B2D marketing

B2D marketing

For about twenty years, my focus on marketing and selling enterprise software was on business decision makers foremost, and technical people second. The software I was involved in was large-scale, on-premise applications with a high initial license purchase. That has changed in the last two years. Continue reading

Leaving the ERP world

changingAfter over 15 years, I will soon be leaving the world of ERP and enterprise software.

It’s been a great time to work in the ERP software field, especially as small- and mid-size (SME) companies started seeing the value and justification for ERP in their businesses. For ERP vendors like my nearly former employer SYSPRO, the growth in the SME market has been wonderful.

For me it’s been a great experience working for a South African software company that is truly global. Having been in the SYSPRO corporate office I have had exposure to how an international software company does strategy and development planning, and been able to interact directly with some of the best developers around. I also got to engage with colleagues in other countries, and learnt a lot about how those countries can be both the same and very different. I could not have done any of that at any other enterprise software company in South Africa.

Now I am moving on, up into the cloud, so to speak. I will be joining a Johannesburg-based software company called Flowgear as head of marketing. This company was founded in 2010 and has been one of  Microsoft’s local stars in the startup space. It has also got onto the Gartner magic quadrant in the sector where it plays – Enterprise Integration Platform as a Service.

I am impressed by what I’ve seen and heard of the company – especially at a recent seminar held at Microsoft. I am also really looking forward to my new role: helping to promote the company and grow the business, not just in this country, but also internationally.

I will keep on blogging here, but I’ve realised I may have to change the top tag line, I will have to drop the “enterprise” part off.

No end to B2B and B2C

marketingThere are several analysts and marketers who are have been saying that the distinction between B2B (Business-to-Business) and B2C (Business-to-Consumer) marketing has ended.

I first saw this view in a Harvard Business Review blog where analyst R ‘Ray’ Wang commented that

The emergence of extremely viral people-to-people (P2P) networks has changed the notion of the customer and employee forever. Social media, social networks, and mobility also herald the death of B2B and B2C as we know them.

This was repeated by a marketer who wrote ‘There Is No More B2B Or B2C: It’s Human To Human, H2H.’

I have not been convinced of this view. There are valid reasons why marketers separate B2B and B2C (as mentioned in the Wikipedia entry).

  1. Transaction volume and type. A business can have many B2B transactions in its supply chain processes involving different suppliers, materials and components, but only one B2C transaction.
  2. Buying decision. For an individual there is (usually) one person making the buying decision, whereas in a business there will be many people involved in coming to the buying decision.
  3. Buying process. A business usually has many criteria to weigh up in determining what to buy, and a lengthy and sometimes complex process before finalising the decision. An individual has fewer criteria and a fairly simple decision process.
  4. Brand image. People often buy something because of its brand image. Businesses may be influenced by certain industry brands, but other (often technical) issues can have a major influence as well.
  5. Risk. For a business buying a product (software, machinery), the benefit of the product has to be considered against the risk of going with that product, especially with high-value purchases (e.g., machinery, enterprise software). For an individual, risk is not issue, even for a purchase like a house.

An article by venture capitalist and technology strategist, Geoffrey Moore, writing about an updated edition of one of his seminal books ‘Crossing the Chasm’ points out the difference between B2B and B2C by discussing what makes a successful business product as opposed to a consumer one. There are two different models involved:

  • For businesses, the model of the Technology Adoption Life Cycle defines the characteristics and behaviours of different types of business buyers.
  • For consumers, Moore identifies a separate model, the Four Gears, a framework upon which to build a consumer-oriented business.

Those are enough reasons why B2B and B2C are different, and cannot be pulled together. Are there any more? If you disagree with my view, what are your arguments?

Update: I can across these two related blogs, which give a different perspective to the B2C vs B2B debate.

US technology neo-imperialism

I admit the title is dramatic, but I used to make a point – for some time there has been a view from the US that whatever technology they think is the best or coolest is automatically going to be used elsewhere.

I first saw this in the late 1990s at Digital Equipment when it was assumed that the benefits of 64-bit technology, used by a few US mega-corporations, could be easily transferred to and understood by smaller businesses in South Africa. It happened again in early 2000s at JD Edwards (JDE), when a few US companies began to use SOA (service oriented architecture), so it became a mantra at JDE that all businesses internationally should be looking at application integration, even if the processes, infrastructure and skills could not support it. It came up again recently with the hype around the Apple iPhone and iPad – many US-based (and some European-based) commentators took the view that everyone should using the iPhone, and ignored the fact that “the North American market has zero predictive value for the rest of the world“, which is dominated by Nokia. Now I’ve seen it again in a post coming via a CRM conference, that businesses should scaled back traditional customer management processes and approaches, and get on the social CRM bandwagon.

I think its worth reminding the US that trends and attitudes that start in New York or California do not translate across the world as quickly as they think and may not be adopted in the same way. As was mentioned to me by contacts in Canada, Australia and the UK, there are many mid-size company directors who have never used Facebook or Twitter and whose customers and suppliers don’t use them either. So a business trying to market to those directors would be foolish to focus too much of its marketing effort on social media.

The fact that I have this blog, and participate on other social media platforms, should show that I have got into the social networking culture, but I am realistic that the vast majority of people (including many of our customers or prospects) don’t turn to social media for any major business purpose. I would be interested in other perspectives, especially from people in developing countries – does the US have a mis-belief in the value and spread of its technology?

Update: if you want to see how social media is used around the world, the maps from Ignite Social Media show how localised social media really is to specific areas of the world.

Presenting for a Gartner Magic Quadrant

Sometime in the next few months, the Gartner analyst group is going to be releasing an updated Magic Quadrant (MQ) of the mid-market ERP software vendors. The reason I know this is because I was heavily involved in preparing the presentation that SYSPRO gave to the Gartner analysts.

Its an interesting experience to prepare for an MQ session – interesting as in the Chinese curse: may you live in interesting times. Or as a former mentor wrote to me: “the prep for Gartner is a killer and usually disproportionate to the benefit.”

For me, it started several weeks before, documenting the company’s product roadmap. But the work became really intense in the week leading up to the presentation.

If you aren’t familiar with it, Gartner evaluates product and service providers on an MQ against two criteria, made up of different measures:

  1. Completeness of Vision
  2. Ability to execute

Under “Completeness of Vision”, the measures and scoring are:

Measure Scoring
market understanding high
marketing strategy standard
sales strategy high
product strategy high
business model low
vertical/industry strategy standard
innovation low
geographic strategy standard

For “Ability to execute”, they are:

Measure Scoring
product high
overall financial viability standard
sales execution/pricing high
market responsiveness, track record low
marketing execution low
customer experience high
operations low

What first struck me was when I saw Innovation with a low scoring. On further reading of their preparation document, Gartner explained that this score was set because mid-market companies are usually not innovation focused. This corresponds with SYSPRO’s positioning in the market – what we call the ‘pragmatic buyer’. However I was surprised that Track Record was scored low as mid-market decision-makers tend to use word-of-mouth in evaluating suppliers.

Another discrepancy for me was that while Marketing Strategy was scored standard, marketing execution was low. Does this show that Gartner care more about spin than substance? Probably not, as the scores for Sales Execution and Customer Experience are high, indicating that Gartner do look at results and real-life experiences.

One caveat – while Vertical/Industry Strategy has a standard rating, don’t assume this isn’t significant. Other members of our presenting team knew from experience that Gartner like to see industry-focused strategy clearly spelt out.

Before the first call we debated whether we should show the product or discuss it. Our decision and approach was greatly assisted by reading Carol Rozwell’s blog ‘Vendors: suggestions to maximize briefing value’.

We have now done the first conference call, and are waiting for Gartner to get back to us to present their initial ideas and findings – this is to give us an opportunity to respond and suggest amendments.

If you have gone through a Gartner MQ briefing, how did you find it? Do you think it is worth it? It occurs to me that a little wiki could be set up to provide ideas, guidelines and good practices for vendors approaching an MQ call.

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.