My PowerViews guest today is Rich Vancil, IDC Group Vice President for Executive Strategies. As a member of the Executive Advisory Group, he delivers CMO and Sales Advisory Services that provide senior technology marketing and sales executives with insights into how to improve productivity and efficiency in their organizations. Rich earned his MBA from Harvard Business School, and he’s twice been named to BtoB Magazine’s Top 100 Most Influential people.
Below, you can read highlights from our discussion or use the links to start the video from different parts of the conversation.
2012: Transformational Change, the New Buyer & Big Data
Click to start video at this point—Asked about what is happening or not happening in marketing and sales in 2012 that surprises him, Rich notes there’s been more transformational change in the past eight to twelve months than he’s seen in the previous nine years.
He adds that the major factor is the new buyer—empowered and smarter, in ways, than IT vendors—coming into provider organizations through a variety of digital and social pathways.
These new buyers leave in their wakes a large data trail of where they’ve come from and what they know already, and this behavior presents an opportunity for marketers to “capture all that big data, process it, analyze it, turn it into insights, and hopefully intercept that buyer.”
As a result of this behavior and the opportunity created by it, tech marketing and selling are going through a major transformation. Traditional marketing activity—like marketing collecting and turning over trade show business cards to sales—is gone, and organizations are forced to change their processes and integrate marketing automation tools to deal with the data issue.
Rich also notes challenges from “this stinky permanent recession that’s putting margin pressure on so many vendors.” A lot of organizational changes are characterized by new interactions between marketing and sales as the COO and the CFO are trying to make them more productive: “Typically marketing and sales have not been cooperatively productive, so we’re seeing more mashups between marketing and sales.”
Moving from Inbound vs. Outbound to Continuous Digital & Social Dialog
Click to start video at this point—In response to a question on inbound vs. outbound marketing, Rich says the idea of inbound vs. outbound is a little bit dated at this point as it implies separate asynchronous streams of communications. While marketing traditionally was inside out or from-us-to-them, Rich notes, “The world today is really more of a dialog and a communication which is what it needs to be.”
He characterizes this shift in the following ways:
- The new buyer wants education from vendors, as well as connections with peers and intelligent third parties.
- This implies a continuous dialog or conversation helping to guide that buyer to the right educational and information resources.
- Rather than thinking about it as separate inbound vs. outbound, think about it as a digital or social dialog that’s going to continue throughout the buying process from marketing activities through the selling activities.
The New Buyer Requires Rebalancing Marketing-to-Sales Budget Ratios
Click to start video at this point—Rich discusses the significant impact the new buyer will have on current marketing and sales budget allocations. He notes, “If you look at the typical SG&A or the typical marketing and selling cost envelope for a tech vendor, there is about four dollars spent in sales for every one dollar spent in marketing. And what the buyers tell us over and over again is, ‘Don’t sell so hard. I don’t want to be sold to.’”
He adds that buyers now prefer to be educated and informed rather than sold to, and this will impact how marketing and sales budgets will be rebalanced in the future: “I really think that, in the future, if you look at that cost envelope, it will look like a more even split of marketing and selling monies and activities.”
Historically, marketing in tech has not been as powerful as sales and has delivered rudimentary marcom functionality with PR, fact sheets and some product support. But Rich comments, “Marketing is going to be more important as time goes on” and “is truly going to come into its own in this digital area, and it’s going to happen so fast. The next one to three years is make or break time on this.”
Marketing Operations Should Be Tasked with Marketing Automation
Click to start video at this point—Regarding marketing automation and whether organizations are ready to deal with its complexities, Rich comments, “You can’t decide not to use marketing automation because, if you don’t, you’re not going to be in business. Tech marketers today and tomorrow are going to need to be great data masters and great technologists. There’s no question about that.”
Rich recommends that organizations struggling with marketing automation task it to a robust marketing operations staff. He comments they are seeing the marketing ops role grow and blossom: “At the typical large tech marketing organization, perhaps 6% or so of the staff hold the role of marketing operations.” These execs and individuals address areas like the following:
- Planning and budgeting
- Measurement, metrics and ROI
- Evaluation and deployment of marketing automation
- In the B2B realm, assuring marketing processes and marketing automation are connected to sales operations and sales automation/CRM systems.
Social Media Mantra: Listen First. Then Speak. Good things will happen.
Click to start video at this point—Asked about recent research reporting 84% of buyers use social media to monitor trends and stay connected, but only 18% use it to interact with vendors and make purchase decisions, Rich comments that he is hearing good B2B use cases based on listening.
He adds, “The best thing you can do as a CMO is to set up those social listening posts so that you’re listening to the dialog of your customers, how they talk, how they refer to your company, and the terms they use.”
He notes that Dell has applied social listening and discovered their customers use their products in ways that are different from how Dell markets them, so they now talk about their products in ways that customers want to talk about them.
He recommends that after you do listening, mount more overt and intentional outbound communications: “Put your voice into that. You really start that conversation with that prospect, and hopefully you steer them to you.”
Alignment: C-Level Stepping In & Operations Mashups
Click to start video at this point—Discussing marketing and sales alignment, Rich notes, “It’s not as positive as we’d like. We survey annually and ask marketers and sellers separately about their alignment sentiment. It’s basically been at a C minus level even in this environment. In tech, marketing and sales are often in their own galaxies. Sales is doing its thing and selling. Marketers are wearing the black turtlenecks, and sellers are in their white shirts. There is not a lot of great cooperation or alignment.”
But he immediately notes that margin pressure is forcing more organizational change. He points to the tech industry’s 40-year history from 1960 to 2000 of double digit growth rates. Today and for the future, tech is a 5% to 6% growth industry. As a result, the CEO and CFO look at non-cooperation and say, “You guys have got to figure this out because you’re spending together 12% to 15% to 20% or more of revenue. There are going to be friction and process problems between the two of you. So get it together.”
Among positive developments, Rich sees are organizational mashups: “I would say that, with about 25% of the major tech vendors, field marketing reports into sales—an organizational mashup that has been forced by the C-level.”
He notes they are also seeing a parallel to marketing ops on the sales side—sales operations. More frequently, both report to the same person and work on common process issues.
Advice to CMO for 2012: Focus on Sales Enablement Efficiencies
Click to start video at this point—In response to a CMO asking him for one area to focus on for the balance of 2012, Rich recommends sales enablement. He defines this as getting the right marketing content assets to the right seller at the right time in the right place in the right format to move an opportunity forward.
He notes that when they survey sellers on a hundred things marketing produces—like a data sheet, a webcast, a white paper, an event, etc.—sellers invariable say they use 15% to 20% of those things.
When marketing can stop producing the 70% or 80% of things that sales isn’t using, there are two major benefits. You’re saving money immediately, and you’re going to have fewer things for that sales person to have to sort through as he or she gets prepared for sales calls.
You can connect with Rich and learn more about his work at IDC via the following resources:
Rich’s Email Address: rvancil at idc dot com
Rich on Twitter: @richvancil
Rich’s IDC Profile: Rich Vancil Analyst Profile
Rich’s IDC Services: IDC CMO & Sales Advisory Services
The next PowerViews will be with Ann Handley of MarketingProfs. Stay Tuned.
By Dan McDade