Nicholas Carr Grades Out At A "B"

I recently read an interview with Nicholas Carr of "Does IT Matter?" fame. His general position, is that as Utility Computing takes-off, IT will become redundant.
http://www.cioinsight.com/c/a/Expert-Voices/Nicholas-Carr-Why-IT-Will-Change/


All in all, I think that he is going for headlines rather than taking into account the distinction between "powering IT assets" versus "delivering computing resources and applications". Powering IT assets has already changed, and IT organizations already use external providers to "power" their technical operations.

Using IQ as an example, our SaaS offering is used by a variety of Fortune 1000 customers and we run it from a third-party data center. In each of the sales to these customers, an IT representative had to bless the deal, knowing full well that they are 2 degrees removed from the actual applications. From an internal perspective, our production websites are run by a specialized service provider as virtual instances. I would much prefer to have them take on the responsibility for bandwidth and HW capacity provisioning.

In each of these examples, the production assets are managed by an IT operations group. So, the staffing of these IT resource may shift somewhat from service users (i.e. business users) to service providers (i.e. grid computing providers), but they are not going away.

Sharpening The Saw Ends In Spider Webs

An old mentor of mine has always preached that life is a journey and that you need to constantly "keep your saw sharp", implying that periodically you need to pick your head up from the grindstone and learn about evolving strategies, trends and techniques. Given the incredible pace in which options for marketing promotions [Kotler's P #4] are evolving, his advice is an absolute requirement to be effective.


Over the last couple of months [mostly between Xmas and New Years] I did a deep dive into the most current thinking on SEM and SEO. Gotta love Marketing Sherpa, Marketing Experiments, vendor white papers and easy access to thousands of online opinions. Well, it was encouraging to see that the techniques we have been using at IQ are current and in some cases "leading edge". We have moved beyond focused website optimization and scoring, landing page testing, conversion tracking and lead nurturing.


I see one 'gap' in current online practices.....current B2B approaches seem to be focused on either Instant Gratification or Long-term Nurturing. There is very little attention on the step after Instant Gratification but before actual sales team engagement. For IQ, given our sales cycle, a sales person is always involved in the purchasing process. So, let's compare a Typical B2B Lead Capture Best Practise (current IQ approach) to what I will call a Spider Web (potential IQ approach).


Typical B2B Lead Capture Best Practise

• Marketing campaign run [online / offline]
• Prospect is sent to a landing page with analytics tracking
• Landing page has a focused call-to-action (CTA)
• Prospect enters their information
• Prospect information is added to CRM system [lead scoring may happen]
• [Instant Gratification]
• Screen shows a "thank-you somebody will be in-touch" message
• The End

An Alternative Spider Web Approach

• Marketing campaign run [online / offline]
• Prospect is sent to a landing page with analytics tracking
• Landing page has a focused call-to-action (CTA)
• Prospect enters their information
• Prospect information is added to CRM system [lead scoring may happen]
• [Enter The Spider Web]
• Screen shows a "thank-you" message + contextually relevant additional information for the user to click-on / learn more about
• The End

What's the big difference between Spider Webs versus Typical B2B Lead Capture Best Practises? Maybe the following points can illustrate them:

1. When a prospect lands on a landing page, the message is tuned to where they are coming from (i.e. what campaign were they targeted with? what keyword did they click on?)

2. Once they have entered their information into your online capture form, you have additional knowledge of who they are (i.e. role, organization size, geography, etc.).

3. With this additional information, contextual content can be presented, engaging the prospect to learn more and to be better informed, ideally accelerating the sales cycle once the sales person speaks to them. For example, a person that self-identifies themselves as working for a manufacturing company, will be presented with a manufacturing specific case study.

Spider Webs are nothing more than a concept of mine but I feel strongly that success comes to those who innovate [and work bloody hard]. My IQ team still needs to refine how we implement and test the Spider Web concept, but the bottom-line goal is increasing the efficiency of our marketing campaigns. Test data will quickly identify whether it is a worthwhile concept or not.

Google - the amazing perpetual revenue engine

Google is truly an amazing revenue generator. In the last six months, our PPC advertising costs on select key-words have risen almost 300%. So, in order for a specific key-word to show on the first page of search results in positions 3 - 10 we are now paying $3.50 per click versus ~$1.20 in July 2007.

The cost increase can be attributed to Google's AdWord tools that prompt advertisers to optimize their campaigns and increase their positioning. Typically, all this means is that you need to increase your per word spend. Each time an advertiser optimizes their campaign, all other advertisers in the category suddenly need to re-optimize theirs. To add insult to injury, the optimized results are typically broad matches with inefficient campaign structures. A bit of a vicious and expensive cycle.

From a business standpoint, the efficacy and cost-effectiveness of Google AdWords is starting to go down. Given Google's higher CPC we have begun to shift advertising $$$ to other vendors and other mediums. While there are oversight and reporting costs of managing campaigns across multiple engines and mediums, financially it makes sense. Over time, I would expect a similar reaction from other advertisers. There is no such thing as a perpetual motion engine and given the alternatives, I don't expect Google to become a perpetual revenue engine either.

SaaS - One Size Does Not Fit All

While getting my MBA from Kellogg, I co-founded a supply-chain and logistics software company (Celarix) that delivered the "software" as a web-based service. We launch the company in 1998, and we were one of the first in our space to offer a solution as a hosted application. When setting the strategy and defining the delivery model, I didn't realize the buzz around SaaS that would come a decade later. At the time, the unique approach made strategic sense, provided a compelling model to customers and resulted in the company being acquired around four years later.
For Celarix, SaaS was the best and only viable delivery model. In a nutshell, the service provided visibility to global supply-chain activities by integrating with hundreds of the world's leading logistics providers. Given the effort required for each integration, it would have been very difficult for any customer to replicate the network that we could develop. By offering the solution via SaaS, we were able to provide software + valuable logistics data.

Today, I see a lot of hype around SaaS but not a lot of business models that provide value beyond just the backend IT blocking and tackling. While there are benefits to SaaS, there are also issues and it is not as a one-size-fits-all option however.
SaaS Benefits
1. Somebody else takes care of the technical "plumbing"
2. Barriers to switching are low
3. Costs can be spread over a longer period of time
4. Time to value can be accelerated



Saas Issues

1. Everybody is up or everybody is down
2. Everybody must run the same software version
3. All change management is on the vendor's schedule
4. SLA's are still scarce - (even Salesforce.com, the poster child for SaaS doesn't offer them)
5. More expensive over the long-term
6. Corporate governance takes a back-seat [i.e. backup, disaster recovery, archiving, SOX compliance, etc.] are mostly outside your control
7. Capabilities for integration into legacy systems is still not widespread
8. Vendor "sustainability" and access to the application is not guaranteed (i.e. with installed SW, if the vendor goes out of business, you still have the SW to run. With SaaS, you have limited recourse)

For some, SaaS is a great options, while for others, on-site deployment is a better alternative. The dogmatic industry drum-beat that SaaS is the best solution for everybody is downright wrong.

IQ Website Launch - Results Exceed Expectations

About 6 months ago I hired a Marketing Production team in Bangalore (see June 1 2007 posting) to do website development, collateral creation, SEO, SEM, online advertising, etc. Their first main project was to develop a new "customer network" concept for IQ; very Web 2.0 and extremely promising. The team delivered the prototype with flying colors and the "project" is expected to be launched in 2008. Their next initiative has been the redesign of the IQ website as well as a completely new collateral package that includes new product positioning, customer case studies, Podcasts, recorded demos and more.

For a number of business and schedule reasons, the website launch has been split into 3 phases:

Phase 1 - Re platform the website so that marketing can make content changes without engineering input. This will accelerate content creation and increase efficiency / cut costs. We are migrating the aspx website to a CMS system (Joomla) with integrations to SugarCRM. Other items in scope include additional content, more detailed analytics and significantly more targeted landing pages (squeeze pages).

Phase 2 - Redesign the homepage and include new events, Call-To-Action options, PR and product information. This will coincide with the 3.0 launch of an IQ product in Q2 2008.

Phase 3 - Update the website to support on-going marketing activities.

Phase 1 has been completed and we launched on Nov 1st; the first two weeks of metrics have exceeded my expectations. When comparing the old site to the new site for the same period in the current and prior months (Oct 1 - 15 vs. Nov 1 -15) the results are very encouraging:

Avg Time on Site +199.95% (good)
Bounce Rate -13.89% (good)
Average Page Views: +31.04% (good)
Goals (new leads) +42.86% (good)
Absolutely unique new visitors -32.66% (not so good)

At first glance it is a negative that our number of absolutely unique new visitors has dropped by 32%. While I never want to see a drop in visitors, it is actually a good thing. When we launched the new site, I initiated an online advertising review that ended-up reducing the number of words that we are paying for - essentially cutting out the lower performing "garbage" words but paying more for the high-value words. The 32% reduction in visitors is a result of this......and so is the 42.86% increase in conversions. All in all a good trade off.

Marketing Organization Structure 2.0

For the last decade or so I have successfully used the same marketing organization structure. With all the changes going on in marketing (e.g. new mediums, metrics driven evaluation, etc.) and the internationalization of my team, I've decided to spend some time analyzing and validating the structure.

I organize based on the following work breakdown structure:

Corporate / Group Marketing:

• Strategy
• Positioning
• Branding
• Website [including SEO]
• Metrics & Analytics
• Tools

Marcom / Communications:

• Public Relations
• Analyst Relations
• Online Exposure / Digital Outreach [this is a new responsibility and includes coordinating online feedback, blogging, message boards postings, viral exposure, directories etc.]

Field Marketing:

• Lead Generation Campaigns
• Advertising (online & offline)
• Marketing Campaigns (nurturing and upsell)
• Sales Team Support
• Events

Product Marketing:*

• Product Positioning
• Collateral Development [brochures, cutsheets, whitepapers, case studies, etc.]
• Sales Tools Development [ROI calculators, positioning sheets, presentations, etc.]
• Competitive Monitoring & G2

Product Management:*

• Product Roadmap
• Business Case Development
• Requirements Gathering
• Solution Validation
• Sales Expertise

* (Note: Product Marketing and Product Management responsibilities can often blur. Depending on the organization and resource capabilities, Product Management can shift from marketing into engineering or its own stand-alone group. With IQ, the Product Roadmap, Requirements Gathering and Solution Validation lie in either the engineering team or marketing team depending on the product and resources.)

So, I started out this posting to validate if my tested Marketing Structure has held-up, and it has. There are a couple of newer responsibilities in PR (online based), and Field Marketing has additional mediums (e.g. SEM) that are evolving very quickly, but all-in-all the structure works. Also, depending on the company size, these activities and responsibilities can either be assigned to individuals, or in larger organizations, spread across different teams. Does this structure apply to all organizations and industries? Nope -one size does not fit all- but it does work well for on-premise Software companies, SaaS providers and online information based services. I am sure that at some point I will evolve and change the structure, just not yet.

The Grass Is Pretty Green ....

I recently helped a "Green" manufacturing company launch their website. It sure was fun to deal with marketing issues outside of the technology industry for a while.

Let me give some background here - his company is about a $20m manufacturer of on-site chemical generation machinery that has no full-time marketing staff, no full-time IT staff and a budget for marketing slightly more than zero. They had a website that was done about 3 years ago and had not been updated since then - it showed. Without a CRM tool, website lead capture, analytics, outbound marketing campaigns or advertising programs (they do some trade shows) it is an absolute testament to their product and sales abilities that they have gotten to the revenues that they have.

They recently won a number of major deals and had gotten a lot of interest in their products. The management team felt that the time had come to build-out their web-presence and marketing programs. That's where I come into the picture - as the "brother that runs marketing for a SW company" I was asked to help-out and provide guidance.

I agreed to coordinate the activities and took the project on as a "consulting hobby". In under 2 months (part-time) we accomplished:

1. Selecting the Content Management System (Joomla)
2. Contracting a joomla engineer to do the development
3. Coordinating flash and graphics work with a freelance designer
4. Selecting their new hosting site
5. Managing the process
6. Editing the content
7. Implementing an online advertising program (Google AdWords)
8. Implementing the analytics package (Google Analytics)
9. Selecting the CRM package for web-to-lead capture (Appitas CRM - http://www.appitas.com/)
10. Successfully launched the site

While it is always fun to get into the trenches (it helps me to better understand some of the tasks that my team does) the greatest reward is seeing the results.

Since launching the new site (with a rebranded domain name), a limited advertising budget and some guerrilla marketing, the traffic has gone from 10 users per day to hundreds per day [yes not a huge number but remember the segment and budget] with global visitors and leads being captured in their CRM system. They now have a platform for expanding their marketing activities with tracking and analysis.

Pretty cool to be able to help-out and see the results so quickly.