I enjoyed Mike Fischler’s recent article in IT Marketing World, “Gigantic ROI: What Marketing Does Best”. Fischler points out that return on marketing investment (ROMI) is often difficult to measure. He also lets us know that there are factors outside of Marketing’s control that affect traditional revenue-based ROMI measurements. For example, if Marketing delivers some sweet leads and Sales drops the ball. Is Marketing then responsible for missed revenue goals?

Fischler then goes on to point out another way that ROMI can be measured: viewing Marketing’s impact in terms of cost savings. “We measure and pitch the ROI of most tech solutions by decreased cost, not increased revenue,” he writes. So why not measure marketing ROI with the “Saves Money” (rather than the “Makes Money”) approach? As an example, he focuses on how product collateral shortens or removes steps from the sales process—a cost savings.

For a number of years I have been preaching about how marketing investment should be viewed as delivering ROMI through the multiple corporate functions that it impacts. Sales is one of those functions. I have also written about how marketing delivers ROI through its impact on Human Resources.

Should “Saves Money” replace “Makes Money” ROMI measurements? The “Saves Money” ROMI is an important viewpoint and taken alone may justify marketing expense. However, revenue is important. There is no problem using “Makes Money” ROMI measurements if the proper “how” and “when” of those measurements is understood and corresponds to realistic goals. However, alone they are not sufficient.

The proper approach to measuring ROMI needs to include several metrics that paint the full picture. Fischler’s article on “Saves Money” ROMI underscores the importance of taking a broad view.

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OK, that headline is a bit satirical—but it is to the point.

By now, due to wide media coverage, many if not all readers of this newsletter will have heard of Netflix's recent self-inflicted trauma.

First, Netflix implemented large rate hikes for its steaming service and announced that the DVD and streaming service payments would be split. Second, it revealed that Netflix would split the DVD delivery and streaming services into two websites. Finally, the company is now rapidly backing off the split, announcing that the services will remain together.

Virtually the only thing Netflix did right was the last thing: promote increased selection for streaming content. Pretty much everything else was a disaster.

Gartner's Allen Weiner (Research VP for Media Service) commented, "But you have to admire the transparency that [CEO] Reed Hastings and Netflix has had. This isn't something they've done in secret and then sprung on customers. They've been really open and honest about it..."

Weiner was only halfway paying attention. Yes, there's a value to transparency and honesty with customers: admitting when you’ve made a mistake is important.

However, let's rewind a bit and take a look at what really happened. Hastings, via blog posts and a video message to customers (Netflix content on YouTube), admitted that the company communicated poorly regarding the reasons for the business split and price increases. Compounding this, Hastings simultaneously proposed the further step of spinning off the DVD service as a separate website—an announcement that caused many customers to immediately lose patience with Netflix, and caused the company to do a rapid about-face.

So unless Weiner's point is that it IS better to "open your mouth and remove all doubt", or unless Hastings is some sort of genius directing machinations far beyond our understanding, I fail to see how Hastings is to be admired. I prefer the reflections and advice offered by Fordham University Professor Paul Levinson as published in the Christian Science Monitor.

Disclosure: I’m a Netlfix customer. Though I am amazed at Netflix’s apparently clumsy efforts to steer its ship on a new course, I still think I’m paying a decent price for the service that I receive. My general feeling is that I was getting a pretty good deal before, and I’m still getting a decent deal. Alternatives to Netflix don’t appeal to my tastes as a consumer. I think streaming video is already great and will get much better. So I’m not full of vitriol over this—just shaking my head and laughing. Even after all this, I want Netflix to thrive and get better, not worse.

And ironically, Netflix could have avoided all of these problems by asking me—or any business-minded person familiar with Netflix’s services (perhaps you). Who among us would Netflix have found to say, “Well, I think you should charge a lot more, then tell people you’re going to make enjoying the service more difficult, then admit to twice making a huge mistake. Finish it up by telling people that the price hikes will remain in force. That’ll be peachy!”

At the end of the day, this is a question about leadership. The question must be asked: have the leaders at Netflix become so divorced from reality that they didn’t see this train wreck coming? And if so, should they be leading the company into the future?

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When I talk to software product development shops, discussions on user interface (UI) design encompass a wide variety of principles—perhaps ten to a dozen interrelated ideas that help to create a functional and enjoyable experience for the user. However, there is another reason to focus all the more intently on a great UI: product marketability.

Products don’t just need to be usable—they also need to be marketable. Usability, marketability, and UI design intersect properly only when the UI leads the customer to assign value to the product.

Emotions in Technology Purchasing Decisions, As Affected by the User Interface

Both designers and developers can forget that that purchasing decisions are often strongly influenced by emotions. While we like to think of the software purchase/subscription decision as being a shrewd comparison of features and benefits, it is in part an emotional transaction. (How much emotion comes into play varies dramatically from customer to customer.)

A good UI helps customers to bridge the gap between their current needs/aspirations and a new reality of knowledge and capability, and this results in a greater value being assigned to the product. Potential customers need to feel intellectually and emotionally rewarded through the product experience.

Moreover, designers need to remember that customers may arrive at product testing with strong emotions created by outside factors. A good example: upsetting past experiences using “unintuitive” and “unhelpful” software to perform critical tasks. This may not only have limited the customer’s ability to get things done, but may have contributed to frustration and anxiety about team/individual performance assessments.

The customer will push the “panic button” early in product testing if the “next move” isn’t immediately obvious. So which “panic button” will the user choose to push? The marketability of the product may depend on it; the value that the customer assigns to the product may be going down by the second.

One Way to Control the Panic Button: The Help System

An area of good UI design that is critical to building positive user emotions is the Help system. It is very important that the customer feel supported throughout the product experience. UI designers can control the panic button by placing Help system cues at appropriate locations within the system. (Hiding a small question mark icon in an over-cluttered toolbar barely counts.)

In my observation, over the years designers have become better at placing help cues throughout the interface. Developers have become better at making help systems respond intelligently by providing information relevant to the context in which the user is attempting an action. But there is still a lot of room for improvement in the location of Help cues, the presentation of Help information, and the content of the information itself.

If the struggling user is able to access the Help system quickly, get the instructions/explanation needed, and get right back into the game, the sense of panic or frustration can be turned into accomplishment and appreciation. What might have been a threat to marketability becomes an asset.

The Wrap Up

Many user interface design decisions are hotly debated, and only so much time and budget can be spent on the design process. Often, design decisions are the result of some type of compromise.

However, software development shops need to have some conception of how the UI is influencing perceived product value and overall marketability. Otherwise, you risk increasing the marketing budget and decreasing return on investment for both the product’s development cost and its marketing expense.

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Forrester’s Tim Harmon recently released a blog post titled “The Who and How of Customers’ Technology Decisions”, which highlights summary data from the nearly identically named Forrester report.

Creating an integrated marketing strategy, with proper budgetary allocations for each channel, is a difficult balancing act. Forrester helps by highlighting how customers look to analysts, vendors, consultants, colleagues, and peers to influence their purchasing decisions. The report sheds some light on which channels are valued by each influencer. Hopefully, this will lead to less error in selecting the right channel(s) through which to deliver the appropriate information for each audience, and greater ROI in technology marketing.

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This blog post is the introduction to a new article, available in PDF format, about the value of an effective hiring process (including an outline of the process).

Effective Hiring: The first rule of marketing a tech services firm.

The first rule of effectively marketing a professional services firm is to hire the right people to provide those services. Hiring the right people will significantly minimize your marketing expense and hiring the wrong people can scuttle your ship before she sails.

As a marketer, representing the best interests of a client, you have something to say about the marketability of the product that is being put on the shelves. Shy away from this responsibility and you place both yourself and your client at risk.

In the blockbuster business book Good to Great, author Jim Collins makes very clear: to make a great company you need the right people. Having talented, disciplined people on board is critical—great companies get the right people on board before figuring out the best path to maximum business success.

For these reasons—and because I hate to raise a potential problem without helping to create a solution—building fundamentally sound methods for effective hiring has become fascinating to me.

This article is about the value and process of “effective” hiring. I define “effective” as providing the maximum opportunity for business prosperity and a great corporate culture. The subject matter of this article applies to all types of business—from the local coffee shop to the Fortune 500 company.

Perhaps ironically, this article does not discuss how to advertise the position you are hiring for. Most employers can find effective avenues within a matter of minutes. If you don’t know how to advertise the position, then you need an HR specialist. (There is an addendum to this piece which discusses Marketing, HR, and ROI.)

Rather, this article is intended to address fundamental issues of creating a hiring process that elicits the best from your candidates and results in the right hire.

Effective Hiring: The first rule of marketing a tech services firm.

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Many technology service firms think primarily of customers when they consider making changes to their brand and marketing strategies. This makes sense: revenue comes directly from customers—therefore marketing ROI is most clearly demonstrated through success in the customer approach.
 
However, successful (high value, high profit) professional services firms place the hiring and retention of quality talent near the top of their list of challenges/priorities.
 
Your people are the product you sell. Keep the supply lines strong!
 
The employees of your firm provide the “product” that is sold to your customers. So in order to field a competitive product—one that can command a premium price—you must establish powerful supply lines. If your positioning and messaging architecture are focused solely on the prospective customer, those supply lines will underperform.
 
Formulating the right message to prospective employees and delivering that message through the appropriate channels is of great importance to successful recruitment. And it makes it easier for HR to attract top talent.
 
Applying communications/marketing principles and skills to HR.
 
In my experience, communications and marketing principles are under-applied in the job solicitation process used by many professional service firms. Proper application at your firm can help to create distinction and dramatically improve the odds of your firm's success.
 
Your HR communication is a part of your brand.
 
All public communication from your firm becomes a part of your brand—and HR communication is no different. These communications say, “This is the kind of company we are. These are the types of people we hire. This is what our culture is like.” Savvy prospective customers will look at the way your firm communicates to prospective employees to determine: (1) the quality of your team members; (2) the types of relationships that you desire in your dealings with others.
 
The bottom line: ROI
 
You can see that the benefit provided to HR (through better marketing and applied communications skills within HR processes) creates an additional benefit: your hiring practices and how you articulate them can become a differentiator that helps your company to close new business.
 
So there are several ways in which the ROI is created:

• Brand and marketing strategy improves the recruiting process by increasing prospective employee lead generation, increasing the talent level, and increasing close percentage.
• Superior staff quality leads to improved competitive performance. Over time, this will help with business development: improving contract close percentage and shortening the sales process.
• Better people, better pricing and better contracts are factors that will drive higher profits and a premium valuation for your firm.

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Arguably, the first rule of marketing technology consulting (such as IT consulting) services is: "Hire great consultants." Following this rule doesn't guarantee marketing success, but it sure does make everything easier. The better your product, the easier time you will have selling it.

Therefore, in the Fall of 2009 my team held a couple of internal meetings focused on defining the essential qualities of a top consultant, or what we called the "true consultant."

Without specifically using these terms, the blueprint that you see below argues for adding experienced and disciplined members to your team.

After much discussion and reflection, here is the “true consultant” blueprint that was established.

1. Excellence in relevant technical knowledge
2. High ethical standards
3. Intelligent problem solving, including
   
   1. A strategic mindset, with attentiveness to maintaining objectivity
      1. Having the big picture vision while still cultivating an attention to detail
   2. Intellectual agility/adaptability
   3. Diligence and creativity in conducting and applying research
      1. The ability to apply logical diagnostic tools to problems
   4. Appropriate prioritization of tasks and goals
   5. Knowledge of risk assessment and management
   6. A proper approach to creating business cases and analyzing cost/benefit
4. Superior communication ability, including
   1. Present findings that comprehensively and effectively addresses all important data
   2. Empathy
   3. Broad and ready vocabulary

If you have any feedback or suggested additions, contact us!

This article was originally published on June 8, 2010 updated on September 21, 2011.

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Here are 10 important rules for success in selling technology services, based on my experience, third-party research, and industry case studies.

1. Services old to you might be new to a client.
Many a company has developed new service offerings as a path to growth when its current customer base isn’t fully aware existing services. A recent client of mine had extremely strong customer relationships (a fact supported by customer research). However, the same customer research revealed that 80% of customers admitted to ignorance of the full range of services offered. This is representative of a huge missed opportunity.

2. Offer services that are in demand.
Try to avoid speculative investments in new service development. Determine whether the services you propose to offer are in demand, and if the audience views the new services as being consistent with your brand. If you are a systems engineering firm, and 40% of your customers want you to offer Cyber Security services, go there. Pioneering a new service concept can be lucrative, but may present additional audience education challenges/expense beyond the norm. Know what you are getting into.

3. Understand how the customer wants to be approached.
Current customers prefer a one-on-one briefing when being offered new services. Tech companies with poor pitch skills tend to fire paper (real or digital) at the customer from a remote location. Develop your pitch, and make sure you get in front of the customer. Prospective customers want to be marketed to through relationships/networking and being able to find valuable and relevant web content.

4. Know the criteria with which you are being evaluated.
Focus on understanding client needs, technical qualifications, past performance, relationships, and reputation (in that order). Bring enough to the table in each of those areas, and you’ll have an easier time signing customers to new services. This is why hiring carefully for intelligence, capability, experience, and relationships is extremely important to technology services firms focused on generating growth and building value.

5. Understand and anticipate customer concerns.
Right now, many customers are focused on current or foreseen shrinking budgets. It’s a reality that needs to be addressed proactively. Flexibly restructuring agreements can be a key aspect in client retention, and can earn a future ear for the discussion of new services. Examples of additional concerns: infrastructure consolidation, availability/scalability of resources, successful project completion, long-term planning, relocation, solution durability, measurable success, project management, communication throughout the project, etc.

6. Be aware: the customer’s challenge can be addressed in more than one way.
A problem can have many possible solutions. You may only be aware of the part of the competitive field that provides the same solution as you—an inaccurate reflection of the competitive field as a whole. On average, your list of known competitors will overlap by only 25% a customer-provided list of your competitors. So you need to shape the discussion to favor your solution. The way to accomplish this is by learning to engage in regular discussions with customers at the level of business priorities and key challenges. Also, learn their “problem language” and use it for refining your brand messaging and marketing copy.

7. Be an advocate for your customers.
There are two ways in which you must be a customer advocate. First, the account executive needs to be the voice of the customer inside your business. This is a key to making sure that services are properly aligned to address customer needs; that customer priorities, values, needs, and concerns are not underrepresented. Second, promote and showcase your clients whenever possible. This keeps the relationship alive and mutually beneficial beyond the day-to-day provision of services.

8. Rome wasn’t built in a day, but parts of it were.
Solve one problem, and likely you’ll be asked to solve another. Solving a simple problem right away creates a foothold for building your empire. There are always better, more ideal solutions to client problems. Some symptoms really can’t be addressed without curing the disease, but others can. What can you solve right now that will help the customer feel understood and supported? Otherwise, you run the risk of being perceived as a knowledgeable company that pitches great solutions but fails to be attentive to on-the-ground concerns and immediate needs.

9. Your brand is important.
Many technology services firms know how to build good systems, but don’t understand how to build a good brand. A brand is more than a logo: part of building a brand is the crafting and deployment of clear, consistent, value-focused messaging. Getting this right need not be expensive, and is critical to success. If you fail to be clear, consistent, and value-focused, you introduce unnecessary obstacles to building the relationships that will determine your success.

10. Provide marketing training to non-marketing staff.
The most successful (high value, high growth) technology services firms make marketing a priority throughout the company. Employees need to understand the brand, appreciate the role of marketing in building a prosperous firm, and understand how to participate in the marketing process as necessary.

Bonus Point: Do no more than is necessary to attract and retain profitable customer relationships.
Marketing has numerous processes and best practices. There are particular ways to market technology services that will, by and large, lead the way to success. However, your firm’s makeup, its current state of development, and the preferences of your current/potential customers factor heavily into your marketing decisions. When thinking about what is the “best way” in marketing, balance it against the real needs and buying behaviors of particular prospects. This helps to concretize what to do, what not to do, and what can or should be put off until another time.

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Remind your customers why they are awesome... and also why you are awesome.

Human nature being what it is, once we have been in a relationship for a while, it is easy to start taking the other person for granted. It is prudent to assume that if you haven’t recently reminded the other person of how great they are (and how great you are!) they might lose track of the value in the relationship.

Business relationships are defined by the value proposition (or “quantifiable truth”) associated with two entities engaging in business based on the merits of the various parties and the benefits to be gained on each side.

However, as I said, merits aren’t always immediately apparent, so good communication is necessary to make sure that the value propositions are heard and understood, and that those propositions continue to be reinforced and strengthened through continued communication over the course of the relationship.

It would be an interesting exercise if we applied the same amount of discipline to assessing our personal lives. I’ll use myself as an example. What is the value proposition that I present to my wife in our relationship? What is the value proposition that I present to my children? To my parents? To my friends? Moreover, how do I effectively communicate this value—not just at the start of the relationship, but throughout its entirety?

In order to have good, long-term relationships with our customers, we find a more productive mode of interaction that is sustainable over the long term. Keeping this communication alive can be difficult and require discipline—but if you commit to this discipline as part of your relationship, it becomes part of who you are—it informs your character. You begin to see the reward of doing the difficult things, and then those things become less difficult to commit to.

Or you don’t, and things start to fall apart.

The recipe for good customer relationship management is going the extra mile, doing the hard stuff, being attentive and communicative, and constantly communicating value. Moreover, it is about creating true friendships whenever and wherever possible.

In short, it is about making a commitment to excellence!

This article is part of the "Being Married to Your Customers" five-part series. Click here for the first article and links to other articles in the series.

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When spouses don’t pay attention to one another, or communicate productively, they risk losing touch with one another.

Be attentive.

Imagine this scenario: the girl changes over the course of the marriage; new “customer priorities” emerge. Did the boy recognize those changes as they took place, or two years after the fact? Was he being as attentive as he should have been?

As a good spouse or a good business owner, you need to be attentive not only to the other party specifically, but also to everything that is happening around that person (in other words, the environment or operating conditions).

Example: Your business maintains a high profit margin by keeping your prices high in a poor economy. You aren’t paying enough attention to the conditions in which your customer is operating. Will you retain that customer?

Communicate clearly.

Business relationships, as well as personal relationships, can be very complex. If I talk to a mid-level manager in a company about a strategic change of direction, I'm not just talking to that person. Through that person, I'm certainly talking to superiors and subordinates.

Through that person, perhaps I am talking to a spouse or a valued friend. Perhaps I am talking to other consultants with overlapping areas of expertise.

This underscores the importance of good business relationships and clear communication. All of the above individuals may have some impact on business decisions. My message has to be clear enough to be received in close to its original form so that the facts and arguments that I have presented are not misconstrued.

The strength of the relationship with the client, moreover, helps to ensure that my thoughts receive a warm reception not just at the point at which they are delivered, but beyond through the multiple possible relays.

This article is part of the "Being Married to Your Customers" five-part series. Click here for the first article and links to other articles in the series.

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