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Francois Wolf

The time investment required to get to the nuggets hidden in the long tail will just get bigger, so much so that most of the tail will remain hidden but for a small circle of followers. Sure, you can Google key words for your topic of interest. Add some persistence and some “Internet research skills” and you can find a lot of relevant material. But this just points to the fact that the present version of “search” is still a very crude tool, and that we are on a collision course with a mass of data that will result in frustration, indifference, or both. That would be a loss for everyone. What’s the way forward?

What we need is a much more intelligent filtering mechanism: something like the software version of a personal librarian or a dedicated research staff.

We have lift-off

We see the first glimmer of this in RSS. You can populate your personal homepage with data sources that you select and that are constantly refreshed. But that’s just data aggregation with a dynamic twist. There are no brains in it beyond your selection of sources. If a different source comes up with an article on a topic you are trying to keep up on, you will only get to know about it if you perform your own research, or if a friend send you the link. As the number of data sources grows with ever more contributors, there is a great chance that great ideas will be lost in the noise.

The Intelligent Agent

What we need is a software agent that intelligently, dynamically and semi-autonomously generates an information dashboard on any topic we choose to “search”. The user will roughly configure the agent’s search parameters. The agent will then produce the data dashboard according to the preferences set by the user for:

• Type of information source (website, blog, news site, university site, company site, etc)
• Amount of information – We need to be able to get a “casual” data collection for our hobbies, for example, or much more formal data collection for academic research;
• Prioritization of information – the user should be able to choose the structure of the data pyramid that the agent produces; the pyramid will result in data that goes from the general to the more specialized, just like any good bibliography. We should be able to define the height and the base of the pyramid.

Of course, the agent should be graphically configurable through the manipulation of objects – WordPress for example does that already quite well in its dashboard. We should be able to browse through it efficiently on a number of devices.

Training the Agent

The agent needs to apply intelligence regarding each piece of data it considers to reference in your “dashboard”. (We won’t call it AI because, somehow AI got a bad name.) The intelligence will be provided by each user through “training” provided to his/her agent in the form of archetypes of the types of data that are acceptable. The user could also define flexible or “fuzzy” parameters that could be the key to making sure that the agent does include some “long tail” items that would not usually make the cut in a more strictly defined search. We can also imagine an online venue where these different customized filters for various topics could be made downloadable or come to be traded. Some of them may become important IP and a strategic advantage for companies.

The progress of Intelligence embedded in our tools needs to match the rate of information creation or the sum of our newly expressed collective thinking will not create more value for anyone. It may sound like science fiction now but what are the alternatives?

(1) Get going with video now. You can’t afford not to.

An image is worth 1000 words, so how about video with 24+ frames per second? That’s important not just because the human brain is wired to track motion, but also because a moving image directly communicates so much more information, and can play on a much more subtle register. Video drives response rates that are 5-10 times higher that other tools. That is not a fact that can be lightly ignored without suffering some competitive pressure from firms that do use it. In other words, the arms race is on.

(2) Supercharge your normal online campaigns with video

Think of it as an energy boost. The basic mechanics of online marketing are not fundamentally changed by video, but conversion rates can be radically improved. Banners and email campaigns can link to a landing page that is augmented with a targeted video about your offering. It is the natural step up from having a static landing page with relevant content. As with any landing page, you need a Call to Action (CTA) that puts the prospect on the road to solving his/her problem. That CTA is that much more effective because it is being communicated through sound and moving images, not just by a bright button.

(3) Don’t be too nervous about quality

Marketers still exhibit a bit of trepidation about using video. Most of the time, the reason is that the assumption of what is acceptable quality is too high. Video has become very democratized since YouTube has become a global phenomenon. Originality and “coolness” can easily make up for lack of professional production values. Of course, the expectations may be implicitly different for a worldwide brand compared to a campaign run by your average SMB, but unless you are in a vertical that is used to a high level of formality, you should not be overly concerned.

(4) Try to do your videos in-house

That’s the logical consequence of the “lower quality expectations” and the affordability of video-making tools. A marketing team with some creative talent will soon develop an efficient  process for making videos. And the boost to morale and creativity alone is almost worth the journey.

(5) Pick where you will use video first

Video can be used for email lead generation campaigns in high conversion landing pages. But video can also be used to replace traditional customer-facing marketing deliverables:

• Printed brochure => Video Brochure
• Press release => Video Announcement
• Printed Sales guides => Video training documentation for Sales
• Printed manuals => Video product installation instructions

You can’t do everything at once, so pick what will have the most impact.

(6) Video is different, so track it differently

Web and email marketing analytics are still relevant tools (number of views, click-throughs, forwards,  referrer, etc) but they need to be augmented to take into account the specificity of the video medium. Many additional pieces of data can be gathered regarding the way the prospect interacts with videos. Understanding which part of the video has most impact by detecting where it was stopped, rewound, where screen shots were taken, when the viewer changes to full screen, etc, is going to be important to the optimization of video as a marketing tool.

(7) Proactively make room for video in your Marketing budget

These are times when marketing budgets are already being slashed. All the more reason to focus on getting maximum bang for the buck from what remains. When response rates are expected to be at least 5x higher, video cannot be just be viewed as an afterthought or a nice-to-have. Make a resolute decision and cut some older media platforms out of your budget. Program the time for your team to produce or, (if you outsource), supervise production of your videos. Yes, they are more work, but hopefully your budget will grow  if videos eventually drive enough incremental business.

Today, “focus” is an almost universally accepted imperative when elaborating a business strategy. But tunnel vision is a risk inherent to concentrating on the pressing objectives of the day. So what happens when focus turns to tunnel vision? What are the signs? How does one resist it?

Clearly, there is a right way to focus, as well as some pitfalls.

To focus means that you are:

• Strategically concentrating your resources to succeed in a well-defined target market.
• Constantly monitoring the status of your business.
• Still gathering new information on your current space and, more importantly, on the next one.
• Concentrating on how to change the organization, rarely in very big ways, often in smaller things.
• Still thinking freely about your strategy: you can still critically evaluate new data that may or may not fit conveniently in your current model.

In contrast, when falling victim to tunnel vision you are:

• Always using the same data sources
• Selecting facts that  serve to reinforce your current strategy, rather than test its foundations
• Playing defense: you are static; your energies are concentrating on the status quo, (which never lasts).
• Trying to remain intentionally or tacitly in your organization’s comfort zone

The antidote to tunnel vision:

• Nurture established revenue streams with an eye for funding the next success. Never take the current “focus” for granted.
• Make a habit out of continuously evaluating your strategy. Getting outside help can be useful: “the spectator sees more than the actor”.
• Be systematic about continuous perspective widening: meet new people, learn about new concepts from other fields; allow experimentation with new ideas.

The Right Stance: Strong central vision with active peripheral vision.

Effective focus equates to being able to serially and dynamically apply focus to successive revenue-generating situations. It’s a balancing exercise where practice makes perfect!

But when times are tough and budgets and teams get slashed, marketing re-evaluates budget allocation to concentrate on programs that yield the best results. In this recession, email marketing is one of a handful of tools selected to bear a substantial portion of the revenue generation burden.

Why? Here are ten reasons:

(1) Breadth of coverage. It is possible to touch a great number of people with a single blast.

(2) Scalability. The costs can be as high or as moderate as you want to make them. Increasing the size of the lists usually results in a moderate increase in monthly fees from the email distribution service.

(3) Optimization heaven. Email is supremely suitable for refinement through a/b testing. Even marketing geniuses must test because there is just no way to predict responses. It is the road to rising effectiveness and better ROI.

(4) Standards exist. Email is universally used, and has been now for some time. There are a lot of metrics and benchmarks available for many industries that help gauge success.

(5) Identifies prospects. Each recipient and respondent is known, at least by their email address. Online behavior can be tracked even if real names are not known. At some point, if the prospect is interested enough, s/he will yield actual personal details.

(6) Easily targeted. Email is the ideal tool for addressing distinct verticals and/or segments with different copy and creative for each one. When obtained through opt-in tactics, email can touch people who have a genuine interest in a company’s offering.

(7) Produces instant results (almost). A well oiled email machine will be able to tell within a few hours, and certainly within  days, if an email campaign has reached its goals.

(8) Highly measurable. Did we say measurable? Because it is quantifiable by nature, email on its own is capable of washing away the image of “fluff” that marketing has with some non-believers.

(9) Can be automated. Marketing automation tools like Eloqua, Manticore and many others can make fast and reliable lead nurturing a reality even with a limited staff.

(10) Linked to Content Marketing. Providing free, relevant content is emerging as one of the most important trends in Marketing, especially in BtoB. Email is a very effective medium to advertise the availability of valuable  content that is of  interest to specific groups of prospects.

That’s a lot of advantages when you are trying to concentrate what is left of your marketing budget on just a few reliable tools. Email marketing can be labor intensive, especially when you start multiplying targeted campaigns.  But effectiveness is guaranteed when it is well managed.

Going vertical can proceed along two very different vectors: one is a “soft”, messaging-oriented axis, the other is more focused on product, or it can be a combination of the two. The costs and risks involved are very different in each case.

(1) Selling a current product to another vertical may require reconfiguring the offering and the messaging while leveraging most of the R & D and operations. Experience shows that this is easier said than done as many companies have trouble generating the customer-facing content for a different set of customers.

(2) Designing a new product for the current vertical can be a low risk strategy as long as the new offering addresses a problem experienced by a significant proportion of the vertical,  or if it solves a very high-value problem.

The final option is the most risky and involves a new solution for a new vertical. Some companies actually manage to design a great product for a new vertical, either through intuition or research, but stumble on the execution steps required to produce a hit.

The Horizontal Challenge

In many industries, the opposite strategy, let’s call it horizontalization [ugh], is very effective and can represent a formidable obstacle to the verticalizer. Products with general applicability can be sold across many verticals usually on the basis of a very competitive price and “good enough” functionality. For these players, volume is the key to achieving economies of scale to keep costs and prices down.

For the verticalizer, the question then becomes whether enough incremental value can be added to the vertically targeted offering to justify the price delta with the more generally targeted product. That will depend a lot on the nature of the problem that customers are trying to solve. A more generic product will typically underserve a specific vertical  making customers sensitive to alternative solutions.

In practice,  segments within the vertical that perform specialized tasks are the ones that will see value in vertically focused products. Carefully scanning the problems encountered by customers in the vertical will uncover the urgent and important problems to solve. There is no better way to do that better than to be operating in the vertical in the first place.

So what are the dynamics, and what can be done to maximize the chances of success with a vertical strategy?

A vertical strategy  focuses the company’s resources which results in a stronger offering for customers in the target industry. As a form of specialization, it acts as a barrier against entry by would-be competitors. The strategy is reflected across all the functional areas in the company.

• Products are more specialized to the needs of the industry, and customers are willing to pay more for specialized solutions.
• Marketing messaging is more relevant by using the industry’s vocabulary and addresses specific concerns.
  
• Technical  Support is more competent because it can accumulate more troubleshooting knowledge that relates directly to the usage models in place in the target vertical.
• The Sales team is more effective because it can deepen its understanding of a certain type of customer, hone a certain sales pitch to perfection  instead of struggling to explain multiple value propositions to a diversity of prospects.

More importantly, customers references gained in the vertical are powerful tools for acquiring other customers within the same vertical.  Overall ROI on the marketing budget is expected to be higher. The entire marketing budget can be effectively leveraged to acquire customers across the industry. Indeed, there is less re-training, less re-creation of collateral, fewer trade events.

Who can benefit from a Vertical strategy? More on that soon.

Share your views:

The story rings like a good metaphor for how we should drive better ROI for Marketing spending in an environment of prolonged scarcity of  financial resources. The fact is that many companies and start-ups have gotten used to doing things in ways that require too much capital. This is the time to do more with less and it so happens that several recent developments allow marketers to do just that.

(1) Democratization of professional grade media production tools: Video in Marketing is hot. It drives better responses from prospects across all delivery platforms. The good news is that producing high quality video has become accessible to almost any company with a modest budget and a bit of dedication. Producing Hollywood grade material is no longer required now that video production and distribution has gone mainstream with the likes of YouTube.

(2) Powerful and low cost media distribution tools. Social Media certainly fall in this category. Email marketing is a now venerable tool that still drives the best ROI when carefully used. Marketing videos and demonstrations are everywhere now and can produce geometric viral distribution when they strike the right chord.

(3) Effective virtual personal presence technology: After many years of fits and starts, it seems like video conferencing is affordable and, more importantly, acceptable from a functional point of view. There are also a lot of internet-based communication resources to cut down on travel expenses while still getting work done: Webex and Skype are obvious examples.

(4) Powerful Marketing Automation tools: Several vendors now exemplify the ability to capture and nurture leads in an effective and measurable way through automated marketing systems. In a time when marketing teams are being deeply slashed, this is the only way the remaining structure can still meaningfully interact with customers and prospects.

(5) Software that incorporates the best processes and intelligence: Beyond Marketing, best practices from top firms are being distributed at an unprecedented pace across many industries thanks to companies like SAP and Oracle who embed the requests of their very best customers into software  solutions they sell then to everyone else.

The Fed has issued a report stating that the economy will not significantly improve until the end of 2011. This means that for some time here, we will need to achieve 90% of the objectives of marketing programs with 50% of the budget. Much of what is required is a change in attitude, a different approach that assumes scarcity rather than abundance.

We can be certain that great lessons and good habits will be formed in this period of hightened financial thrift. This is the time when companies who are willing to adapt and step up to the challenge will establish new competitive positions. The recession will also open the door to many products and services that deliver optimization and cost savings.  They will drive the next wave of productivity that will get us out of this mess.

Although customers as a group have requests, ideas, suggestions, and legitimate problems that need solutions, only  the company’s management and the CEO can have a Vision. Only the company’s leadership can sort through all the customer feedback, select the data that aligns with capabilities and resources, and build a viable business.

Choosing a direction may be most difficult for BtoB companies that have a track record of acquiring a broad variety of customers. Sorting through the data now becomes the real test of skill and most importantly, a test of guts,  as some tough choices need to be made. That big customer that could bring substantial revenue may be a lone voice while several smaller ones may represent the early adopters of a much larger group. Only the disciplined targeting of the latter segment will eventually lead to a strong competitive position and growing revenue.

Of course, start-ups can also have a hard time with this concept, being under pressure to acquire at least a few customers quickly both to validate the premise the company was founded on and to get some early revenue. But sooner or later, and the sooner the better, choices will have to be made as to which segment to serve. It is the only way to compete effectively.

The logical consequence is that some customers will be purposefully ignored. Good customer analytics will give an indication of which group is the most desirable to focus on. Unfortunately, that’s looking in the rear-view mirror. Only insight into the evolution of key factors in the future will dictate how prominently current customers figure in the company’s future plans.

All this makes managing CACs and CABs (Customer Advisory Council, Customer Advisory Board) a little tricky. Some of the feedback should certainly be taken into account, much of it cannot. That decision will in and of itself constitute a message to certain customers and that may complicate the management of the relationship. On the other hand, when operating in micro-segments, a small group of customers may constitute the best intelligence there is.

There are some interesting apparent counter-examples to this entire idea. Members of Japanese industrial groups typically provide very vigorous feedback to their suppliers, who usually follow it. The buyer’s continuous pressure is one of the factors that has led to the high quality of Japanese products. But, this example is more indicative of a concerted effort by a network of suppliers to continuously improve quality, rather than pointing to the ability to make crucial strategic choices regarding which customers to target.  (The top export-oriented Japanese companies actually managed to do both successfully for a long time).

Bottom line: a company’s management earns its keep when it forges and articulates a Vision that attracts customers and partners, and energizes employees. There are few more interesting endeavors.

As such, the CTA generates as much passion from people in the revenue generation functions as almost any other single component of a customer-facing deliverable. Actually, everyone in the company has an opinion for a CTA, not unlike the flurry of suggestions elicited by the choice of the website’s color scheme.

There are simple rules to follow to maximize the effectiveness of CTAs in email, direct mail, web pages, etc:

(1) Tell prospects what action you want them to take. Prospects may exhibit general interest without knowing how to engage with the company. That is why directly telling them what to do is effective and required.

(2) Make the request simple. The KISS principle rules here: the drop-off in response is severe if the requested action is not crystal clear.

(3) Tell prospects the benefits of performing the action. The pay-off for following instructions should also be clear.

(4) Impart a sense of urgency. Adding an incentive to act with a time bomb of some sort boosts effectiveness.

(5) Make the CTA graphically attractive as well as suitable for the context. An attention-grabbing CTA may not be good on forums where participants often bristle at “commercial” presence but will be great on emails and web pages.

While a good CTA is important, it remains the tip of the iceberg. A search for  an effective CTA should not be tortuous. Actually, the fact that a lead generation team may have trouble coming up with CTAs that yield good leads may be symptomatic of deeper problems.  A good value proposition (VP) shows how your offering solves a problem for its target segment. Conversely, a good CTA communicates to the prospect an action that puts him on the road to solving his problem. Because CTAs are just one of the cogs in the mechanics of lead conversion, they ultimately can’t compensate for an inadequate VP.

The power of the CTA ultimately does not reside in bright colors, clever placement on the web page, or a looming expiration date. All those are necessary and effective promotional block-and-tackle tools.  When the benefits designed in the offering naturally point to what prospects  are interested in, there should be no difficulty in coming up with a good CTA.