Experiential marketing for enterprise software

Brian Sommer suggests that technology marketers should adopt the practices of consumer marketing and use ‘experiential’ marketing techniques -  Selling that Technology: Functions, Features & Fools.

I’m trying to imagine how an ERP vendor would approach this. What’s the experience of a sales order clerk capturing an order, or a production manager managing work-in-progress?

The issue is that they don’t make the buying decision. The only experience you would have to focus on it that of the CEO or CFO. And what would that be?

Mid-market ERP is regional

Reading bloggers and analysts reviews on ERP solutions sometimes makes me cringe. Often, these writers are US-based, and they seem to think that their experiences in the ERP industry, especially in the mid-market, can be extrapolated elsewhere in the world. I beg to differ.

An example of regional differences comes from a report by the Panorama Consulting Group, which shows that US and European mid-market companies are comfortable with an implementation period for, and an investment on an ERP system which, from this South African’s view, is extravagant.

One of the reasons that mid-market ERP vendors are regionally strong is because, for the mid-market, relevant customer references and industry knowledge in their specific area is important. A recent set of articles about Mistakes Sales People Make points out that creating credibility and lowering the customer’s view of your riskiness is a critical issue.

Another reason why I believe the ERP mid-market is regionalised is because of the markets and the requirements are different. It’s no point a big US software maker talking about their US or European sites to a South African or Indian business, because the worlds and the cultures are so different. This is where I think the ERP vendors should be taking lessons from the consumer packaged goods (CPG) companies.

The CPG companies often have the same product sold in different countries, but the branding, packaging and marketing is specific for those countries. A CPG company in a region will have its own marketing program – from research through to campaign – which could be quite different to the same company in another region. I have not seen that approach adopted yet by any ERP company – where the marketing plan and decision-making is centralised in one developed country.

In my un-researched opinion, based on personal information, these might be some major regional ERP dominances:

UK -  Dynamics GP, Sage
Northern and Eastern Europe – Dynamics NAV
Sub-Saharan Africa – SYSPRO, Sage
Middle East – Oracle

I am not familiar with India, Asia or Australia, but would be interested to hear what others think are the situations for those regions.

So, my recommendation to:

• the northern analyst organisations – by all means keep up what you are doing but be more explicit about regional differences,
• the major ERP vendors – break out of your centralised marketing mentality and create teams in separate countries/regions who are allowed their own discretion on what to market, how to package (modularise) it, and how to sell and price it.

Oracle marketing

A bit delayed, I read Dennis’s post about the Oracle EMEA marketing event. I wonder if he remembered attending the JDE EMEA marketing events (in the old days).

I am intrigued how Oracle handles its marketing events, it’s not a company with only a database and an ERP application anymore; as I learnt as SAPICS when I met up with a couple of my former colleagues from JDE.

The Oracle sales people now have to be able to contend with BEA, Hyperion, JDE and Peoplesoft, and Siebel (which has 104 modules!).

Another joy about selling for Oracle is that it takes three weeks to provide a customer with a quote; apparently all pricing has to be done by Oracle corporate.

Dynamics’ revolving management

I agree fully with Frank Scavo about the effect of the revolving management (yet again) inside Microsoft Dynamics. I have also mentioned before that Microsoft doesn’t seem to be able to keep management in the Dynamics division, and they tend to get people without appropriate experience.

Here’s Frank’s comment:

none of the players since Doug Burgum have any experience whatsoever in enterprise applications. As I’ve said in the past, selling shrink-wrapped software–whether it be Microsoft’s or Adobe’s–is a far cry from selling enterprise applications that require months of presales team effort.

I learnt that in 2003 when I went for an interview at Microsoft South Africa for the marketing lead in the then Business Solutions division. The HR person who interviewed me obviously thought that selling ERP was like selling Office, and asked me what I considered to be uninformed questions. I didn’t get the job, which I now think was a good outcome, although at the time I was devastated – after all I had built up the JD Edwards marketing profile in South Africa, so why not Microsoft.

My marketing mentor from JDE, now a senior EMEA marketing person at an anti-virus vendor, tells me how he is struggling to get their consumer-oriented perspective to understand enterprise marketing issues.

The marketing disconnect

An article in Harvard Business School Working Knowledge brought back some old feelings about how marketing has become viewed in many organisations.

Fixing the Marketing-CEO Disconnect examines what has happened to the position of marketing in recent years and how it has dropped from a role of importance in the executive office. Locally I know that the marketing executive of a telco is no longer part of the executive team because marketing isn’t considered ’strategic’ enough.

According to HBS:

“marketing exists far from the executive suite because the CEO perceives that there is not the same pressing need to master the marketing discipline as there is, for example, to master finance due to compliance issues”.

HBS points out that in many companies there is:

“a yawning gap between actual revenue growth and investors’ expectations … Marketing is the way in which firms can close this gap because it encompasses all the activities of an organization that listen to the customers’ voice and ultimately generates profitable relationships.”

Marketing has other responsibilities as well:

“responsibility for brand equity still resides in the marketing function, yet brand equity has never been more volatile and important”

The problem HBS identifies is that:

“the fundamental nature of marketing has shifted so rapidly that many companies have not kept pace … Over the past 10 years the mix of marketing skills needed by a company has radically changed”

From my experience, marketers at the corporate level in high-tech companies tended to have come from a marketing background. This may be appropriate if the company is in the consumer (B2C) end of the industry, but I don’t believe it helps at the business (B2B) end. Looking at the good marketers from companies like DEC and HP in the 1960s and 1970s, they tended to be from an engineering background. Those people could understand the technical issues of the products and then apply that knowledge to position those products to their target audience.

In my opinion, part of the problem that Microsoft Dynamics has against SAP (in SA anyway) is that Microsoft marketers come from the Microsoft ‘classic’, B2C side and think they can market to businesses in the same way.

Marketing becoming more formal

The MarketingSherpa website has published ‘5 Steps to Better Marketing Operations‘ (restricted access). It discusses the rise of Marketing Operations (MO), a field which is trying to formalise and quantify marketing, and something that I was introduced to at JD Edwards in the early 2000s. MO arose as a response to the executive view that marketing was not measurable and therefore not manageable.

The steps are:

#1. Establish a formal MO function

This means that MO is not a one-person job, and should have its own budget. It also mentions not making “the mistake of expecting immediate ROI … research shows that investments in an MO function should be viewed as a long-term investment and requires a three- to seven-year payback.”

#2. Broaden the MO scope

In order to be effective, broaden the scope of MO to cover not only the marketing department’s activities, but also interactions with the entire company.

Best practice firms included the following nine areas in their MO efforts:
o Measurement
o Planning
o Process improvement
o Marketing IT
o Budget and finance
o Marketing intelligence, including research and analysis
o Socialization and communications within the organization to get buy-in for MO activities
o Stakeholder alignment
o Sales alignment

In addition, best practice companies also included dashboards and scorecards in their MO functions.

#3. Align MO goals with the biggest marketing challenges

These are:

o Measuring marketing ROI and demonstrating value
o Balancing marketing strategy and tactics
o Creating common goals for marketing success tied with other groups

Some companies using MO mentioned that they “practice marketing accountability (setting specific commitments, tracking and adjusting performance)” to measure and demonstrate ROI. Others said they use MO “to balance big-picture, strategic planning with day-to-day marketing execution decisions.” MO was also used to make better use of “other groups in the company who have a stake in marketing decisions.”

#4. Get buy-in from senior management and outside departments

Examples include:

o Integration with the sales organization to tie sales objectives with MO goals
o MO personnel having an early role with business units for product development ideas

#5. Conduct regular reviews to improve MO functions

Typical topics covered in these reviews are:
o Annual or quarterly marketing planning
o Budgeting and resource allocation
o Creative issues and brainstorming
o Education and team development
o Marketing portfolio investment evaluation
o Operations optimization

 

If you have never experienced MO, reading the above sounds like more marketing speak. It is definitely for larger organisations and you usually have to go through the stages of marketing accountability. At JDE, it required quite a culture in marketing to get us started, but that was the post-Y2K and -9/11 era, and marketers realised it was needed to help us survive in our jobs.

Many companies are going to find getting MO systems difficult, in the same way that HR managers struggle to justify investment in HR systems. Also, marketers are traditionally not a measurement-bound group of people, unlike sales, and therefore are likely to resist. Furthermore, few marketing managers will have a clear idea what measures to employ.

I’m not sure how many recent marketing-oriented graduates from SA universities have had the exposure to this new type of system, and whether it is generally taught at universities yet.

Dynamics marketing knocks SAP

Microsoft Dynamics Partnersource site (restricted access) has an interesting competitive marketing piece:

Microsoft Dynamics vs SAP ERP End-User Business Productivity Study

In a field study conducted by Keystone Strategy, working under the direction of Dr. Marco Iansiti, the David Sarnoff Professor of Business Administration at the Harvard Business School, we measured how end users of Enterprise Resource Planning (ERP) applications describe the impact of Microsoft and SAP applications on their business productivity. This research found that Microsoft Dynamics end users on average rated their experience with Microsoft applications more favorably than SAP users rated their experience with SAP.

I have a copy fo the white paper on it. The questions were in the following categories:

-Collaboration
-Business insight
-Flexibility
-Usability
-Familiarity
-Transactional efficiency

 Sample questions and comments were:

-It takes too long to learn how to work with this software
-This software is very awkward to use
-I sometimes don’t know what to do next with this software
-There is too much to read before you can use the software
-This software is awkward when I want to do something which is not standard
-There are too many steps required to get something to work
-It is easy to share my comments and provide feedback on the work of others in <SAP> <Microsoft> software.
-My company is able to change how we use the software as our business changes
-<SAP> <Microsoft> software enables me to create comprehensive forecasts for my department
-It is easy for me to submit work to my supervisor for review or approval
-<Microsoft> <SAP> software makes it easy to manage problems and exceptions that arise in my day to day work
-I can easily gain visibility into sales, operational, and financial data across divisions and locations in <Microsoft> <SAP> software

The white paper has three major findings:

1. The importance of user productivity should be significantly elevated in software purchase decisions
2. High user productivity is driven by more than an appealing user interface and must be evaluated on multiple dimensions.
3. Applications differ in their ability to make features available, usable, intuitive, and valuable to end users and high marks in these areas positively impact user productivity

Didn’t Oracle do something similar against SAP?

Look into SAP marketing (until 8 August)

MarketingSherpa has published a case study on how SAP organised and implemented its marketing for the SMB market – presumably the Business One market:

How SAP Took Local Approach to Global Level for SMB Lead Generation

Note: The case study is only available in the public domain until 8 August.

An interesting point for me was the recognition that a global, or regional campaign can only go so far; local requirements and conditions in each country have to be respected.

I don’t know whether SA is part of the pilot described in the case study, but SAP have launched an interesting campaign here aimed at the mid-market – Go4Growth.

I am left wondering whether Microsoft and Oracle might learn from this case study.

IT marketing changes

An interesting item in a MarketingSherpa report on B2B (business to business) marketing is that companies consider that they find the vendors, not the vendors find them. The authors comment that for marketing this means changes.

“Instead of doing one big campaign of the year, I would break that budget up into 12 months and do a systemic, cross-media, low-volume campaign that goes on all year; a year-long presence in every possible media that those prospects are looking for you in”

The vast majority of companies start looking via a search on Google, which means that search engine marketing and optimisation should be a priority – “if you’re just depending on someone in the Web department who thought he’d do it on the side as a favor to the marketing department, you’re not spending enough.”

There’s also an interesting finding about how web site layouts should be done as people “find it easier to find what they were looking for when it was fewer columns and there were navigational items well above the fold and their view wasn’t blocked with this big ad in the middle.”

A guide to understanding marketers

I started my IT career, too many years ago, as a techie, but spent over six years in IT marketing in the mid 1990s-early 2000s. Those years at DEC, Compaq and JD Edwards were wonderful, but during that time I discovered how disconnected marketing could be from other business functions, particularly sales and finance. So it was with great enjoyment that I read James Utzschneider’s blog.

I would describe it as “how to deal with marketing people, for finance people”, and should be prescribed reading. It covers some important topics:

• how finance should talk with marketing,
• that simple metrics can be used for marketing activities, without being too threatening to marketing people,
• the reality of balancing measurement of marketing with execution.

It’s the kind of subject matter that could be turned into a book.