INDUSTRY ANALYSIS
When in Doubt, Ask the Customer

One of the benefits from the explosion of sales effectiveness solutions has been the effect on the marketing process. For too long, selling was regarded as a pseudo science while marketing was regarded as an art that needed to be tightly controlled to prevent waste. So it was no surprise to hear discussions of marketing ROI or to see marketing automation defined as a product set that had a lot in common with accounting.

That thinking was symptomatic, in my humble opinion, of an attempt to fix what wasn't broken. The early markets, especially for technology products, hooked many enterprises on rapid sales and high margins, and when that inevitably slowed down, it was only natural to attempt to manage the process better in an effort to forestall the inevitable market cooling.

Turning the Tables

The inevitable happened nevertheless, with the result that customers gained the upper hand. Today vendors compete harder for business and take smaller margins in the bargain. In the early market, it was relatively easy for a vendor to be unique. Today, though, for every product category there are multiple, authentically competitive products, and vendors must compete either by knowing the customer and the customer's needs better or by discounting.

Vendors who are unaccustomed to getting to know the customer, or who have little interest in that approach, will find that their options are limited and price erosion is inevitable. However, vendors that reach out to customers are finding there is a wealth of free information to be gained and turned into products, messages and services.

In earlier columns I have talked about the idea of capturing the voice of the customer (VOC) and its centrality to sales and marketing. Once an organization gains customer knowledge, though, it has to act on it, keeping in mind that such knowledge has a half-life, and that's where the importance of a revamped marketing process comes in.

Shifting Focus

New sales and marketing products in categories like market and sales intelligence, sales operations, and sophisticated demand generation are leading the way towards leveraging readily acquired information for several front office processes. While we focus a lot on sales and marketing, there are also other processes that leverage the idea of collecting information, including channel management and product innovation.

Product innovation is one of my favorites because capturing the voice of the customer supports on-target product development, which delivers multiple benefits all the way up the production and supply chains. Emerging companies know the value of staying close to their customers and it is often this customer focus that helps a company go from good idea to market dominance. Older companies drift away from that kind of focus and too often rely on gut and experience to bring about the next round of product innovation, and too often that round fails.

Until recently, the alternative was slow and costly focus groups and conventional surveys, but the new emphasis on Internet driven VOC capture has changed that. Organizing customer communities for the purpose of capturing VOC has resulted in some impressive insights that have driven product introductions and great success . The trend is most pronounced in the business-to-consumer market but it is spreading to the B2B side as well.

A New View

Similar results have occurred in the indirect channel. As vendors have become smarter about how they can leverage the Internet to capture information from their channel partners, the information has begun to drive more effective and enlightened business processes and practices.

What is impressive to me about all this is that the technologies required by many of these new business processes are not terribly advanced. What is advanced is our way of viewing a business problem, and it is the changed way of looking at a problem that makes new solutions possible. A new view surfaces new challenges and only then can new solutions be contemplated.

To be sure, we still spend too much time forecasting demand based on what worked before rather than asking what's new or what has changed, but we're getting better at it, and products in categories we label with the word "effectiveness" are one very important reason why.

Marketing has taken on more stature in CRM recently largely because we now think more about the inputs to the sales and marketing process rather than just the results. The definition of marketing as gathering VOC and doing something with it has not really changed, but it has been rediscovered, and part of the reason is that we now have good tools that make it feasible and affordable to reach out to the customer. Of course, everyone hasn't gotten that memo yet, but markets are built and dominated by early birds.