Those of us that are in the business of selling products and services to other businesses (B2B) know full well that traditional consumer marketing does not work for our business. There is no better way to waste your marketing money than on traditional advertising on radio, television or newspapers.

B2B marketers prefer to spend their money on more traditional, organic methods, but with an increasing budget directed to digital and e-mail marketing. In fact, according to a Forrester Research study highlighted by e-Marketer (B2B Marketers Shift Budgets to Online), in-person event marketing such as tradeshow participation is the number one preferred tactic of B2B marketers.

Although TV is listed as the 5^th most popular tactic, I’m sure you’d find that much of that TV advertising is targeted cable TV advertising on specialty channels such as the Money channel or MSNBC.

Of particular interest to digital strategists such as myself is that no digital marketing makes it into the top 5 tactics. After the military and education, B2B were the first early adapters of digital marketing and electronic sales. Electronic Data Interchange (EDI) was being used by many B2B companies before many of us had even heard of the Internet. Despite this early mover advantage into the digital world, B2B marketers have not discounted more traditional methods such as face-to-face and PR.

The good news for digital media buyers and marketers is that digital marketing –such as e-mail marketing and paid search – is being used more and more often by B2B companies and is projected to be the number two tactic of choice by 2008.

ANALYSIS

Traditional, organic marketing such as in-person events and public relations works best for many B2B organizations. Digital marketing, particularly targeted permission marketing (see Web marketing (part III): E-mail marketing ), is becoming more effective and will continue to garner more and more of the marketing pie. Increases in digital marketing budgets will continue to be at the expense of less successful media such as newspapers, printed newsletters and radio.

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Web marketing (part III): E-mail marketing

If you can’t beat ‘em, join ‘em.

If only the record companies had thought this way when Napster first hit the scene instead of spending tens of millions of dollars in legal fees and associated marketing trying to fight downloadable music. Well, that’s mostly in the past now as the labels have come to learn the power of e-commerce, thanks in-part to iTunes.

A remarkable new study released this week by NPD Group found that iTunes has begun to displace retail chains in music sales. In fact, people are buying more music from Apple’s iTunes than from big chains such as Tower Records and Borders. Wow.

In Q3, the top 10 retailers were as follows (note: numbers within parentheses denote retailer unit-sales position in Q3 2004):

1. Wal-Mart (1)
2. Best Buy (2)
3. Target (3)
4. Amazon.com (4)
5. FYE (10)
6. CircuitCity (Tied for 5)
7. Apple\iTunes (14)
8. Tower Records (Tied for 7)
9. Sam Goody (Tied for 5)
10. Borders (9)

Despite the fact that iTunes has only been around for a couple of years, there are only six retailers that sell more music.

“The ongoing and growing popularity of Apple’s iTunes Music Store now positions the company as a leading music retailer, and continues to legitimize legal digital music retailing,” said Russ Crupnick, music and movies industry analyst for The NPD Group. “With the growing interest in digital music, forecasts of more iPod demand this holiday, plus the stocking-stuffer appeal of iTunes gift cards, we can expect Apple to increase its share even more by year’s end.”

If you’ve not yet identified what online threats could supplant your traditional business then you’d better do your homework. I guarantee you that Towers Records did not formally take into account three years ago the threat that iTunes has become today. In only a couple of years iTunes has managed to build a business that once took decades to build.

Internet speed waits for few.

New research reports that consumers are 50 percent more likely to be influenced by word-of-mouth recommendations from peers than by radio/TV ads. Growing confidence in consumer-generated-media (CGM) creates a strong impetus for marketers to influence this new media, and a recent survey from Bain & Company provides an excellent suggestion about how to start: keep your customers happy.

The “2005 Consumer-Generated Media (CGM) and Engagement Study” a new study of consumer behavior by Intelliseek Inc., contains interesting findings on the interaction between old and new media and the behaviour of Internet-savvy consumers:

·        “Active ad skippers” are 25 percent more likely to create and respond to Internet message boards, forums and blogs.

·        Word-of-mouth behavior among “familiars” trumps all forms of advertising and is more trusted than news or “expert commentary.”

·        Consumers are on track to post close to 2 billion comments on the Internet by the end of 2005.

While it’s critical for marketers to ramp up their knowledge of the blogosophere and develop strategies for managing their brand in this space, they can’t take ignore the source of the positive or negative comments that will be posted: the customer experience.

The Bain & Company survey indicates companies need to be more honest with themselves about their performance in this area. In a survey of 362 firms, the consulting company found that 80 percent believed they delivered a superior experience to their customers. But when they asked customers about their own perceptions, they found that they rated only 8 percent of companies as truly delivering a superior experience.

Bain went on to determine what criteria put the top performers into the elite eight percent, finding that they take a broad view of the customer experience and pursue three imperatives simultaneously:

1. They design the right offers and experiences for the right customers.
2. They deliver these propositions by focusing the entire company on them with an emphasis on cross-functional collaboration.
3. They develop their capabilities to please customers again and again—by such means as revamping the planning process, training people in how to create new customer propositions, and establishing direct accountability for the customer experience.

When was the last time you used “salesperson” and “Internet strategy” in the same sentence? If you did, the sentence probably also included either the phrase “reduce costs by using fewer,” or the verb “avoid.”

Salespeople are much maligned. Customers resent their pressure tactics, executives often question their commission cheques and the Kids in the Hall made them the subject of plunger jokes.

Worst of all, marketing strategists often ignore them, launching expensive campaigns that always factor in the Internet but frequently neglect the sales force. And that leaves the sales team still on the street, representing the company’s product and brand. But doing it badly and with poor information.

Tim Riesterer, in an article for MarketingProfs, describes this space as “no brands land”: the gap that exists between the 30,000-foot ad campaign and the 3.5-foot level, which is where the company’s sales team is persuading prospects to make a decision. Only they might persuade a customer to look elsewhere because their information and positioning is inconsistent with the company’s web site. Which the customer checked a few minutes prior to meeting with the sales person.

As Riesterer points out, many companies—especially those in complex b2b selling environments—have embraced consultative selling methodologies to differentiate themselves in a world of product parity. He quotes Evan Hirsh, author of Channel Champions, who writes that: “From these [sales] channels flow customer satisfaction, market share, revenue gains and profitability.” However, they have not translated the high level positioning on the web site into street-level value propositions and solution-messaging that align with the sales team’s training.

The effectiveness of these solution selling techniques can be boiled down to access to up-to-date information and productive use of sales time. In other words, sales effectiveness screams intranet.

That point has not been lost on CMS vendors or intranet thought leaders. For example, Prescient Digital Media's President, Toby Ward, wrote in a posting called “The intranet bolsters sales” in Prescient's companion blog that: “While there is a certain amount of guesswork involved it is easy to see that the intranet can have a positive effect on the bottom line and impact an organization’s sales.”

Which might explain why too few companies talk about their Internet strategy and their sales force effectiveness in the same conversation. Not only do marketers often create the strategy without considering the sales team, the methodology for developing an effective intranet strategy—which can be ideal for creating an effective sales intranet to complement an on-line presence—is often created by the HR or communications departments, who work in a different silo to sales and marketing.

So the next time you’re developing an Internet strategy intended to boost sales revenue, make sure you think about the sales team that is responsible for delivering those numbers. And if you need any help in determining how to help them manage information effectively, ask Communications how they developed their intranet plan.

You’d be hard pressed to find a better win-win-win relationship between consumers, an industry and technology than the travel market post-Internet adoption.

Of course, these gains could only be accomplished after the players got their strategy right.

There can be no doubt that the Internet is the technological backbone of the travel industry. According to Claria Corporation’s Feedback Research Division:

§         88 percent of consumers purchased or plan to purchase an airline ticket online, up from 50 percent in 2004.

§         Online purchases of hotel accommodations also increased in this year to 52 percent, up from 40 percent in 2004.

A quick examination suggests that the Internet and travel are nearly as good a combination as a pina colada and a palm tree:

• Tourism is an information intensive industry. The Internet provides technology that enables constant up-dating of information based on customer input, changes in product availability and price changes.
• Tourists cannot really assess the quality of the products or services they are buying until they arrive at their destination. Trust and proof statements are critical for delivering the comfort level required to commit an often significant percentage of household income to a purchase. The Internet delivers technology that makes it easy to compare choices, delivers immediate confirmation and documentation of reservations and builds a relationship between the buyer and seller.
• Tourists are strongly motivated by price. The Internet enables electronic order processing that dramatically reduces sales costs; automation scales back skilled labour costs; it disintermediates several layers of middle man; and it reduces the cost of physical space.

The Financial Times provides a number of examples of how the players have all won as a result:

• Consumers: Not only has informed choice risen steeply and costs declined, holiday travelers are enjoying tremendous flexibility: holidaymakers used to be restricted to 7- or 14-day holiday periods; now the average length of stay is 4.8 days.
• The industry: despite tremendous challenges, the U.S. Internet travel industry grew from US$5 billion in sales in 1999 to US$20 billion in 2003, a number that is still growing dramatically.

So what were the winning strategies?

• Rethinking the product offering. With consumers using the Internet to buy flights, accommodation and rental cares separately rather than in packages, tour operators responded by either diversifying into specialists holidays and upscale breaks, or creating sites that allowed customers to choose component parts.
• Creating an Internet-specific business model. Lastminute.com, Expedia and Travelocity buy travel products  and use the Internet to find buyers.
• Dramatically increasing efficiency. The winners have learned to process large numbers of orders and inquiries with less human intervention. Not only does this approach drive cost out of the system, it allows them to collect extensive customer data which they utilize to create a better product.

I hate spam. You hate spam. We all hate spam. Yet, just like negative political advertising during the heat of a hot campaign, it works brilliantly.

In fact, except for traditional direct marketing, there is no single more effective marketing tool.

Here are some of the numbers:

Ø       Only telemarketing has a higher ROI than e-mail (IAB)

Ø       In Q2 2005, the open rate fell to 23.6 per cent versus 2004 (DoubleClick)

Ø       Bounce rates, which were at an all time low at 7.9 percent, declined 25 per cent from 2004 rate (10.5 percent) (DoubleClick)

Ø       Orders per e-mail delivered were 0.35 percent in the fourth quarter of 2004, an all-time high and much higher than the previous records - 0.30 percent (DoubleClick – based on  2.5 billion e-mail sent)

That last number is very telling. It means there’s a sale, on average, for every 300 e-mail solicitations sent. While it depends on how you do it, the cost of sending 300 e-mail is next to nothing. And this is why e-mail marketing continues to be wildly successful despite the stigma against spam.

To be honest, the real winners are not those marketers that are spamming (though some are wildly successful), but those that undertake permission marketing.

Permission Marketing