Collecting brings objects overload – information overload

People like to collect objects
In most cases collectionners gather so much stuff the number of products becomes overwhelming. The objects collected aren’t used.

Companies like to collect data
Similarly companies like to register data about their events, statuses, customers and leads. Meticulously every piece of data has to be written down or entered in a software system for one reason or another.
Production data, customer data, lead data, product data, employee data, …
Companies collect so much data that they have not enough analysts to use or to analyze all the numbers.

Large companies can buy expert systems to crunch the numbers according to pre-programmed rules and could find trends or anomalies. Pre-programmed rules will only generate findings within the rules defined. These systems will not indicate new trends or disruptions.

The collecting problems
Problems with collected items are:
- The freshness
- Too much of the same
- No use but collecting itself

Further problems with data are:
- The freshness
- The level of detail over time
- The method for measuring should remain the same
These problems will make analyzes and conclusions even more difficult to achieve.

Still most of all the registered data rests useless just like the objects in a collection.

The usefulness of data

The usefulness of all this registered data becomes questionable as the projections into the future are based upon:
- A subset of all of the data
- An extrapolation of the current data

People in companies seem to have a tendency to register all information too, just like collectionners without any real purpose or benefit.

The Marketing data dilemma

Departments like production or human resources have the advantage of having all data within their own department.
Marketing has the additional problem of requiring data from many different sources internally and externally:
- Internally: website analytics, campaign data, event data, leads generated, appointments made, invoices printed, revenue.
- Externally: market data, competitor data, macro economic data
The marketing department has to cope with the problem of collecting and aggregating the data, which makes the analysis even more difficult due to the inconsistency and the overload of the data.

Of course if a company doesn’t register and measure, it will know less or very little.
The question is if all this collected data really needs to be registered.
What is the cost of all this registration and keeping the files?

What shouldn’t be collected in your company ?

Conversation marketing versus interruption marketing

The managers, influencers, decision makers and purchasers have adopted the Internet for searching products, collecting information and even asking questions on business forums or LinkedIn, ecademy, Xing, Viadeo and similar websites. Their use of the Internet has become common for them.
They use the Internet even as a conversation: hence conversation marketing.

On the other hand the advertisers went on with their interruption marketing and have even increased this by sending out ever more email campaigns.
Corporations are still using one-way communications causing lack of interest of the buyer.

The probable buyers stand no chance for a conversation or have no communications channel for addressing the corporations except by sending an inquiry email. Something most people avoid due to the fact that any email address given will likely generate a stream of emails and newsletters and cold calls from a sales rep.

There is apparently no dialog between the probable buyer and the company advertising and promoting their products and solutions.

Time to catch up

It is time for corporations to catch up with their buyers and give them a channel for communication and if possible a channel for conversation.
Companies could provide for a platform on their website or a company or product page on Facebook to ignite the conversation. However finding the Facebook page might require just too much effort.

A first step in the direction could be done by installing a feedback or suggestion button like UserVoice, GetSatisfaction, YouSuggest, Suggestionbox, Aleveo, CrowdSound or Grupthink.
Although these services are intended for consumer websites, they can be as effective on business websites.

An example of such an implementation on a B2B website can be found here collecting the input from visitors and potential customers in order to improve the service.

The era of interruption marketing is over, time for inbound marketing and conversation marketing in order to solve the disconnect between interested or probable buyers and corporations.

How is your company going to solve the disconnect with your customers?

The good intentions of a partnership

Partnerships are very loose agreements.
Even if there is a commitment from both and if there is a legally binding document there are no efforts that can be imposed from one party to another.

One or more people from each company agree to partner for presenting a combined solution in order to develop the market. In most cases each of the parties involved see a benefit in this partnership.
In some cases the partnership manager was eager to sign another partnership as his bonus is depending on the number of partnerships signed each quarter.

The reality business test

After the great announcement and enthusiasm with the press conference, press release and interviews, the partnerships needs to be tested to the real world: the real business case.
When a partnership comes to the execution phase other people become involved, who might not see or perceive the same benefit or any benefit for this collaboration: marketing and sales.

Marketing in partnership

Marketing needs to promote a solution that is different from the current family of solutions. Different product – hence different market or market approach.
Marketing needs to have the required budget to afford spending time and money on the combined solution.
At the same time the marketing departments of each of the partners need to agree about method reach, spending amounts, channels used, media used, type of advertising.
Promoting the partnership solution needs collaboration of marketing having different opinions of methods used and budgets.
Partnerships overlook the fact the marketign departments need to co-operate and collaborate in order to spend the money efficiently.
Who decides what ?

Sales in partnership

The salesmen might not be interested as:
- Their bonus system or commission system doesn’t include the partnership offering or doesn’t include adequately the combined solution.
- He doesn’t find it interesting
- Has the perception his market is not ready for the new solution

Salesmen could just consider the partnership as a waste of time as it requires to:
- Learning about the combined solution
- Explaining the benefits to the customers: more cumbersome than without partnership
- Sell the solution of the partner: what about the commission on that solution?
- Take the risk of selling third party products or solutions: unknown territory = risky business
- Manage the problems of the implementation or deployment of the combined solution
- Have a support team that supports the combined product as one

All this while they could have been generating leads and sell the company products or solutions having clearly defined targets and commissions in a known market.

Sales can make efforts to address the market and find potential customers, but once into the negotiation phase, the salesman of the partnership will step in and can deviate and steer away the deal away from the combined product.
The salesmen need to trust each other for not stealing the leads and customers.

Partnerships prerequisites

Although many partnerships start with good intentions, most will fail during the execution.
Make sure the combined solution or partnership:
- Has a significant potential market
- Can be supported by both marketing departments
- Agrees on the marketing budgets upfront
- Is part of the commission scheme for sales
- Makes life of the salesmen easier not more complex
- Is fully tested and supported in order not to waste time of the salesman
- Has build-in systems to avoid lead and customer stealing

It is rare that a partnership actually works out for both parties involved as most companies see a partnership a method to sell their products or solutions through the channels of the partner with or without the partners’ products or solutions.
That’s why most partnerships are a fraud as the goal is not to sell the combined product but more of their own getting easy access to the customers and lead generation of the partner company.

How many of your partnerships have ever been successful ?

Money used to be the currency for marketing.
It used to be so simple:
- Spend a lot of money on creation of advertising and placement
- Get a lot of interest (leads or branding) in return

Digital content is disruptive

As the Internet, the recording and creation technology and the digitalization of arts and content have lowered the barrier to entry, money is no longer the currency for marketing.

More than ever before many people are able to create content which can be remarkable, unique, interesting or disruptive.
The competition for the audience with content has become omnipresent.

Marketing is being challenged by many competitors in content as spending large amounts of money on an advertising campaign is no longer a guarantee for success.
Content has become the key for success instead of money.
Content needs to be imagined and created – something money still can buy but money is not a requirement.
Good or remarkable content is not always related to the amount of money spend.

Content as currency

Each day the audience or the public has a limited amount of time to consume content. The content “buys” the audience as it gets their attention.
In this way digital content has become the currency for marketing too:
- To sell tickets at a price
- To promote products or services instead of advertising
- To convince or persuade people about political or social views
The better or more remarkable your content is, the more interest it will get.
The more leads it will generate or branding awareness it will build.

If your company creates and distributes good, remarkable and quality content, then chances are the information about products or solutions will spread far. Reaping big benefits.

If your company has created average content, even spending large amounts of money on the distribution (advertising campaign) will not have the same reach compared to great or remarkable content.

Money is no longer the currency for marketing.

How imaginative and creative are your marketing people?
Or is your marketing capable of hiring an agency that has imagination and creativity?

If a business is emerging the complete service is supplied by one company.
From conception, design, development, production, marketing, selling, invoicing and support.

Once the business becomes mature the functions are segregated and performed by different companies:
- The imaginators: define the products or services – conception
- The designers: give the looks, functionality of products
- The developers: create the products
- The industrializors: take a product into production
- The manufacturers: producing the products
- The marketers: bringing a product to the market and let the market know
- The lead generators: call centers or email marketing services generating leads
- The sales: selling and closing deals
- The after sales: the after sales service

The company defines and creates the new products.
The manufacturing is done by a subcontractor in Asia.
The company promotes the products using marketing.
Distributors import the products into their country.
Resellers sell the products to shops, who on their term sell it to end-users.

Sales is split up between those who sell from one business to another (B2B) and those who actually sell to the end-users (B2C or B2B).
Hence the change of nature of sales: from really selling to customer over to partnerships and business development. This also changes the nature of the negotiations.

Blogging from cottage industry to real business

For example the business of blogging is still not mature as one man will still imagine and write the blog posts, edit it, then market and distribute it in order to collect money in the end (online advertising or generate interest for their business)

The first signs of evolution are present as major blog sites (Huffington Post, TechCrunch, Gizmodo, Mashable!, Endgadget) are appearing who employ several writers and editors, but also marketers and people selling advertising.

Just like newspapers the blogs are becoming content companies having writers under contract. History repeats itself.

Signs of very matured business

In all business specialization comes into existence once the business matures.

Only if the market is very matured and the products have become almost a commodity, then the top 3-5 large brands start to skip intermediate steps of distribution and reselling as they:
- Use local self-employed representatives as a first step
- Open local offices for distributing to resellers or customers
- Open shops in the main streets (like Apple, Nokia, Zara, H&M).

in this case the big brand name are facing the end-users again giving them the benefit of direct customer contact and feedback.
But also all the hassle of going local (employees) and the problems of logistics.

The joy in emerging business

If you are in an emerging business, you still can have the joy and all the problems of:
- Direct customer contact
- Complete control over the total chain of design , production to distribution and sales.

How mature is your business?
Have the big brands already local presence?

When business is going fine or booming, it is due to the vision and capacities of management as salesmen are only the executors of the plans of management.

When business is crap, it is because of the market or the salesmen who don’t perform.

Booming business

In reality business success is never because of management alone.
But due to the market, the efforts of marketing, sales and even development or production. The entire chain from planning, design, developing, marketing, production, sales and after sales service needs to play in tune.
Management gets big bonuses and salesmen get their well deserved commissions.

Revenue is low

On the other hand when business is not running smoothly, lacking orders and leads there can be many reasons why for this:
- Market is bad
- Wrong products for the market
- Design failures
- Development issues
- Production problems
- Marketing insufficiency
- Sales not able to sell the products for many reasons: availability, pricing

Management should have foreseen all of this or at least most of this.
Thus management is mainly to blame. marketing can only promote the products decided by management and the salesmen can only try to sell those products. Salesmen are at the end of the chain without much control or input at the beginning of the process.

As management runs the company they will blame everybody instead of themselves.
Management gets no or minimal bonuses and the salesmen have little or no commissions.

Who’s to blame? Management

When business is fine management consider themselves as the Masters of the Universe.

When business is lagging behind plans and performing under budgets, everybody else is blamed by management.

However it should be the reverse:
- Business is great when all work together smoothly producing the products in demand. Management and salesmen should get their bonuses and commissions.

- Business is problematic when management got it all wrong and executes it all wrong. Maybe management should repay their previously earned fat bonuses to distribute it to the salesmen in order to keep them motivated to sell as they have been put up with these hard to sell products.
Without motivated salesmen, the business will drop even further.

Revenue interruptus

When selling products or solutions a salesman has one shot at getting big revenue from a customer. One shot at getting a commission.
Then the salesman has to wait until the expected life-time comes to an end before having a second chance to make any revenue. The risk of not getting the second sale is real.
The exceptions to this case are customers that have a fast expanding or growing business making them buy more appliances, devices or software. Only then there is more commission for the salesman.
Still it is revenue interruptus.

Bridging: maintenance and upgrades

In order to bridge the intermittent sales over the life-time span of the product the maintenance concept was introduced.
By selling the fear of not getting the service required in time, maintenance contracts were presented as the solution for business or production continuity. Reducing the perceived risk for the customer, while generating more revenue for the vendor and commissions for the salesman.

Clever businessmen went even further by introducing upgrades: especially in the software business. As a company you shouldn’t run behind, but keep up-to-date with the ever evolving technology. The more upgrades the more revenue.
In some cases upgrade contracts were sold in combination with maintenance contracts.

Avoiding the risk at the decision point: streaming revenue

Still the big lump sum in revenue is when a new appliance, device or software gets bought. However there is a risk involved at the decision point: the risk of the customer deciding to buy from a competitor. The more the market matures, the more the customers can switch between competitors.
As with any business the goal is to make profit at the least risk for both vendor and customer.

Newspapers have understood this a long time ago: instead of selling one newspaper at a time, subscriptions were introduced in order to smooth the printing numbers and avoid risks.
Other businesses have adopted subscriptions too.

As software and hardware as services are moving into the cloud space: the number of appliances, devices and software are no longer the unit of measurement for the revenue.
Time and the number of users have become the units of measurement for these investment goods too.

As time is a continuum, the revenue becomes also a continuous stream: subscription.

Benefits of subscription

Due to the ongoing service process there is no decision point at the end of the life-span of an appliance, device or software as the invoices have a steady flow (every month).
The advantage an benefit is that there is no catalyst in the process that induces a review or a decision as the service just continuous.
Additionally the resistance to change will keep the invoice flow streaming over a long time – if the supplier doesn’t screw up.

Additionally subscriptions are paid in advance of the supply of the service, whereas devices, appliances and software will bring revenue after delivery. Prepayment is always beneficial as the main risk of the vendor gets eliminated: getting paid.

The income has changed from an intermittent process to a steady stream of income for both the company and the salesman. Decreasing the risk for both.

Can your business become subscription based?
What are the technology hurdles?
What are the business hurdles?

The tale of a market leader encountering open standards

This is a tale of a market leader who since many years made good sales and profit in a market niche using proprietary technology.
Management believed they were the ‘Masters of the Universe’ having high margins and ever growing sales volumes.

As the news of the ever increasing profits spread and the growth of the market had become evident as it was no longer a niche market, more companies became interested to become a supplier for this expanding market.

Due to the fact only proprietary solutions were available to the market, an industry organization or a competitor gathered a several vendors in order to define open standards.
As one of the market leaders the company was invited to participate, however management decided not to participate as the standardization didn’t seem to bring any immediate benefit but was considered as a waste of time. Management estimated it was certainly no threat for business of the company.
They considered themselves as the people with vision who had spotted the market long before (in reality it was probably just a lucky shot).

Slowly the open standards gained field as more vendors adopted them. Even the company enabled the open standard on some of its’ products in order to be able to present it to their customers but without the intention selling it.

Over time the open standard matured, got more features and gained field in the market. It became a real competition to the products or solutions of the company.
Customers preferred the having the freedom of choice and switching of vendors at almost no cost.

Open standards vs legacy technology

Once a technology is available as open standard the barrier to enter the market is lowered significantly as almost any vendor in the world can propose the solution (even Chinese manufacturers).

The sole differentiators that your company still can use for selling the legacy technology based products are:
- The installed base: all the references acquired since many years
- The quality of products and services
- The presence in local markets (if this has been achieved)

It will become hard to explain the premium price to be paid for the legacy technology as the open standards can rely upon components available on a large scale at a lower price and hardly any investment on development to be depreciated.

Proprietary or legacy technology is only possible in emerging or niche markets as innovation still counts.
Once a market grows and becomes significant in size, open standards are introduced, then you have the choice:
- Embrace open standards
- Look for a different market or a different solution as prices and margins will only decrease.
Your competitors will be lean and mean as they never had big margins on these products.

Do you sell solutions based on proprietary technology or open standards?

Except for the big corporations sales and marketing departments are managed by one person: the VP Sales and Marketing.

However it is unlikely this is really feasible:
- As VP Sales he needs to generate sales: having a short term view – easy to measure
- As VP Marketing he needs to plan events, efforts and investments all with a long term view and the results are hard to measure.

Sales: the Executors

In order to keep the company running th pressure is on sales and generating revenue. Hence the VP Sales and Marketing will invest most of his time in sales as selling drives the company.

- Deal flow and closing sales is now.
- Sales people have mainly one to one verbal communicators.
- Sales will detect demand and sell the solutions.
- Sales is easy to measure in the accounting dept using the invoices.
- Aggregated analytics are not required as each case is different.
- Sales are the executors of existing opportunities.

Marketing: the Invaders

Due to the fact Marketing:
- Has less pressure for delivering instant results
- Requires a longer term to see any return on investment
Marketing will get less attention of the VP Marketing & Sales.

- Marketing is for the future revenue.
- Marketing is one to many using written or visual communications.
- Marketing needs to create demand.
- Marketing requires analytics to measure its’ effectiveness.
- Marketing can be seen as the invaders into new territories.

Short term vs long term

The mission of a VP Sales & Marketing is impossible as he needs to split up his time between both:
- Sales giving almost immediate return: Action – Result.
- Marketing efforts and investments having an uncertain long term return: Action – Patience.
It is obvious he will have a tendency to focus primarily on selling as company management demands it.

Moreover in most cases the VP Sales & Marketing has previously been in sales not in marketing, hence their nature and attitude is more fast paced not matching the required nature of patience for building slowly a brand or awareness which is required for marketing.

Having one person as VP Sales and Marketing is probably not such good idea: he has a Mission Impossible to achieve.

If the correlation between:
- The amount of time and effort spend by salesmen into the CRM
- The achieved sales level
is negative (the more time on the CRM – the less sales) then the company has a serious problem.

It means that salesmen are wasting their time by entering data into the CRM and have little or no return on their efforts. They perform administrative tasks instead of finding suspects, qualifying leads, following-up on prospects and closing deals.

This becomes especially apparent if the salesman with the highest revenue is neglecting all requirements imposed by management concerning the CRM as he spends no time on it. The CRM has really becomes questionable.

CRM administration vs selling

In the worst case the commission scheme includes a measurement of the administrative activities or tasks for the CRM.

As a sales manager you should have a metric indicating how much time salesmen are spending on the CRM compared to the time on leads and customers.

A CRM can become a self-fulfilling prophecy, allowing generating all possible sales and marketing management reports, that could just kill sales.

Sales people want to hunt for customers, nurture accounts and leads and sell.
They don’t want to do administrative tasks even if their commission scheme imposes CRM administration.

Revenue counts – not CRM administration and reports

The goal for any company is revenue that is generated by sales people. When sales people are busy with administration it is likely there will be less sales efforts and could even demotivate the salesmen.
Moreover if salesmen would have liked administration they would all have become accountants.

A company can have the best implemented CRM that generates the best sales and marketing management reports, but these won’t bring sales.

Does your commission scheme contains CRM administration as a parameter ?