Part 4 of 4: This is the last blog post of this series of 4, based on my latest interview of one of my longest standing clients. I’ve been working with Paul Smith since 2008 when his business, eTag, was still in start-up mode.
My agency Agility PR supported his growth right through the Great Recession and out the other side. We were still there through eTag’s acquisition by ASSA Abloy in late 2014, becoming the software offering within Traka Automotive.
I wanted to take the time to sum up 7 key learning points I gleaned from my conversation with Paul to close out this series. Here they are.
7 Key Learning Points
- 5% rule
5% Rule for marketing spend feels like a minimum when building awareness and educating the market. Paul Smith was averaging a marketing spend equal to six per cent of gross sales revenue during the period he was creating awareness of his product from scratch and articulating the benefits for those early adopters that were investing in it in their car dealerships. He also made it clear he would spend double that on marketing if he could have afforded to. But because he had no external funding that just was not possible.
What’s also interesting is that after eTag was purchased, although his marketing budget tripled as online and print advertising and advertorials were added, overall marketing spend progressively fell as a percentage of gross revenue as the business accelerated into early majority buyers.
That percentage spend actually halved from 6 to 3 per cent of total revenue by 2019. Interestingly, having done a good deal of reading on recommended levels of spend I’ve noticed a lot of business trade bodies advocate the ‘5% rule’ (i.e., five per cent of gross sales revenue). So, Paul’s original spend in that context seems about right when in start-up through to early adoption stages of growth and market acceptance.
Nevertheless, we are still living in a world where some salespeople and hard-nosed C-suite executives refuse to spend anything like 5% even when they are trying to create fresh demand for new products or even new product categories.
The salesman’s mantra might go something like ‘this product has to be sold; it’ll never be bought (without my expert skills in closing the deal)’. This thinking was always a mistake. However, in the digital marketing-led world, it’s an even bigger mistake.
Put simply if you don’t spend at least that 5% of sales revenue on a combination of your website design and content updates; SEO; marketing automation campaign building; creating great content for your key trade media and your website; as well as investing in online advertising in those magazines, and for propagating across social channels like LinkedIn, Facebook, and YouTube etc., you are not likely to be bringing enough fresh leads into your sales funnel.
You are also not likely to be engaging them with all that new content or appearing in relevant Google searches. You are hiding your light under a bushel and relying far too heavily on brand awareness and word of mouth.
That’s very dangerous at least until you’ve ‘Crossed the Chasm’ into the ‘early majority’ phase of market adoption (have a read of that famous business book first published during the dot com boom back in 1998 called ‘Crossing the Chasm’ by Geoffrey A. Moore for the detail).
2. Building Authority to Speak as a Peer (not just another Supplier)
Tech firms offering solutions aimed at specific sectors and looking to demonstrate their domain/sector knowledge need to build their authority to speak to decision-makers as a trouble shooting peer and consultant, not just another salesperson of another product.
Paul Smith makes it clear that the best way to build that authority was by engaging with the debates, pressures, issues, and obsessions of the market his business was serving. Work with the trade media and produce strong thought leadership content to articulate your views on industry debates. It’s important to have an opinion, ideally based on a sound reading of market dynamics.
It also helps if you are seeking to add value through providing advice on how best to optimise the solution you are offering. In this way you position yourself in everything you do as a consultant or adviser not merely as salesman plus installation company. Add as much value as you can as early as you can in the client relationship.
3. Start with the ‘Who?’
Great content starts with a really thorough idea of what types of people you are wishing to reach and engage. You need to understand what pressures these people are facing and how their concerns segway with what propositions you have ready to go.
Focus on benefits as well as explaining how the tech works to start with but then you need to build from there to build your own voice through thought leadership content. For many that involves running your own market research to find out what’s really going on in the market and then expose and respond to that unique insight.
4. ‘Future Vision’ provides platform for Thought Leadership
Agility PR helped him deliver these thought pieces around the evergreen theme of ‘The Future of the Car Dealership’ over a three year period, month in month out, to help build and sustain that authority. There’s clearly no doubt this was key positioning content for eTag and Traka Automotive over the years. It made those sales conversations easier when they happened. And it probably opened many more doors even if that link remains difficult to prove.
5. Measure Engagement Levels (not numbers of unqualified Prospects)
Start measuring marketing more effectively. Digital Marketing adoption has accelerated in the last year as all the big shows got cancelled and suddenly sales and marketing people asked themselves the question where are our nailed on sales leads going to come from in 2020.
In my experience the number of digital marketers being hired into technology businesses has been robust despite the downturn.
Marketing departments have turned to Marketing Automation suites, CRM systems and, in the enterprise technology world, to Sales Enablement to try to build their pipeline and build engagement with prospects without resorting to the old blunt instrumentation of cold calling. People hate the cold approach more than ever today.
Eventually and inevitably once the Pardot Engagement Studios are created and Crowdcast webinar series are timetabled, everyone starts to worry about the same thing…quality of content.
You need to be finding ways of measuring numbers of live prospects but also actual real-time engagement levels across all digital channels. You need to find out which channels and ‘events’ are working best to stimulate that engagement. The more engaged a prospect becomes the more highly qualified and motivated they are. The ones at the bottom of the engagement funnel are the ones you really can pick up the phone to.
6. Calls to Action & Stimulus to Deeper Engagement
In the world of Digital Marketing, you need to build Content Hierarchies which enable prospects to go with you on a journey into deeper engagement – essentially you need them to understand how you tick, what you are like to work with. Ideally they need to know you care about their issues and the upcoming challenges they are set to face. Build your content journeys and campaigns with this in mind.
“Calls to Action like the downloading of high value content (e.g., a White Paper) or attending your next webinar are indicators of engagement level. You just need to set up a scoring system which automatically alerts you when your latest campaign has generated a highly engaged prospect. Following a manual double-check, those hot leads can be passed to the sales team for direct prospect discussion and to see if a project is being shaped which you could pitch for. The dots are beginning to be joined up”.
7. Marketing as Ultimate Sales Enabler
My prediction is that in less than two years, it will be impossible for sales people to deny the effectiveness of marketing. That is if your marketing team are doing the right job and continually creating campaigns designed to bring fresh sales leads into the sales funnel and move existing prospects through your engagement journeys. Your content remains the grease that keeps the digital marketing machine churning out those qualified leads, campaign after campaign.
Paul Smith, like all of my clients, instinctively or very deliberately, are predisposed to sell their products and services in a consultative way. In short, they do not sell technical features but business benefits which are hard wired into their understanding of the pressures decision-makers inside their customers are facing now, or planning for in the near future.