Friday, February 13, 2009

Interview with The Funnelholic


I had a great chat the other day with Craig Rosenberg, better known as "The Funnelholic", based on his popular blog The Funnelholic (and of course to all of us on Twitter as @funnelholic). Craig is a great guy, fun to chat with, and smart as a whip when it comes to the challenges of managing the top of the funnel.

Our conversation ranged across a number of topics, from the evolution of social media and its B2B marketing applicability, to measurement and the challenges of today's CMO. I got a lot out of our conversation, and I hope you will too.

From my conversation with Craig Rosenberg, the Funnelholic:


Steve: Will social media scale? As it increases in popularity, the 1 to 1 conversations become increasingly more difficult to maintain, and the top names in social media are evolving towards a bit more of a 1 to Many communication model (although many are exerting great effort to maintain as many relationships as they can). Where do you see this evolving to?

Funnelholic: This is a complex question not only for me but for everyone. As I mentioned in my post, Fear of a Twitter Planet (http://www.funnelholic.com/2009/02/04/fear-of-a-twitter-planet-the-11-things-i-know-about-the-twitter-phenomenon/), if I could give the state of the union on social media, I could achieve “internet fabulous” status. I am not there yet.

But your question has a number of interesting elements to it. First of all, is the 1-to-many model bad? Yes, platforms like Twitter are becoming 1-to-many, but that is the whole point. I never thought of a Twitter as a place to house my 1-to-1 connections, although as a result I have had a number of them. To me Twitter is a new broadcast platform. Let me put this in perspective, I spent a year getting hundreds of readers to my Funnelholic blog (http://www.funnelholic.com/), 5 years getting 600 connections on LinkedIn, and a year getting 600 members to my LinkedIn group “Friends of the Funnelholic.” It took me 1 month to get 1,000 followers on Twitter and growing. My buddies in audience development are saying that blogging is dead and sites like Twitter is where it is at. From a promotional aspect, the 1-to-many benefits are great.

Whatever 1-to-1 communication that is lost will be picked up by someone. The Internet runs like a free market -- if there is demand someone will fill it. Facebook continues to have great 1-to-1 relationship capabilities, and LinkedIn has a ton of potential in this area.

As far as b2b marketing and social media, there is the promotional aspect I mentioned above. I can see marketing automation software watching b2b buyers’ social media behavior and incorporating this into scoring and sending customized, relevant tweets or messages.

Steve: Many B2B organizations are getting involved in social media, but as they do, the media shifts and becomes much more commercialized. There have even been recent reports of teens leaving Facebook. Do you think that there will be a clear distinction between purely “social” social media sites and sites where there is more commercialization as we evolve? Or will these lines remain blurred?

Funnelholic: First of all, I haven’t seen reports of kids leaving Facebook. All I see are kids (and by kids, I mean from preteens to 20s) using Facebook and using it ALL the time. I watch the twentysomethings in my office and they live in Facebook -- that is, message their friends, trade links and videos, sign for events, etc. In many ways, for that generation, Facebook is more important than Google.

Commercialization is the biggest problem for social media. For all the traffic and frequent visits, Facebook and LinkedIn should be making billions of dollars but they aren’t. And Twitter hasn’t even shown the market that they have any plan for making money (except probably by getting bought). In your first question, you asked about scale. To me, the ability to commercialize is the biggest impediment to scale. If these organizations can’t figure out how to make money, then social media can’t scale. So, the lines have to blur, but visitors will resist if their social media platform is ALL commercial. If anything, LinkedIn and Facebook have risen quickly for a lot of reasons, but one of them may be their ability to keep the spammers out. The trick: make money without intruding on user experience.


Steve: As marketers continue to refine their ways of measuring their success at the top of the funnel, will we see more standard CMO reporting on their successes (similar to the standard reporting that sales, finance, and operations usually does)? What do you think those CMO metrics will be?

Funnelholic: For the record, I believe marketing will always have fuzzy math. No one can argue that brand and thought leadership isn’t vital to corporate sales success, yet it will and always remain difficult to quantify. And furthermore, the fact that today’s buyer takes 29 touches before they buy means marketing will have to continue to perform a lot of activities that aren’t specifically recorded in ROI. An example: you “buy” a whitepaper lead from an online media source, you begin your marketing automation processes and after watching 2 webinars, talking to a sales rep, reading your blog, etc., it ends up becoming part of the pipeline. As sales is selling, marketing is still working in providing sales tools, pushing the latest article about the CEO, and so on. These are critical elements to one’s marketing department and not easily quantifiable.

That being said, I think the key metrics are:

1. Cost-per-opportunity. Opportunity means pipeline opportunity.
2. Total pipeline dollars created by marketing programs

By focusing on these two metrics, marketing has essentially done “their” job. If sales isn’t doing theirs (closing business), marketing should not be punished. Also, by focusing on cost-per-opportunity and pipeline dollars, it gives marketing flexibility to spend on important, but less-quantifiable, activities that are critical to the marketing funnel.

We can’t ignore ROI. By ROI I mean, marketing spend that turns into real revenue for the organization. The problem with is ROI is that marketers are at the mercy of the sales team. It’s one of the metrics that aggravates the “Sales is from Mars, Marketing is from Venus” dichotomy (http://www.funnelholic.com/2008/11/18/sales-is-still-from-mars-and-marketing-is-still-from-venus/). But I realize it is a reality, so if you must, keep one thing in mind: Time. If ROI is measured too early, than marketing will fail. This is the reason we put marketing automation into place in the first place is that buyers take a LONG time. (especially now). Nurturing has to be factored into ROI, so if you are watching ROI, make sure you watch it over time because it will grow.

What is most important is that marketers have moved away from the “look what I made” marketing strategy of judging oneself by beautiful design, copy, cool booth design at trade shows, etc. Those days are not over (as long as they convert), but aren’t the way to prove your value. The numbers are.

Steve: People still buy emotionally. As we push towards ever-increasing measurability of our marketing efforts, how do we avoid not investing in some of the marketing programs that are less measurable, but might generate the emotional hooks that motivate buyers.

Funnelholic: Well since the theme is social media, I will give this question a “LOL” -- laugh out loud, for the uninitiated. I talk about this above. Everyone assumes as a demand-generation guy, I don’t see the benefits of the entire non-quantifiable marketing mix. Well I do, and this why in the above I believe in creating metrics that can incorporate these types of elements. Here is what I believe every marketing department should have in place in 2009:

1. An optimized lead-management process: This includes humans AND marketing automation. None of your marketing elements will work as well as they should without both. So to recap, these are the elements:
a. A lead-qualification team: In place to convert and qualify leads before reaching sales
b. A marketing automation system: Designed to support the lead-qualification process with a coordinated nurturing program. (Nurturing in my mind begins the minute a lead enters your lead-management system.)
2. An aggressive lead-generation process: This is designed to feed the lead-management process and should include a diverse portfolio of lead sources. You should buy from a variety of different sources to feed your marketing funnel. Your ultimate gauge should be conversion and whether lead sources help you achieve your cost-per-opportunity goals not just CPL. These sources include online media sites, Google Adwords, and so on.
3. A diverse offer set: Offers support all of the processes above, and they include whitepapers, webinars, online video, etc. All of your prospects have different preferences for “how” they like their marketing, so make sure you have something for them
4. Branding and thought leadership support: Marketing departments should include blogging, social media, speaking engagements, and PR. By the way, there are marketing vehicles that incorporate a number of your marketing goals. For example, webinars are a great way to achieve all four goals above: quantifiable lead generation, nurturing, thought leadership, and branding.

I think trade shows should come out of the sales budget. They don’t drive leads and cost a lot of money. They are really good for face-to-face contact with current customers and to create business development deals. Print is dead, too, and shouldn’t be part of one’s mix anymore.

Steve: As marketers focus on responding to buyer interest at the top of the funnel rather than large outbound campaigns, the need for different skillsets in marketing is growing. Where do you see the biggest change in marketing skills/roles in the next 5 years?

Funnelholic: Metrics has changed every business in the organization and marketing is the big one. I have already seen marketing departments start to have more “geeks” in the organization. There are essentially three kinds of “geeks”:

1. SEO/SEM geek – Everyone has one now, and I don’t blame them.
2. Lead management geek – As the marketing automation revolution continues on, it has created a new role in the organization to manage these processes
3. Metrics geek – A lot of times, the person who does No. 1 or No. 2 above also does overall metrics, but the point is, a lot of organizations have a metrics and optimization functions now.

I’m using “geek” as a term of endearment here, by the way, not as derogatory. All in all, every marketer will have to be metrics-centric to survive. I am seeing more and more, consumer-focused Internet marketing folks getting jobs in b2b organizations because they can bring the type of rigor that is needed to be compete.
BOOK
Many of the topics on this blog are discussed in more detail in my book Digital Body Language
SOFTWARE
In my day job, I am with Eloqua, the marketing automation software used by the worlds best marketers
EVENTS
Come talk with me or one of my colleagues at a live event, or join in on a webinar

3 comments:

Adam Needles said...

I like that Funnelholic has brought it down to two metrics; however, I believe that these address cost/revenue=net profit implications of marketing programs and brand building, but not the asset/return side. There needs to be some nod to brand equity -- translated into real monetary terms (and not what the guys at Interband do, which tells us nothing).

Strong business and consumer brands mean something, and they mean that companies with strong brands don't have to spend as much on acquiring and nuturing leads. This has to be in the equation if we're going to get a full sense; it can't just be 'fuzzy math.'

I don't have the answer today, but I've been having this conversation with a guy named Tom O'Guinn, who is an academic that has spent a lot of time on brand community research.

I'm wondering if there is some way to quantify the strength of bonds to identify what the net result is when those bonds are taken advantage of. (Similar to the analogy in chemistry of splitting the Hydrogen atom -- if that were a brand, man it has serious equity when you go to use it.)

I'm sure you get the point, but we've got to take this into account when we build up our model; otherwise, it is not a complete model and will not help us make complex choices about the range of pieces we leverage in integrated marketing comunications programs.

Just some thoughts ...

Rob Leavitt said...

All great stuff in here. One other thing to think about, especially at the CMO level: we need to keep adequate energy on the "big M" parts of marketing.

I worry sometimes that we get so focused on near-term revenue generation (understandably, in times like these) that we underinvest in some key foundation pieces for building the business longer term.

Adam's comment about brand building is one of these key pieces; another is solutions development, which requires serious work on market and competitive intelligence, opportunity analysis (at the market level, not individual leads), and cross-business collaboration internally. These can be even harder to measure, and easy to downplay in favor of another lead gen initiative, but if we're not trying to sell the right things, it doesn't matter how good our campaigns are.

Anonymous said...

Will Facebook Connect be a cash machine?

step 1:
with facebook Connect, you connect to amazon.com through facebook
step 2:
when checking a CD that you like, you want to share it on your facebook profile -> it will show up on your Facebook page
step 3:
your shared link is now on all your facebook friends page :-). As your friends might like what you like and as they would think that you recommend this CD (it does not look like an intrusive ad), they would click the link and land on amzazon.com
step 4: facebook charges PPC to amazon

What do you think?
Would this work?
Will Facebook be Google next challenger on Online Ad market?

nicolas