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| e-Xpertise in Industry Issue #9 February 2001 | ||
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CONTENTS: Feature Article : Let field marketing stretch your brand's value Hot Topic : Pricing for B2B transactions Book Review : Building Brandwidth From the Editor...... Welcome to the first edition of 2001. We have a new editor but the format and the editorial values are unchanged. This is a newsletter for senior management, as well as sales and marketing professionals, working in the IT Industry. Our aim is to bring you ideas and content that broaden your outlook and are challenging or stimulating. We keep the copy short and concentrate on content rather than hype. We don’t fill the page with links or paint your screen with fancy graphics. We owe no allegiance to any third party and guard our independence jealously. If you like e-Xpertise in Industry please send a copy to colleagues so that they can choose to subscribe. If there are things you don’t like or which you believe could be improved please let me know. You can also send me your own contributions. Bob Brown In this Issue . . . . . Increased Centralisation of Marketing – Good news for consistent messaging or the thin end of the wedge for local marketing teams? In this issue Mike Evans will analyse the motivation for the large scale swing we have observed over the last six months. More of the marketing budget is being spent on getting the corporate web site right up to date, and then keeping it that way while local initiatives have become the poor relations. We try to answer the question “Is this the right way to go?” Our 'Hot Topic' this month is about Pricing, specifically pricing for B2B transactions. Setting the 'right' price is a crucial part of Marketing's task. We highlight some of the questions that need to be answered when setting prices for new business models. Brand is a very overworked and abused word right now. We review a book with it's own spin on the subject. e-Xpertise in Industry is sent only to subscribers. Removal instructions are at the end of this message. Please feel free to forward this newsletter to any of your associates who might benefit from this information. If you are receiving this issue as a forward, and would like to get your own free subscription, please see subscription information at the end of this message. Please Note: We do not make our mailing list publicly accessible. We respect your privacy as our subscribers. Quote for today : "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!" Lewis Carroll, Through the Looking-Glass Let field marketing stretch your brand's value In the last few months, we have received a steady stream of messages from field marketing managers to say that their positions have been eliminated. Fortunately, most of them have found other jobs quite easily. This is not new. In previous years we heard about redundancies from downturns in business, corporate acquisitions, company politics, etc. However, this year the main reason has changed. These eliminations were all about re-engineering the marketing process and usually involved centralisation at Inter-Galactic HQ. At first sight, the reason is obvious. As President Gore might have said “It’s the web, stupid”. The argument is that suppliers of IT to industry are spending large fortunes to create web sites. These provide cohesive and focused messages that build brand values and define the offer in terms of product features, functions and benefits. This money has to come from somewhere. It is a better return on marketing investment than decentralised marketing. Field marketing is the fall guy. Cambashi don’t think this analysis is right. We see the web as only one element in the marketing mix. It needs to be judged, like all marketing investments, in terms of what it does for the bottom line. The web can generate more top line revenue by selling to customers we could not otherwise reach. It certainly will speed the flow of information to the point of sale. It can reduce costs in terms of cutting out wasted steps in the sales and marketing process. As far as we can see there are very few IT suppliers who have really re-engineered their sales and marketing process. Where they have undertaken BPR, it often turns out that they are implementing blindly the workflow and processes of some CRM or SFA solution. We don’t see them following the discipline of BPR to analyse their existing go-to-market and engagement models, consider what-if scenarios and install better practices using new technology. In particular we don’t see them interviewing the field sales and marketing force in order to understand what is really required today to win an order. Of course, part of the problem may be internal communications. Sales representatives always tell management the reasons why they can’t sell. However, marketing people expect management to read the copy and work out for themselves why marketing improves profits. Next year, we expect a backlash. Peter Marks of Design Insight pointed out at last years COFES conference that users buying criteria are varied and the weightings complex. In a particular transaction there will be a combination of intangible and tangible values. Most of the intangible values have to be added locally.
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Marketing messages position the offer, especially its service elements, in the context of the prospects’ regional and industry branch culture. These Chinese Whispers stretch brand values from the lowest common denominator to encompass the totality of potential users. It can’t be done automatically. Even with web personalisation software, IT suppliers don’t have the intellectual content to populate their sites with appropriate collateral. We support re-engineering marketing. It can often be improved to support sales more effectively. However, we recommend that best practice is to implement change with local content and metrics applied to each stage in the redefined sales and marketing process. We do not favour one scheme regardless of territory and industry branch. Mike Evans Those of you who'd like to hear Mike
Evans and others talk further on this subject should mark April
4th in your diary - the date of this year's Cambashi Seminar. It
takes the centralisation of marketing as it's main theme and is
entitled "Chinese Whispers win Marketing Marathons". Details
and registration information can be found here. And my price to you, Sir is ... B2B must translate the old sales patter into the new digital environment. And when you consider what a good trader did in striking a price, you realise that translating those skills is going to be quite a job. First, the customer must be recognised. That's the log on, of course. Without visual verification, there's now an additional aspect of security. Not only must the transaction be secure, but the price may well be confidential too. Then customer must be set in context: what company does he or she work for? Does the company have an account? Is the customer an authorised purchaser for that company? What is his or her purchase ceiling? Is the company's current credit status within agreed levels? What was agreed the discount structure? How much has the company spent to date? How does that compare with the budget on which the discounts were agreed? The product may also influence price. Is there a volume discount? An end-of-line discount? Or a special bundle price. How should product discounts interact with customer discounts? Are they additive? Multiplicative? Perhaps they cannot be combined at all. Finally, a price must have a period of validity. It may apply to a particular transaction and lapse as soon as the customer logs off or is timed out. If that is the case, then it is important that printed, or printable, estimates do not compromise this flexibility. Random pricing is probably the most controversial new e-commerce practice. By adding a degree of random variability and logging corresponding success rates, it's possible to look for the price that delivers greatest total profit. Although it's hardly a new phenomenon - it's little more than haggling without the subsequent iteration - it has already caused customer outrage. This response is particularly significant, not because customers object to inconsistent pricing, - that's hardly surprising - but because they are able to detect and publish this practice. The technology that delivers an efficient e-marketplace may also be levelling it - to the customers' advantage? Ralph Seeley Building Brandwidth
: book review This is a manual for marketing in the Internet Age. I was tempted to say ‘this is just another manual for marketing in the Internet Age’ but that is being too dismissive. Both the authors have impressive credentials as practitioners of marketing and communications if the glowing biographies on the fly-cover are to be believed. I found the book rather disappointing but not for any single reason. It contains good ideas and advice and adds a further perspective to an interesting subject but it doesn’t push forward the boundaries in any real way. It falls into a depressingly large category of books that presumably aim to bring marketing wisdom to a much wider audience. In the process of popularisation the reader ends up with a long list of advice, no doubt perfectly sound, but the authors fail to provide a cognitive framework for Marketing Strategy in the Internet Age and there are inconsistencies and contradictions that irritate. Sergio Zyman’s the first volume ‘The End of Marketing as We Know It’ unfortunately passed me by. This second book does seem to rely fairly heavily on conventional marketing thinking which, given the title of author’s previous work seems a slight contradiction. I suppose second books are a bit like movie sequels only in this case it’s the publisher who is seeking to broaden his brand width! Bob Brown Cambashi researches best practice and assists IT suppliers in best practice implementation. For more information on Cambashi services please email info@cambashi.com e-Xpertise in Industry operates as an opt-in email. The opt-in policy means we never intentionally send any email to anyone who does not wish to receive it. To subscribe: send an email with the word "subscribe" in the subject line to : expertise@cambashi.com For removal : send an email with the word "remove" in the subject line to : expertise@cambashi.com © Copyright 2001 Cambashi Ltd
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