earthly possession tied up in their agency. They’re letting everything (and we mean everything) hang out there for the love of the business and on faith that their clients aren’t going to let them down. When someone comes along and starts to question the salaries, perks and benefits afforded an agency owner to help dull the throbbing pain in their gut associated with the risk, it cuts like a knife.

And to question in such a cavalier method as through a generally inane and thoughtless document as an RFP, the pain is all the greater. The mere thought that the RFP responses would be shared with a number of people on a committee – or, worse yet, screened by a support or clerical person – creates a real loathing of the document that results in the worst possible reaction on the part of the agency’s management:

They lie.

Questions are asked that don’t really deserve a response. So they don’t get a real response. RFP’s typically receive vague, meaningless answers that are sometimes so untruthful they’re funny. Besides malicious intent, there are some perfectly legitimate reasons for this:

1. Many agencies attempt to create “boilerplate” answers for most RFP’s in order to cut down on the extraordinary amount of time required to answer them;
2. Many agencies delegate the RFP to lower-level people who either don’t really know the answers or can’t get superiors to provide the insight required to answer questions correctly;
3. Many RFP questions are so poorly worded that they get the answers they deserve – whether those answers are what the client really needs to know (or not);
4. Several agencies are under the impression that not all RFP answers are actually read. As a result, not every RFP question is actually answered.

What clients need to do is find a better way to find the service providers they need. That’s where we come in (and this is where things get a bit promotional).

In the past month, we’ve been working with a number of clients to find everything from public relations and advertising agencies to marketing research specialists and audio production studios. The secret (we’ve found) is to work with the client to determine exactly what their requirements are and how they expect things to work out with the new service provider.

We then structure a rubric for performing a due diligence process on a number of qualified prospects. Much of the information we gather can be culled from sources like Agencyfinder.com or similar services specializing in research, production, printing, etc. (A side note: Business Partnering, Intl. – the parent company of Agencyfinder – is a BCS client.)

At no point is there an “RFP”. If we have questions we boil them down to no more than five and then ask for some correspondence from the prospective service provider to provide an explanation of their position, methodology, resources or credentials. We also call and check on references, speaking directly to people who have worked with the service provider.

Once the preliminary research is completed, we call and talk to each candidate company on our client’s behalf to confirm our findings. Following a credentials review, a short list of prospects is presented to the client for final evaluation and selection.

The whole process is direct, professional and – believe it or not – faster than the “traditional” method involving RFP’s. And, as a side benefit, both client and service provider come into the relationship enthused, informed and ready to do business.

It’s a gratifying experience. That’s why plan on continuing to help clients and service providers make connections.

(c)2005, Brand Central Station – all rights reserved. To learn more about BCS, please visit our website.

In this recent article in B2B Magazine (“Weak dollar lifts some firms”), writer Sean Callahan investigates some of the factors helping to drive foreign sales for some smaller US manufacturers. While the weak US dollar (versus the euro and British pound) is certainly one factor, it’s not the only factor driving sales volume.

As it turns out, ease of communication is a key factor in developing a preference for US-made goods versus other foreign sources of products for EU-based customers. Companies are finding an advantage in diverting resources into communications in order to make their products features and benefits more apparent in various European markets.

According to Callahan’s story, the Internet, in particular, has created favorable conditions for US-based manufacturers. E-mail and simplified communications that when combined with the American’s “sense of urgency” helps speed transactions and product delivery.

“It’s not necessarily the weak dollar [that attracts business from Euorpe];” writes Callahan in an interview with Bill Gilber, president of Serville, NJ-based Branch Environmental. “In part, it’s the Internet, because it’s much easier to reach us.”

The Winning Formula
So, what seems to be important in order for US manufacturers to compete effectively in Europe and other parts of the world? Price alone is not that important. In fact, as China continues to grow and its manufacturing capacity continues to increase, the US will have problems competing with China at almost any price.

Production capabilities, quality and capacity are important factors. But where those factories are located and who staffs and runs them will vary from US manufacturer to manufacturer. Heavy manufacturers, like Deere or GM or Caterpillar will probably continue to find and locate plants in Europe to produce product for sale into the market. Lighter manufacturing companies may decide to maintain a domestic production operation in the US and ship to markets that express a demand. Either method can work, but demand must be created and maintained.

And in order to create and maintain that demand, US companies must learn how to market their product in a way that’s slightly different from how it’s done in the USA. Marketing for any product, especially B2B products, can’t be done on an international basis by merely setting up distributors or indepedent sales representatives.

American marketers must consider making a long-term investment into the markets that are most appropriate for them. Whether that investment is in advertising, public relations, events, trade show support, etc., those decisions remain the purvue of the client. But three general rules applly in this situation:

1. Take your time. One of the early lessons taught by US-based marketers who attempted to establish their brands elsewhere is that Americans don’t have a lot of patience. In some countries, they’ll deliberately avoid buying US-made products for as many as five years to make sure the American company’s management has a true interest in their country.

2. Remember to “tell” before you “sell”. To us, your product’s benefits might be obvious. But in places like Europe and Japan, consensus is vitally important so you must win over a number of people on the client side, first, before you even ask for the sale. This is especially difficult for US-based companies who are competing in an RFP-based, bidding system. A native counsellor is highly recommended in these situations to give the US company a clear view of where they stand in the cutlural understanding.

3. Be aware of cultural filters. Cultural filters for both parties in a negotiation (or sales pitch) can completely derail a conversation and make working together an near impossibility. Spending time with a knowledgable marketing advisor in the market would be tremendously helpful in identifying and addressing the various cultural biases that are likely to cause problems for a US manufacturer.

Of course, this would be the best opportunity to talk about our international network of business partners and our free search and selection services – but I won’t do more than that. If you want to know more, just follow the links.

Good luck to you all.

Business marketers are constantly under pressure to find ways to do more with less. That’s not just a feeling or an “educated guess.” It’s a documented fact.

The squeeze is coming from all directions. Small, nimble, niche players are finding ways to nibble away at profitable business segments while large, multi-national competitors are constantly trying to comoditize products in order to take advantage of their manufacturing scale. On the other hand, many businesses are operating on short purse strings that could significantly change their prospects for the future if inflation and/or interest rates don’t remain in check.

Somehow, all of this pressure seems to land in the marketing department first.

Maybe a “soft” area like marketing seems to be ready for belt tightening every year because many marketing managers are unable to succinctly explain their spending plans or justify their past purchases through some kind of ROI demonstration. We’re not sure. But we do know that many ad agencies and PR firms do not do their clients any favors with what is usually perceived as loose operating standards, a general lack of process and in the worst cases, a complete inability to manage projects according to approved budgets.

There are options. Clients don’t have to suffer through this alone. In many cases, agency principals just need the encouragement to bite the bullet and champion some internal change. In many cases, an agency president or managing director may be reluctant to create more internal structure because of the internal resistance that is assumed. In reality, once people inside the agency realize the client needs the change in order to achieve greater satisfaction with the agency’s performance, everyone from creatives to account management are usually happy to accommodate.

It seems job security is a concept that hasn’t been lost on agency folks.

On the other hand, many business marketing managers don’t feel comfortable making management suggestions to their agencies. A primary reason for this may be the relative seniority of the different players involved – a junior level client would certainly feel out of place making management recommendations to an older, more experienced agency principal. There are options, however:

Suggest the agency contact their trade association to investigate best practices in areas where the agency is not performing acceptably. Whether it’s billing practices, brainstorming, media relations measurement, etc. – trade associations from the AAAA’s to the Council for Public Relations can provide useful information to member firms.

If your service provider is not a member of a national trade association, they may try purchasing related research from services like Second Wind or others. These services conduct annual research studies into agency operations and best practices.

Sometimes agencies can’t or won’t change on their own. In those cases, business marketers find it helpful to engage an outside consultant to conduct a performance evaluation and help develop a program to improve the operating relationship between client and agency. Brand Central Station provides this kind of service for clients with prices starting at $7,500. If you’re interested in learning more, let us know.

Finally, there are times when marketers find it necessary to change their service provider. It’s important to carefully evaluate your needs and expectations first – and that is best done under the review of an independent consultant. An experienced search consultant will help the marketer develop a clear set of criteria for the evaluation of prospective agencies and will accompany the marketer when they tour qualified agencies and conduct meetings to discuss critical performance issues.

The search process used by Brand Central Station may prove useful in understanding this process.

(c)2005, Brand Central Station – all rights reserved. To learn more about BCS, please visit our website.

I can’t tell you how many B2B clients have told me that branding is a waste of their money. That comment is almost always followed in the next breath by the phrase “warm and fuzzy”.

Well, if this is your idea of branding your business – you’re right and wrong.

You’re right, doing a soft, image spot (or ad or brochure or whatever) probably isn’t the best use of funds for a business who sells to other businesses. But if you think that’s all there is to branding, you’re flat out wrong.

In fact, the most powerful tool to use to build your brand comes in to the office every day and spends most of his or her time talking to customers. Sales people often hold the key to successfully branding a B2B enterprise.

Brands are built in one way – by making promises (setting expectations) and by keeping promises (meeting expectations). If you’re good to your word, you build your reputation and that’s good for business. And in the B2B enterprise, no one is more important at both making and keeping promises than the sales person.

That’s why I’m providing a summary of seven key marketing strategies presented by Rob Engelman and tailoring those strategies to the individual sales person. These strategies take the basic marketing practices we encourage businesses to use on a corporate level and re-packages them on a more personal level.

1. Focus your pitch. Engelman encourages suggests creating a profile of your ideal customer. We suggest taking it one step further. Try to sell only to those customers who are inclined to buy from you. Our friend, Jacques Werth (the author of High Probability Selling), reminds us that the selling process gets much easier if you weed out the folks who don’t want to buy from you in the first place. Hard to believe? Check out the book.

2. Feel your customers “pain”. With all apologies to Bill Clinton, salespeople need to be tuned in to what drives their customers crazy. This requires active listening and an objective point of view. It’s a learned skill and once mastered, can be invaluable.

3. Define your personal value proposition and relate it back to the corporate brand. This is key. Salespeople have to make a great impression – talking to customers who are inclined to buy and empathizing with them will help make the great impression a salesperson needs to get close to the customer. But once close, the salesperson has to transfer the chemistry of their relationship to the company they represent. The best way to do this is to “become” the corporate brand by tying those things the customer likes about the salesperson back to the business.

4. Turn clients into your advocates. Nothing tells your story better than a satisfied client giving a referral that wasn’t coerced. Case studies are great (I use them frequently in my line of work), but actual referrals from clients are even better. There are a number of ways to turn clients into advocates.

5. Build high-power allies. It’s all about the network, baby. Salespeople should be careful not to concentrate their networking efforts inside one industry. Sometimes the most valuable pieces of information, advice and new business come from network members who exist outside the list of “usual suspects.”

6. Become a celebrated expert. We tell businesses they need to create a well-defined position in their market in order to succeed. The same is true for salespeople – especially senior-level account reps and sales managers. Well known, personal reputations can provide leverage in a negotiation or help settle disputes.

7. Use direct marketing practices to your advantage. Communicating with prospects and customers on a regular basis is key to achieving top-of-mind awareness and establishing credibility with the people who matter most to your success.

By using these well-established branding and marketing techniques – this time on an interpersonal level – will help salespeople make a great impression and build a relationship based on trust and performance.

Good luck.

I was in Las Vegas last week on a vacation with my wife.

I say that not to brag but just as a point of reference. You see, we were sitting at breakfast minding my own business when I couldn’t help but overhear the three businessmen sitting next to me chattering away. One was an owner or manager (I’m not sure which) for a company that manufactures sunglasses. He was being sold to by two guys representing a plastics coating company.

There they were, sitting at a breakfast table in a restaurant in a resort, talking business – and it dawned on me: “There’s a reason why these guys are sitting here among the palm trees and gourmet coffee talking business rather than back at the office with the Styrofoam cups and generic blend.”

It may seem obvious, but if you want to make a customer feel special, you treat them a certain way. Duh. We’ve all done that, whether it’s a steak dinner or a round of golf at a nice course. But why?

Because most of us have a set of common reference points as to what is nice and what is tacky – set, in large part, by the opinion leaders in the media. Madison Avenue (meaning the ad industry) has helped lead this image-making process for years. And whether we like to admit it or not, it has an effect on even the hard-working B2B marketing sector which normally eschews glitz and glamour and all-things consumer-related for pictures of machinery, bulleted copy and headlines that often make unsubstantiated claims of “excellence” or “quality.”

In a hamburger or luxury car, we might intuitively know what makes one “quality” and the other “not-so-quality” – but in a metal press, elevator, drain cleaner or commodity, that standard starts to get a little more difficult to define. Especially in bullet points.

So, what’s the point?

The point is that even if your ads, website and collateral material is as good – or better – than your direct competition, that’s not the only group of images (or brands) you’re competing with. We all have a consumer-oriented quality standard that has to be met in order for our claims to be considered reliable and reasonable.

Ask yourself if your business is presenting itself in a way that would stack up respectably against leading brands like Pepsi, Nike or Cadillac. For some folks who deal in both B2B and consumer arenas (John Deere comes to mind), the decision is obvious.

So what are some simple – and relatively cost-effective – things your business can do to make sure it presents a competitive image?

1) Make sure your visuals are high quality. This means you should make sure your pictures are in focus and color correct. Hiring a professional photographer who understands how to use light can make a significant difference, but even if you end up taking your pictures yourself that doesn’t mean you should be satisfied with blurry or under-exposed images to tell your story.

2) Tell your story in complete sentences and save the bullets for the reinforcements. In fact, when we write B2B copy, we start with the bulleted points (after all, those should be the most important, right?) and then write the copy from there. But when we put together the layout of a brochure or ad, we lead with the complete sentances and save the bulleted points to use as either graphics inside an article or for the end in a specifications section.

3) Don’t mess around with your logo. I can’t tell you how many times I’ve seen companies change their logo color to match their ad, squeeze their logo into a corner or stretch their logo to fill some space. Arggggh! If you’re that careless with your logo, what do you think a prospective customer thinks you might do with his order? Be consistent!

4) Always include your contact information – even if it’s just an e-mail address. As a B2B marketer, you have a distinct disadvantage versus larger consumer brands … your customer might not know where to find you. So you have to tell him. At the very least, you need to include an e-mail address but real life addresses; phone numbers and website addresses are always preferred in addition to the e-mail. And one other thing about that web and e-mail address – make sure it’s not a generic one (e.g. aol.com, hotmail.com, etc.) – you’ve got to appear serious and there isn’t much of an excuse anymore for not having your own domain name.

5) Keep your website information up-to-date. Nothing says “We don’t care about our business or yours” faster than completely out of date information on the company website. If you have a press section, make sure you have something on there that is no more than four weeks old. And, by all means, make sure your copyright notice is current in the footer of your website. I remember calling a company once who had an old copyright notice in the footer. I asked to speak to the president about updating his website and was told he had passed away … six months earlier. D’oah.

6) If you use on-hold messaging or music, make sure it’s relevant to the season. Ever go on hold and hear a promotion that’s already passed its deadline or suffer through Christmas music in June? It’s happened to me. Lapses like this tell customers you’re behind the times.

It’s just a half-dozen suggestions, but if you follow them, you’ll be able to hold your own against your competition.

Good luck.

(c)2004, Brand Central Station – all rights reserved. To learn more about BCS, please visit our website.

Many of my business partners wonder where I come up with terms like “communications chain” – but my B2B clients understand the concept. You see, the general concept is that the process of moving a person from “prospect” to “loyal customer” is a lot like moving raw materials and finished goods through the supply chain.

In our model, each step along the way results in a behavioral change that makes the individual more pre-disposed to our sales pitch. In general, the every individual goes through the same continuum. They start out in ignorance, become aware, get educated, are motivated and then the behavior is reinforced.

This continuum is handy in understanding the basic concept, but the “communications chain” planning process we use breaks it down even further. Each critical decision made by a person as he or she makes the journey from prospect to brand “believer” can be described by a unique (and measurable) action.

One of the most critical links in that chain is the conversion process from qualified lead/prospect to first-time customer. John M. Coe’s white paper is a concise outline of the “steps within the step”. Coe, the president of Database Marketing Associates, helps identify the various communications obstacles that often become present in the B2B marketing process.

Why is this important for marketers – either agencies or in-house people to understand?

Because this is the point where sales and marketing first mix. And if you don’t get it right here, you’ll find it difficult to retain customers and build your market share on the inside (ref. share-of-customer strategies) where it can make a real difference to your bottom line.

Take some time and understand the lead conversion process in your company and draw your own “communications chain” based on your research. You’ll find, most likely, that your company has several chains (sometimes multiple chains per sales person or target market).

In your conversations with sales people, customers, suppliers and customer service people, you’ll probably come to the same realization we often do – that many of the chains can be combined. For us, this serves as the foundation for a communications plan that works toward developing more efficient and effective marketing programs down the road.

Understanding how sales and marketing mix to turn top-line prospects into top-line customers also forces both departments to find ways to communicate and work together. It’s remarkable, really, how often these two functions don’t communicate – and yet both departments are responsible for setting customer expectations.

The additional internal and external discussions will help point out other weak links in your communications chain. Production shortfalls which limit your company’s ability to perform (meet customer expectations) can be, in many cases, worked around through directed communications efforts. At the very least your company can keep customers informed of product delays, service problems or other issues.

In fact, each link in the communications chain can be strengthened through well-crafted communications. But first you have to define and organize your chain.

It’s time well spent and should serve as your first step on that most elusive of marketing grails: measurable return on marketing investment.

But, more on that later.

(c)2004, Brand Central Station – all rights reserved. To learn more about BCS, please visit our website.

I’ll never forget the time I took a PR person into a meeting with a client who manufactured power-washers, drain cleaners, hoses and related equipment. We talked about his business and then introduced our new person and started explaining what she did.

Our client stopped me in mid-sentence: “Oh, we already do PR.”

I have to admit, I was a little surprised. I wasn’t aware of another agency in the relationship. I felt a bit betrayed.

Then the client called in his secretary and had her bring the latest edition of an industry “bible”. He thumbed through to the back of the book and tossed it onto the table. The magazine was opened to a page that contained a small, one paragraph blurb about a new product they had introduced. The image was the cover of a brochure we had produced for them.

“There you go.” he said. “We sent in the picture and a couple of paragraphs along with the brochure and we got this.” He pointed to the blurb.

I looked at my new PR person and she had a look of horror on her face. As if I could read her mind, I saw her at her graduation ceremony, accepting her diploma, thinking she was going to work on changing the world. Now she was faced with the cold, hard reality that – at least for this client – PR consisted of single paragraph product announcements in the back of trade journals.

But it doesn’t have to be that way.

I’m constantly working with businesses to help them understand the fundamental differences between advertising and PR. Primary to that, especially for B2B marketers, is developing an appreciation for what PR can really do for them.

First rule of thumb: PR is NOT just product or new literature announcements in the industry trades.

Jim Schakenbach, the president of SCT Group, has provided a succinct explanation of the differences between the two disciplines that warrants a closer look. But let me expand on things so B2B and industrial marketers can start to understand (and appreciate) why PR is important to their business’s future:

1.) PR is strategic by its very nature – this means you have to have a complete understanding of what’s important to your customer and the media in order to make it work. The homework required to create an effective PR program can yield incredible dividends when re-deployed through other sales and marketing channels.

2.) Advertising and PR work together – especially in the B2B world. Advertising assures share of voice. It gets you noticed. It makes your message worth paying attention to – not just by customers but by the journalists who read the trades as well. If you don’t advertise, your PR efforts will have a harder time taking root. If your name and brand are more easily recalled (through advertising frequency and creativity of message), you’ll find journalists to be more favorably inclined to take your calls, read your e-mails, etc.

3.) Product and literature releases are important – but they’re not the “end all” when it comes to press coverage. That rule also holds true for new employee announcements, retirements, management changes, etc. All of that communication is good – and it needs to be handled effectively. But any PR firm that is worth its salt will help set that up and run those announcements on “auto pilot” focusing, instead, on the news that really matters.

4.) PR does not stand for “Party Resources” Trade shows, employee parties, customer appreciation events, etc. are all important PR tactics – but if you’re only contact with a PR team is to help plan and orchestrate your special events, you’re missing out.

The challenge for most B2B marketers when it comes to dealing with PR people, however, is in the quality of the relationship. PR people are trained to ask “why” and that can get to be a bit grating on busy people who are often as engaged in new product development, finance and direct sales functions as well as marketing.

Just a word of caution – take your time and work patiently for understanding. You’ll find PR people to be tremendous counselors and advocates for your brand over the long haul. But since many of them are trained as journalists first, they come with an ingrained skepticism that can be misinterpreted on the corporate side. That skeptical objectivity, however, can definitely work to your advantage when dealing with an inquisitive press who view it as their job to find the “truth” in every story.

And once you’ve been able to find a way to connect with the journalists who cover your industry, you’ll find your importance to the media has risen far above a new product announcement.

Bacon’s Customer’s Resource Site

In a recent poll conducted by our company, we found that 78% of small and mid-sized B2B marketers did not use an outside marketing service provider when it came to planning, creating or implementing their marketing plan.

That’s bad news for ad agencies, PR firms and marketing consultants.

It’s even worse news for small and mid-sized B2B marketers.

When we asked why, the answers were fairly predictable. And as complaints lodged against an industry go, pretty valid. Marketing service companies, especially ad agencies, are famous for not performing – or if they do perform, being totally incapable of tying the results of their actions to some tangible measurement on the bottom line.

This is the bane of ad agencies and PR firms everywhere: Return on Investment. And while I’m not going to debate or discuss ROI this time, rest assured, I will at some point. Ad nauseum.

Right now, I think it’s important to make clear why more B2B marketers should consider working with an outside service provider when it comes to developing their marketing plans and implementing marketing programs down the road. But first, let’s review the three major complaints lodged against outside providers:

1.) Outside marketing service companies are too expensive. This is the classic price versus value complaint and it’s not exclusive to marketing service companies (see complaint #3, below). The fact is, any outside supplier is too expensive if you don’t see a value in what they provide.

Furthermore, if you’re experience with ad agencies, PR firms and other marketing consultants is one of duplicated services, obvious insights, late work and blown budgets – you have had to endure the absolute worst these professions have to offer. I would hate to tell you how many times I’ve heard those kinds of charges made by clients against both former and current suppliers.

2.) Outside marketing service companies don’t know my business as well as I do. This complaint originates from an ignorant statement many agencies make when they pitch a new piece of business and clients lap up like puppies. I absolutely hate it when an agency says: “We know our client’s business (or “XYZ” industry) as well or better than our clients do.”

Boy, I sure hope not.

When I work with a client to select an agency, I try to find agencies that know the business of crafting well-targeted and highly effective communication, not making widgets. Ad agencies need to keep up on an industry (communications) that is exploding at a rate defined by Moore’s Law – and that should be a full-time job in itself. Any agency that tells you they are more up-to-date on your industry than you are actually saying either they can’t/won’t keep up on their own industry and/or they don’t respect your own knowledge of your industry. Either answer is unacceptable at best and disingenuous at worst.

3.) Outside marketing service companies, especially ad agencies, take unwarranted sales commissions for work we can do in house at a significantly lower cost. This is a related argument to the first (see above) but has a nasty, envious tone to it. I’ve heard this complaint lodged most frequently by mid-level marketing personnel who view the addition of an agency or consultant as a threat to their own job security. The root of this complaint often stems from previous agency-side experience of corporate marketers and a definite under-appreciation of the media planning/placement, print buying or media pitching tasks taken on by most agencies on their clients’ behalf.

Not to say the complaint isn’t warranted from time to time by unscrupulous (and often boastful) agency types.

The problem here stems from the ill-conceived and antiquated media commission structure most “old school” agencies rely on to generate a profit margin. I won’t get into the finer points of agency management and finance here, but let’s just say that media commissions and mark-ups on printing and production are quickly becoming a thing of the past. Any client who feels they are going to get screwed by an agency or consultant in this area needs to spend some time online or on the phone with agency search consultants who can explain the intricracies of agency compensation negotiation.

So, why should you still consider working with an outside service provider?

If they are sourced and used correctly, an ad agency, PR firm or marketing consultant can be a tremendously productive – and profitable – investment for your company. If you can identify the parts of the marketing mix that aren’t covered effectively with your internal personnel/capabilities, that’s where you need to consider bringing in outside help.

Be sure to write the job description for an agency, freelancer, PR firm or consultant carefully and completely. And, most importantly, keep an open mind to their recommendations and observations. The key value an outside service provider brings to a client relationship is objectivity. By the very nature of their business, they are frequently in contact with a wide variety of businesses and business situations that may relate to the dilemas you face on a daily basis.

Failure to find and hire the right outside marketing service providers will cut out this objective perspective on your business – and that could have a severely limiting effect on your long-term brand value and success. You may spend less in the short-term, but growth will be retarded and advantages will flow to your competition.

And there could be hell to pay as a result.

(c)2004, Brand Central Station – all rights reserved. To learn more about BCS, please visit our website.

There are so many “truths” in marketing that you could create a virtual library of book titles. But some truths seem to be more reliable than others – especially as the landscape of communications technology shifts and changes in dramatic fashion.

One marketing axiom worth living by is that careful planning of marketing activities, strategies and positions saves time, effort and money on the part of your in-house team and the outside professionals who help you build value into your brand (for fun and profit). Steve McKee (from McKee Wallwork Henderson) touches on this in his BusinessWeek article: Sow Now, Reap Later.

McKee encourages companies to take the long view on planning and to invest a significant amount (20-50%) in creating a campaign that delivers both short- and long-term results. That might sound a bit extreme to some business owners, especially those who have been around the block a few times, but there is a rational, business-oriented explanation of the benefits resulting from a deliberate, planned approach to marketing.

Consider some of the common mistakes made by most companies when it comes to setting marketing budgets or determining marketing/advertising strategy:

1.) Companies set their budgets as a percentage of sales. This is a common practice among many sales-driven B2B marketers. Why isn’t it effective? Because this method of setting budgets fails to take brand momentum (in existing markets) and brand inertia (in new markets) into account.

2.) Companies set their budgets according to what they spent last year. This is the number one problem for most small businesses who can’t understand why they’re not growing like their larger, better funded competition. Setting budgets to last year’s level is usually just the first step in doing everything “just like last year.” The problem is, however, that the market is not the same as last year. Marketing programs rarely work better the second time around.

3.) Companies set their budgets at a fixed level over last year to reflect increased costs or projected sales growth. Ok, this is a little better (but not much). To call this “planning” is a misnomer. This only goes half way and is really nothing more than a budgeting maneuver. You will still need to work through the communications issues facing your brand(s) in each market to figure out where the money should go and what you should say.

4.) Budgets or plans are set according to planned new product introductions. Still a little better, just not all the way there. After all, what happens if there’s a product recall or if the competitive landscape shifts due to a new product introduction by a rival brand. B2B marketers get their budgets blown out of the water all of the time by planning this way.

5.) Major marketing programs (e.g. co-op/distributor programs) are cut because of under-utilization over the prior year. I’ve included this because it is indicatave of reactionary planning in many mid-sized and large OEM companies. Legacy programs, especially co-op programs, grow organically and require maintenance. Sometimes that maintenance is more like a good weed wacking than a trim around the edges. But cutting a program out entirely without the benefit of research into the attitudes and opinions of the affected market is a huge mistake.

One thing all of these approaches share is a failure to understand the market/markets they are intended to address. Research is a key part of the planning process (just as it is a key part of the product development process). Asking distributors, retailers and customers questions and review prior years’ data are just two of the many research projects that can yield critical insights into marketing obstacles and potential communications problems.

So, what should you do?

First, start with a clear understanding of where you want to end the year (assuming you budget and plan on an annual basis).

Next, do the research to identify all of the major issues and obstacles in your way. What’s going to hold you back?

After that, determine the financial benefit of making it to your stated goal/objectives on time. What’s the bottom-line impact if you’re an unqualified success?

Next, decide how much of an investment you’re willing to make in a solution that will get you there. This is how you set your budget. It should be determined by what kind of ROI you hope to achieve as a result of your marketing efforts.

Finally, once the budget and timeframe are set and the obstacles to success identified, brainstorm and come up with the best possible way to get from where you are to where you want to be.

Chances are you’ll get there more efficiently than before and learn some new things along the way.

Consider it a dividend.

Ad Strategies: Sow Now, Reap Later