The Longevity of Fun in B2B Social Media

If there’s one thing that B2B marketers seem to be hesitant about it’s having fun in their marketing efforts. For some reason, even though we know that nobody enjoys reading boring and dry marketing collateral, and absolutely no one will share it with their friends, we still resort back to creating that style of content.

We would all agree that fun content is more shareable, and infinitely more likely to go viral. However, the one factor of fun content that is often overlooked is its longevity. Fun content has a habit of being discovered, and rediscovered many times, and each time can lead to another Tweet, another Facebook post, or another share, continuing the cycle.

As evidence, I want to share data from one of our not-so-recent campaigns, called The Conversation. It’s a fun, interactive exploration of marketing, the challenges we all face, and the odd things we all do to engage our prospects and measure our results. The great thing is how little it was promoted compared to the results we saw.

The campaign was launched over a year ago, and you can see a spike in leads driven by a promotion of it that we did in January. However, the campaign continues from there, generating a steady flow of leads every day since then. The campaign has been picked up numerous times including a recent Forrester Groundswell award, and you can see from the chart that it shows little sign of stopping.

To be clear, the fun and the humour in this campaign is tied directly to the solution it is here to promote, but in an entertaining and non-salesy way. At the end of the campaign, a marketer can choose to connect with us or not, there is no requirement to fill in the form. (this chart measures the actual leads created as someone interacts with the campaign, and at the end decides to connect with our sales team for further discussions)

However, in taking a message from product and solution, to fun and entertainment, an interesting transition happens. Being fun and entertaining forces us as marketers to connect with the actual people and personalities who might buy our products. This is not the idea of taking a “feature” and spinning it into a “benefit”, it’s much deeper than that. It’s about understanding what motivates, frustrates, entertains, inspires, and irks the people we are hoping to engage with. To do that, we end up creating a message that has a longer shelf life than the latest release, or an interesting capability.

Humor and entertainment lasts longer than features and benefits because it is about people, not about products, and people don’t change as quickly.

What makes a person smile, laugh, or think today will likely make them smile, laugh, or think a year from now. Connecting with buyers on a personal level makes your message not just more shareable, but also more long lasting. After seeing David Meerman Scott speak at Eloqua Experience this year about the concept of a World Wide Rave, and seeing this data from an actual campaign, I’ve become more convinced that we as marketers need to revisit how to add humor and entertainment into our B2B marketing campaigns.

Oh, and make sure you watch The Conversation - it's a lot of fun.

Marketing Automation and B2B Marketing Predictions for 2010

It’s coming around to that time of year again when we all offer up predictions for what the coming year will offer. As with any of these, it’s a guess, and entirely my own opinion. Here are some of the trends and changes I think we’ll see in the coming year. If, at the end of the year, it turns out I guessed right on a few of these, I will be happy.

Overall Prediction Trend:

Buyers continue to gain control of their own buying processes, and marketers respond by building "revenue engines" to understand, facilitate, measure, and predict these buying processes.


1) Data is Free, Relationships are Not: As contact data becomes more and more available, approaching free in many cases, the value of the relationship will increase. As part of a continuing trend, the ability of your audience to block, prevent, and ignore communications that they don’t desire will increase, with reduces the value of the data (who they are), and increases the value of the relationship (their perception of you). Marketers who think this way, and truly work to provide valuable information to their audience, will do well.


2) Relationships, Education, and Nurturing: The trend in data becoming free (prediction 1) will work in parallel with a trend in information, of relevance to buyers, being expected to be free. Buying relationships will be more and more built on a foundation of buyer education, and the B2B organizations who can educate and nurture prospective buyers over time, without annoying them will win. This means an investment not just in the rich educational content, but also in systems to automatically understand buyer interest and deliver (or have discovered) educational content appropriate to the buyer’s next step.


3) A Degree in Marketing Engineering?: As marketing shifts towards a discipline whereby prospective buyers are understood based on their behavior, and the right content, according to where they are in their buying cycles, is delivered, marketing skills become more operational, process, and data oriented. Marketing hiring will swing towards backgrounds that have these data, operations, and process skills more so than copy and creative skills. Marketing education likely won’t change in this regard during 2010, but the initial discussions will start.

4) Mobile Thinking vs Mobile Devices: Every year in living memory has been talked about as the year that mobile will become big. I think that this coming year will finally see that claim begin to disappear. Sort of. Now that various devices such as the iPhone, are truly able to support a rich, interactive, graphical environment, interacting with your audience in places where they are mobile becomes very possible, but the device, and mobile-specific technology, almost becomes irrelevant. Thinking about what will motivate an audience to act, when they are at a show, see a poster, or are at a venue, how they can connect (text message, or short URL), and what the interaction should be will become part of many B2B marketers’ thinking. Specific mobile technologies, however, will not move beyond niche applications.

5) Brand Promise/Reality Gap Reduction: The trend that social media kicked into high gear in 2009 will continue into 2010; any organization that has a significant gap between their brand promise, and their brand reality will have that gap mercilessly exposed through social media and community-created content. 2010 will see aggressive adoption of basic listening techniques by marketers in order to understand where they are falling short. The gaps here will lead to a much broader discussion of what “brand” means to a B2B organization, that goes beyond logos, taglines, and colors.


6) Marketing Owns The Brand: 2010 may see some very early reshuffling of the decks in terms of what Marketing owns. Social media (prediction 5) will broaden the discussion of “brand” from logos and taglines to the full offering including service and product. A few very early examples will arise of organizations in B2B who have changed their definition of the Marketing team to truly provide them with greatly enhanced ownership or influence into the product/solution areas of the business as well as the services areas around it, as those are both critical to overall company brand and reputation. We likely won’t see mainstream shifts in this ownership until 2011 or beyond.


7) Follow me, Friend me, or List me: in 2010 we’ll see a dramatic shift in the definitions of influence in social media as we move from raw counts (like Followers or Friends) which are almost entirely ignorable, and to a model that comes one step closer to true influence. Each social media site will implement things differently, but an “inner circle” model of people who one actually pays attention to, versus just being a connection, will rapidly grow in relevance. Social media sites that do this well will balance the need for public awareness of how influential a person is (how many inner circles, they are part of) without making it so public that it is widely manipulated or gamed (like Twitter follower counts, for example).


8) Information Discovery Measurements: As marketers begin to cede control of the messages they push out, and begin to act more like publishers without assuming control of the distribution, they will begin to look for measurements of information discovery as their key driver. How, where, and from whom, did an individual discover information relevant to key stages in her buying process. Rather than measure individual outbound campaigns, measuring the likelihood of individual messages to be discovered, ideally through sharing and forwarding, will become more key to marketers.


9) Social Activity, Lead Scoring, and Lead Nurturing: As buyers begin to get more and more of the messages, information, and education through their peers, and through social media, these channels will quickly grow in their relevance to lead scoring and lead nurturing approaches. Awareness of how an individual discovered a message, where, and from whom (prediction 8) will feature very prominently in the lead scoring and lead nurturing routines of leading marketers.


10) Digital Body Language vs. the Discovery Call: As buyers gather most, if not all, of their early information (prediction 2) on the vendors they are considering speaking with online, the role of the salesperson’s “discovery call” shrinks and changes. In 2010, in sales organizations, we will see a rapid recognition of the new reality that buyers are less willing to take an initial call from a vendor salesperson with an assumption of only exchanging basic information. If sales people want to engage with buyers they will need to read buyers’ digital body language, and ensure that they are able to add more value than Google on the initial sales call. If sales teams do not have access to this information they will begin to push their marketing teams to provide it.

11) Measuring the Revenue Engine: As the above trends evolve in 2010, marketers will begin to develop their ability to predict revenue trends well in advance of sales, by measuring and analyzing the overall revenue funnel. Marketing leaders who can do this will become among the most strategic executives at the board room table.

What do you think? Are these predictions likely to happen? I look forward to your thoughts on these.

Predicting Revenue through the Marketing Funnel

Predicting revenue is a difficult task for any organization, and it has historically been only attempted in the sales organization. With a buying funnel modeled from the top of the funnel, however, it is possible to begin understanding whether there is enough in the marketing funnel to support the desired and planned revenue goals.

For each stage in your buying process, based either on best-in-class metrics or your own historical results, you can look at two key metrics; the ratio between how many leads enter a stage and how many progress beyond it, and the average time in the stage for those that do progress beyond it. Note that it is critical to have leads degrade from a stage after an appropriate period of time. Without this, your calculations will be misguided as you will be basing your numbers on leads that are no longer sufficiently engaged to be accurately counted as part of that stage.

From there, with the conversion rates known or approximated, simply work backwards up the funnel. If your average deal size is $100,000, and you need $10M in revenue, then you need 100 deals. If the Sales Accepted Leads (SALs) close at a 10% close rate, that’s 1000 SQOs. With a 40% conversion rate of SALs to SQOs, this means 2500 SALs.

In order to create those SALs, sales need to be provided with MQLs that they accept. With an 80% acceptance rate, this means marketing needs to create 3125 MQLs. If the Interested Inquiry to MQL ratio is 10%, that means you need 31250 Interested Inquiries in order to make that $10M number.

However, time is an important element of analysis of the marketing funnel. If it takes, on average 2 months for and inquiry to become an MQL, a SQO is only created after a few initial calls, taking on average 1 month, and the sales process takes 3 months, those 31250 Interested Inquiries will not convert into $10M in revenue for 6 months. This is obviously a very simplified example, but the importance of taking time into account cannot be underestimated. The more your model of the buyers’ buying process evolves to include multiple stages, the more insightful this analysis can be. Seeing gaps in the funnel early can give you insight into revenue shortfalls many months in advance.

It’s important to note though, that is is only a model for deals that are generated by marketing. If you have a partner channel generating deals on their own, or your field sales team generates their own opportunities, this revenue will be over and above the revenue modeled with this calculation.

Marketing Analysis: Foundations for Great Analysis

One of the most commonly cited benefits of implementing a marketing automation system is the opportunity to improve your organization’s ability to analyze marketing effectiveness. This is indeed possible, and provides a powerful advantage to organizations who are successful. However the final outcome of great marketing dashboards rests on a strong foundation of data. Ensuring that the data you need is available, cleansed, and normalized is critical to generating the analysis you need.

In evaluating a marketing automation software investment, it’s crucial to look at this overall stack and ensure that you will be able to access the right sources of data, keep that data clean, and then build an analysis framework on top of that. In this post, we’ll look at the key foundational elements of good analysis.

Data Sources:

The first part of this foundation is having the data that you need. Without the right data, analysis is impossible, so this forms the first key area to evaluate, even before looking at any reports or analytics. The following examples give you a sense of the types of data you might need available within your marketing automation system in order to perform certain types of analysis:

Product Purchase History: an analysis of whether individuals who bought product A are more responsive to messages about product B, or product C, would require you to integrate and store information about product purchase history within your marketing automation system

Social Media Effectiveness: understanding the effect of your social media efforts on buyer behavior requires you to track all key social media interactions with both known and unknown web visitors, and associate them back to purchase activity

Offline Activity: analyzing the effectiveness of offline activities, such as tradeshows or lunch seminars will require you to capture and track that information (registrants and attendees) within your marketing automation system

Each of these data sources is continually changing, so in thinking about your marketing automation choice, you’ll need to ensure you have the needed integration capabilities in order to get any data that resides in external systems into your marketing automation platform.

Data Quality:

The next foundation for marketing analysis is data quality. By this, we mean the ability to manage duplicates, cleanse, and normalize data. As marketing data is continuously touched – by web forms, list uploads, event registrations, and white paper downloads – it is imperative to have a process in place to manage this data quality inline.

Some key aspects of data quality that can affect your ability to effectively analyze your marketing efforts are:

Duplication: identical or similar records of individual contacts or accounts need to be identified, matched, and merged. Without this, any measurements of lead count, campaign response, or segment size will be inaccurate or misleading.

Completeness: in many cases, the data in a marketing database is not complete. Records may be missing values, or the data in them is not up to date and accurate. If analysis relies on these field values, it will not be effective until that data is available. The ability of your marketing automation system to do progressive profiling, and gradually add needed data to contact records is crucial in ensuring that you have the needed data completeness in order to properly analyze your marketing effectiveness.

Normalization: Data within a field, such as title, role, industry, or geography must be normalized to standard values in order to effectively analyze it. For example, if analyzing the effectiveness of a campaign in driving response from senior executives, if job titles are not normalized, and “Vice President” is written as “VP”, “V.P.”, “VP of”, “Vice Pres” or “Vice President”, your resulting analysis will be almost impossible.


Great marketing analysis rests on a foundation of great data. The ability of the marketing automation software you select to obtain the needed data, and maintain it in a state of continuously improving data quality is key to your success, and should be a key part of your analysis in making your selection.

Data Management and Marketing Automation - Video

In order to successfully move beyond the most basic drip marketing, it’s crucial for B2B marketers to effectively manage the data that they are working with. There are two main reasons that data has become more critical than ever before. First, it is with us for longer. As we engage with our prospective buyers earlier in the buying cycle, and nurture them throughout it, we are using the data for longer than ever before. Secondly, as we work to use marketing automation software to understand buyers, and then communicate with each buyer based on his or her unique needs, we end up using the data for various rules and automated systems.

When data is used by a marketing automation system for rules or automated systems, it needs to be clean and consistent. For example, in building a lead scoring algorithm, defining a target segment, or reporting on results, it is crucial that a title, an industry, or a country is represented in a consistent way so no contacts are missed.

In this quick but instructive video, Chris Petko, Eloqua’s Director of Marketing Operations talks about how we at Eloqua manage data, and how it is captured, cleansed, and analyzed. Chris introduces his 3 C framework and gives some great recommendations on how best to manage data as a marketing organization:



(if the video above does not load, please click here to watch Chis speak about marketing automation and data management)


Chris also discusses the Contact Washing Machine concept that automatically manages each and every data touch-point, and ensures that the data is cleansed and normalized. Chris discusses why this must be done inline, rather than as a one-time manual effort, given the way in that marketing data is continually updated via web forms, list uploads, and data flowing from other systems such as CRM.

I hope you enjoyed watching the video, and found Chris’s experience useful in your marketing operations. As someone who deals with marketing data on a daily basis, Chris has a lot of experience in exactly what aspects of data management matter, and how to approach it.

Sales and Marketing Alignment: Operational Challenges Might be a Good Sign

I often get asked how one measures success in aligning marketing and sales. Alignment is a fairly fuzzy concept, so it’s hard to find a definitive metric to look at in order to determine alignment. However, there are some very interesting signs of great progress that I have seen a number of times that are worth highlighting. One of those signs is when the different operational styles of marketing and sales become an observed problem. That is actually a symptom of growing alignment between sales and marketing.

What does that mean?

Sales and marketing are very different organizations with very different natural ways of operating. Marketing, even in forward-leaning organizations that have invested heavily in lead nurturing, is often organized around campaigns or events. Sales, being very much a people discipline, is organized around sales people’s time.

This operational style become very apparent when your sales and marketing teams become very closely aligned around the sales lead handoff process. In this process, leads from marketing are handed to sales for follow-up, and sales calls in to those leads to engage with them and work towards an opportunity. However, the natural propensity of marketing to run campaigns or events, which generate a point-in-time spike in leads, begins to conflict with the sales team’s ability to follow-up on those leads, which is governed by the number of sales people on the team, and the number of hours in a day.

It is usually very difficult to make instantaneous adjustments in the number of sales people available to call hot leads, and the number of hours in a day is even more difficult to adjust. This leaves a challenging disconnect. As we’ve addressed earlier, the ability to connect with leads successfully is very dependent on the speed with which you follow up, so this disconnect has significant implications on sales success.

If a marketing campaign generates a spike of marketing qualified leads on a Monday, for example, and those leads are passed to sales, there will likely be an overwhelming number of leads for that Monday. The calls will spill over into Tuesday, and Wednesday, where the sales team will face declining success rates due to the elapsed time, and by Thursday, the sales team will be out of leads.

A far better solution would be to “throttle” marketing campaigns so that a more steady stream of leads flows to sales. Not all campaigns can be throttled, but many can. If there is to be an outbound email marketing campaign that generates leads, it is better to split it into 5 equal sections and spread it over 5 days than it is to send it all at once. Not only will the sales team not be overwhelmed with leads on one day, but the increase in successful connections they make will keep them busier with the same number of leads as in the original scenario.

When marketing and sales begin to get more closely aligned, the operational differences between the two groups become more apparent. Many of the challenges your teams will face in shifting their operations to be better in synch are actually signs of a growing level of alignment.

Social Media Buzz at a Live Event

We just finished up Eloqua Experience 2009, which was a spectacular event all around. Marketers from around the world came to celebrate success, and we filled three days with great discussions, fabulous speakers, and new connections among the best marketers in the world. One of the aspects of the event that we were most excited about this year, however, was the concurrent online conversation and tremendous buzz that the event generated in social media. I was asked many times what we did to have that much social media buzz at a live event.




Of course there is no way to “manufacture” social media buzz at a live event, you have to have great content and things that people will talk about, but there are a few things you can do to facilitate and encourage the buzz.

In planning for the social media aspects of the event, our team used a 6 element framework:

Pre-Event Awareness

In order to ensure that everyone was ready to participate in the social media discussions at the event, we ensured that the pre-event communications began to seed awareness that there would be a strong online conversation. A Twitter hashtag (#EE09) was agreed upon by the events team over a month in advance, and was used consistently in any discussions of the event or tweets about it.

In order to ensure that the people most actively engaged in social media were well aware of the event’s social media elements, we spurred discussion of it in all relevant social media properties. A competition on the Eloqua Facebook page was created, with a Kindle as a prize, and that competition was then blogged and tweeted about, reinforcing the hashtag, and building awareness of the social media elements at the event itself.


Enablement

At the event itself, every effort was made to ensure that participants were able to join in the social conversation, and felt very comfortable doing so. As an obvious step, wireless access was available to all. However, often it is the more subtle social cues that help the most. Having a few of your own team with their laptops very visibly open and active at the keynotes and in track sessions communicates the message that it is okay to have laptops and cell phones out during the sessions.

For bloggers, a simple step is to have all relevant material that they might possibly need in order to blog about anything they saw at the sessions readily available to them. A blogger marketing resource site is a great way to do this, and we made the URL known through distributing business cards at registration with the URL clearly visible.


Encouragement and Bridges

The next step was to encourage people to participate and build a bridge between the conversation happening face to face at the event and the conversation happening online. In the main campground area, a large screen (the Tweetboard) was created that showed a continuous rolling feed of the online conversation and built a "bridge" between the online and offline conversations. Anyone nearby could immediately see the conversation that was happening and was encouraged to join in. (we'll be coming out with detailed instructions for how the Tweetboard was built very soon)

Each keynote then included references to the online conversation – the opening session with Eloqua CMO, Brian Kardon even presented the hashtag in letters over 8ft tall so there was no confusion. Subsequent day sessions each attempted to include a reference to a comment or observation that had been picked up online, continuing to drive awareness and participation.





Destinations and Discussions

Beyond the session content itself, the team worked to build a number of relevant destinations and discussions in order to keep the online conversation vibrant and flowing. These spanned many major social media properties including Facebook, YouTube, Blogs, and Twitter, and ranged from video channels to online contests. Each social media property then referenced the others, ensuring a continuously self-reinforcing cycle of discovery and engagement.

The vibrant Eloqua partner community was also engaged, and a number of contest, giveaways, and events added to the buzz and topics of conversation. As a few examples, a RockBand competition accentuated the “Rock Star” track theme, and contributed a lot of photos, and a creative Bingo game all done via a combination of marketing automation and text messages drove a lot of excitement and engagement.


Seeding

Even with that, ensuring that every track session was covered and not left out of the online conversation led to a careful “seeding” strategy whereby staff members were present in each session and would capture at least one or two salient points or quotes from the speaker if there appeared to be fewer active social media people in that session than expected. In most cases this turned out unnecessary, but formed a good starting point and fall-back strategy.


Post-Event Engagement

Ensuring that the rich social media buzz and engagement was not limited to the event itself, a series of post-event social media communications was planned to keep the engagement level high. Winners from the 2009 Markie Awards were first posted to this blog, pictures from the event will be streamed to Facebook, and videos from the event will continue to be presented on the YouTube channel.





Of course nothing is more important than interesting, cutting edge, and engaging content, but this 6 element framework helped us create one of the most talked about Marketing events of the year. 1000s of tweets, photos, videos, and new connections drove the community’s engagement and excitement higher than it would have been for those at the event, and allowed those not able to participate to have a better sense of the event without being there.

I hope this framework is helpful in planning your events, and if there are techniques you used to drive even more interest and engagement please do share in the comments below.

Winners of the 2009 Markie Awards

It was a great night last night in San Francisco with the Markies awards gala being the show highlight at Eloqua Experience. The competition was intense this year with submissions from all sizes of companies, all industries, and all regions of the world.





Congratulations to the winners, to the finalists, and to all the marketers who created great campaigns, deepened their alignment with sales, or achieved new heights in their analytics.


Sales and Marketing Alignment Award
For their work in providing their sales team with buyer insights, based on their online activity around Meridium’s annual user conference, that drove both new revenue and a new relationship between the sales and marketing teams:
Meridium


Marketing Center of Excellence
For a marketing operations center that smoothly handles the communication around over 10,000 products serving scientists and engineers in over 30,000 customers:
National Instruments


Most Creative Marketing Campaign
For their “I want my hour back” campaign at the change of Daylight Savings Time to promote their telepresence solutions:
Tandberg


Best Lead Nurturing Program
For a lead nurturing program in the ultra-wealthy set that not only decreased costs, but grew revenues in one of the most difficult economic times for luxury real estate in memory:
Exclusive Resorts


Marketing Visionary Award
For a worldwide implementation across all geographies and product lines, simultaneous with a worldwide implementation of their CRM platform, in record time:
NetApp


Best Customer Lifecycle Program
For a campaign that onboarded users, nurtured their adoption, and grew the usage of their loan origination platform:
Ellie Mae


Best Lead Scoring Program
For a picture perfect implementation of the Sirius demand waterfall that allowed a lead to be managed from first contact through to sales and through to close:
Omniture


Social Media Marketing Award
For a “Willy Wonka” style campaign that developed significant word of mouth and enable the rebranding of the TD Banknorth Garden to the TD Garden:
TD Garden


“Getting to Know You” Award
For a deeply personalized Flash campaign that presented a highly personalized and highly interactive experience to the VMWare audience:
VMWare


Eloqua API Connect Award
For a deep integration between their free trial process and their marketing database that allowed marketing campaigns to trigger off of actual user adoption and behavior:
Bomgar


Best Channel Marketing Award
For a great campaign called Let's Talk Business that allowed channel partners to manage fulfillment of Point of Purchase materials. In doing so, it not only reduced fulfillment time by 99%, bu also provided much richer visibility into the channel and ensured up-to-date information was being used by partners:
Intel Australia


Sales Impact Award
For implementing an end-to-end, metrics driven process that allowed their CMO to understand the exact flow of leads prior to sales, and to adjust resources accordingly, resulting in both cost efficiencies, and a significant uptick in qualified lead flow:
Infoblox


Marketing “All-Star” Award
For all-round excellence in marketing, across all categories:
NIIT (USA)


Congratulations again to all the winners, and I'm looking forward to seeing what next year's Markie gala brings

SaaS, Social Media, and the Economics of Smart Buyers

There are a few trends in the industry that are worth commenting on in that they relate in a very interesting way.

Economics Shifts towards Renewal/Retention: Software-as-a-Service and subscription-based revenue models in other industries have shifted the economic weight away from the upfront sale and towards the renewal in those businesses

Information Access becomes Free: The information resources available on the Internet have put buyer education in the hands of buyers, allowing them to educate themselves more easily than ever before.

Brand Reputation Control Shifts to the Audience: Social media has taken brand reputation out of the control of marketers and into the control of the audience, both in terms of good reputations and bad reputations

So, what is interesting about this? If we look at this from a purely theoretical standpoint it begins to become clear why it is the right strategy to begin to freely provide education, insight, guidance, and help to the audience at large through social media.

Looked at simply, the social media investment we make in providing guidance, best practices, pitfalls to avoid, etc, is an investment in buyer education. It is not a direct cash investment, in the same way that we historically would have made large cash investments in marketing campaigns. However, as anyone involved in social media knows, it is a significant investment in time and energy. Many times this investment of time and energy comes from key folks within your organization.

Buyer education can be a double-edged sword. More knowledgeable, sophisticated buyers know what they are looking for, they can easily determine what is right for their business, and what capabilities they do and do not need. They are more able to look beyond flashy demos and slick brochures and dig into less sexy things that will really matter; service levels, community depth, ability to map to their precise business process. This can wreak havoc on businesses that focus heavily on selling at all costs, as it allows customers to only purchase what is truly going to fit their business, and avoid surprises after the sale. However, customer satisfaction among educated buyers is generally much higher as they avoided these post-sale surprises and bought solutions that were well fit to their needs.

Customer satisfaction makes more sense the more your business is dependent on retention. If your business model is based on a one-time sell, with a single up-front payment, you are much less tied to customer satisfaction than if your business model is based on a long-term, recurring revenue stream. Software-as-a-Service (SaaS), and many recurring revenue model businesses are well aware of this. Whereas in the historical, on premise, model of software sales, post-sale surprises were the norm, with SaaS, they have a much higher economic cost to the vendor.

Social media acts as a magnifier on this effect as it puts control of brand reputation squarely in control of the audience. Products that do not deliver on their brand promise are quickly discovered and communicated, whether through structured reviews, such as in the travel industry, or one-off efforts, such as the United Breaks Guitars song-writing crusade.

An investment then, in the product itself, becomes the best marketing effort that many organizations can make. With this, I am referring to the whole product experience, including the service elements around the product and after the sale. We’ve seen many examples of this, with Frank Eliason at ComcastCares and Tony Hsieh at Zappos being among the more prominent examples.

Looked at from a high level, there are two very distinct cycles. In today’s businesses, with a reputation is easily shared through social media, and many with revenue models that are recurring, it makes the most economic sense to invest in educating buyers and in the product experience itself. This way, although you may end up with slightly fewer new customers, due to educating some in a direction that does not indicate that they have a need, you will end up with more satisfied customers over all. Contrast this with a historical model, that was dependent on a flashy demo, and great marketing, but not satisfied customers, the investments would be in significant marketing promotions and demo-friendly features.

In today’s market, especially in SaaS and subscription-based businesses, the recipe for success has changed, and it has done so based on the underlying economic drivers as much as anything. It is a change that is for the best as it aligns the interests of software vendors and software purchasers more tightly than they ever have been aligned before.