Marketing Science Strategy for SMEs
Business is simple. Good product, cash in the bank, steady cash flow, growing sales and profit margins.
Dr. Ian Birkby and Alex Cairns discuss the simplicity of running a business well.
Welcome to another edition of the marketing science podcast the podcast for sales and marketing professionals working within science engineering and health care don't forget to subscribe on Spotify iTunes or wherever he usually listen to podcasts my name is Frank Barker the head of marketing at eight zero network where you can also subscribe and I'm joined by not just one but two guests this week with Dr Ian Birkby, the CEO of AZoNetwork and Alex cans MD of Move Marketing, a full service B2B. marketing agency.
Thanks Gents for joining us doing today, so without further ado I'd like to jump straight into the first question and draw your experience of being in the notable position of pre dating the digital era but also having the experience of working right through the digital era to the present day and seeing how do you see the change in marketing strategy for SMEs?
Well, despite the fact the indicating that my working career services in the era of horses and carts Frankie I will give you my the best position on that
IAN: I think the key thing in terms of how it's changed since ninety five when Netscape came out and the internet era started, is the ability to measure what you achieve with your marketing efforts. So in the digital age it is relatively easy to measure the impact of the various campaigns and from that to calculate the return on your marketing investment - now I’d counter that by saying we are possibly getting to the stage where some people like to measure too many things and starting to get lost a little bit in the numbers but for me it's the ability to quantify the performance of the campaigns.
Franky: Okay excellent, Alex so you've you're in a full service B2B. marketing agency having worked with both client and agency side for lots of multi nationals, so you’ve got a real mix of experience Ho have you seen the transition.
Alex: I’ll echo a lot what Ian says, data on 2 aspects - because we use a lot of data for market analysis; market research in the planning phase as well so not just the campaign data which is invaluable but also the research phase for the data in terms of putting together marketing plans that give you a one to three to five years focus.
The other big change since 2000 is that we now have channels so it's not just a service, supply through digital channels which we can actually pick and choose from a makes amounts according to requirement so there's a lot more to you and almost test as they say something.
Franky: Okay and having worked with lots of different clients for your agency what's the biggest challenge, what’s the most common or the greatest challenges that you see that your clients having from a marketing perspective.
Alex: I think it is the data interpretation and insight because it is a fantastic thing having all of the data of but it's not a given to know how to use it and spin into an achievable set of objectives and actions so that's when we get involved.
That depth of our experience and expertise in how to use and interpret that data across multiple channels but a lot of the science industrial sectors don’t specialise in understanding data and certainly statistics is obviously not the course specialisms
Excellent so Ian using data and statistics as marketing challenges would you echo that?
Absolutely I think you know from our perspective as a as a business we've invested heavily in building an analytics platform over the last six or seven years and prior to that we would say to our clients we've driven several thousand visitors to your site - they'd say great thanks very much but they couldn't attribute those visitors to specific actions in terms of products sales and market sector activity so yes if you can use that data to genuinely prove R. O. I. it's a massive plus point.
Franky: All the way from campaign original source campaign all the way to revenue generating opportunity yes
Ian: I mean as you well know we quite often gets into this discussion about you know was it the last touch that really made the difference and if you're on the sales side of life you probably gonna say it was your involvement that all was actually not firsts %HESITATION campaign that first email campaign that was marked his responsibility so yeah always an interesting debate that will Frankie's you well know.
Franky: Let's not get stuck into aligning sales and marketing just yet the whole point just in itself.
Fantastic all right so in which ways does B2C vary to B2B in specifically reaching scientists and engineers how have you found that is different.
Alex: Today certainly there are a lot more the applications the market for a lot more nature a lot more difficult to pinpoint
Its really trying to appeal to the types of individuals and job titles that you've got within its scientific and industrial sectors so everything to enhance the credibility or proof that products or a service works as without the case studies white papers and anything this credibility building on that side is usually a better way to go and they stop and it’s much more much more different approach and be to say where you can really just pick up on a sounder craze that's going on around them I'm going to campaign on the box about us a little bit less considered in a little bit less than actually less scientific.
Ian: I think maybe just to add to that one from getting the other factories with the with database quite often the price points are significantly bigger on the sales side please significantly longer. So to a certain extent if you're in the business of content marketing you need to be writing content that satisfies all stages of the buyers journey. Whereas in B2C you know if you've got a ten pound product you can put a note out on Instagram and you could probably sell it the same day where is but a lot of our customers the sales cycle can be six to nine months more involved.
Okay so on that what is the longest sales cycle, the longest time you have seen a sale from initial point to close.
If I go back to most manufacturing days when I was involved in the business of manufacturing ceramics we could be talking to a client for nine months before you get specifications correct, you have done some testing - for a lot of our clients if you are selling a million dollars with the kit you know a year's worth of discussion is not unusual.
Franky: We ran a survey where fifty one percent of the managers said they had a sales cycle between three to twelve months and there's very few who have got less than three months and considerably more than that have got more than twelve months - you find the same Alex?
Franky: It definitely makes everything from forecasting, business planning, cash flow makes lots of stuff much more difficult with long sales cycles.
What are the key questions that SME science or engineering company should be asking when it comes to strategic planning, Alex?
We typically take a five step approach in terms of how we walk a client through the planning process. So always starting with what they're actually trying to achieve in the first place that's most fundamental thing involved. Then taking a look at a market analysis researching what's actually going on in the market, understanding competitors, what their position statements are and the marketing techniques they use and how tat stacks up openly in the marketplace and figuring out value proposition a message sounds like an obvious one. You’d be surprised how many twenty thirty forty million pound plus turnover companies that I walked into the really have not got that value proposition or a couple key phrases. Then the fifth one is a little bit more involved obviously so it's really pulling a lot together through the available channels and budget and timescales and also setting smart objectives to sit alongside all of that.
I know you've done some great work helping us with our own strategic planning as well so thank you So, next question: How has the internet levelled the playing field for David versus Goliath over the last twenty years?
Ian: I got into this game with AZoNetwork in early two thousand and it was very different then.
On the internet, you've got the same amount of screen space as a billion dollar market cap company. So one of the phrases adopted fairly early on was that it doesn't matter where you are found on the internet, it just matters that you are found - it became much easier as a small business to make a significant impact via the web than previously.
It has passed over from kind of publisher to client, that end user, the company the manufacture. It's really just the expanse of channels but also the time that it takes to execute campaigns in the market - so twenty years ago it could have taken three to six months writing, planning a campaign which could be done in a morning these days.
Franky: Do you have any benchmarks for how an SME science engineering company would define a marketing budget?
Alex: There are standard industry benchmarks out there in terms of percentage of turnover that kind of thing but we typically shy away from not more the fundamentals of individual revenue lines for the company, profit lines, profit margins for products and what the channels available with us we try to make it more small bespoke.
You can't really tell you when you call us at five or ten million pounds and over estimate engineering companies don't just tell you to nominal five or ten percent turnover inside dies the amount to spend %HESITATION marks in.
It doesn't really fit for every every single every single kind so we tend to look at the big picture okay the competitive so they're up again so for example we go offline and we're just tossing starts with recently that they chose to compete against and two major multinational blue chips now it's not gonna be feasible to put in the same kind of purchases they will so looking on the much more Avenue case by case basis across four to five channels now we can actually get towards a level playing field among the big stuff in a level playing field against close it's become really be small about the white invest stocked up with Joe's wells announcing.
Atlassian, when they started, I think for the first of six to eight years and they didn't really have a marketing budget for their product which was a collaboration tool for software developers.
Predominately it was a low price point thirty dollars which sold by word of mouth in the in the development community so they had a very low sales and marketing budget.
On the other hand, you've got outfits like uber for example with very big marketing budgets who are effectively buying business - how long can they continue to do that? It’s an interesting business case study - So I think it really comes down to what is your products and what are you trying to achieve?
What do you find is the appetite for risk in in marketing specifically from the sort of C. suite and how have people get being given license to try things?
It’s low to be brutally honest, when I was client side running very big blue chip budgets for some big international companies it was still quite low even ten fifteen years ago as well
That’s why strategic planning is so important from my perspective it gives some validation that the C Suite board of directors can actually sign off on. When you cn see the analysis and the data
for will give us an investment for the opposite ways process without any kind of analysis or just kind of an off the cuff approach they're not going to really stop those kind of budgets – overall a low outside for absolute risk in these sectors
Franky: Do you see lots of companies using the data to justify the marketing spend or is it still a bit more gut feeling?
I think it's becoming increasingly data focused - you still see some dumb comments that come out like a why are you going to this particular exhibition, well because our competitors are there. It doesn’t really justify that activity. We're in an age where at least the Google Adwords has worked as part of the marketing spending on Google. I'd be a fool to sit here and say it doesn't work, it obviously does.
However one of the things that we see with people setting up Adwords campaigns is that we did it eighteen months ago and it was Jack who's in the I. T. department… they just set and forget. They don't even realize that they're actually now wasting fifty percent of the budget on keywords which aren’t delivering for them. So I think there's a there's a lot of slack in the marketing activity but businesses really need to recognize that the marketing is a value creator not a cost center and that's the sort of the old fashioned thinking that we need to move away from.
Franky: Which specific KPIs would you use in a business context what's important to you for a marketing standpoint?
I'm gonna focus on the business KPIs and say well you know what other business KPIs and then how does marketing fit into that so again I think when you're running a lot of business need a building a business and keep it as simple as possible you know when businesses start to go wrong is when people start to over complicate things so:
Make sure you got a product that people want to buy. Make sure you've got enough cash in the bank to facilitate the activity and we are big fans of using a balanced scorecard approach so you can actually see you know the financial performance is going; everybody in the business has visibility on how much cash we have in the bank now, how much do we think we gonna have in six months.
What is it costing us to acquire a customer etc. that sort of data. So you get everybody involved and obviously marketing feeds into this in terms of how many customers do we currently have? How are we growing those customers. What's the churn rate on those customers so for me it starts with the top down approach of business first and how does marketing fit into the economics.
Any marketing specific KPIs that you'd be encouraging your clients to measure?
Really it’s fifty-fifty half is related to sales or profit, or sales of a certain product line. And then the other fifty percent is the raw marketing KPIs - so we'll typically have a list of say six to ten channels that we will work on for clients and so be different for every one of those.
For something like a trade show for example it would simply be quite a high cost in terms of conversion of that lead into a sale compared to an email or webinar or even social media - so they're definitely very different ends of the spectrum and affects how we how we pitch those KPIs for them
Franky: We use lots of different software in our martech stack what piece of software could you not live without
for me it would be the AZoIntel analytics platform that we built and developed over the last six or seven years. We also have built our content management system, email distribution and the whole platform that we now exist upon which is our own IP these are pieces of software that we couldn't really do without and within that, I think the ability to see who was engaging with our content, that content journey and how they're engaging with that content – that has been the bedrock of the growth of our business.
so over that period of time I think all of the other aspects you know sequel server and you know the the adobe suite that you may use you can pretty much replace those with all the solutions so it's a very personal answer and I apologize for the immediate commercial plug on that
I think you're excused, for me personally it’s about how the software interacts with each other. Because we are with small marketing departments as soon as you can automate certain tasks: your lead scoring for instance and lead distribution out to the sales team, it just frees up your morning.
Rather than to get in and then this bottleneck of admin that needs doing. Having grown up using Salesforce and we've managed to get AZoIntel talking directly to Salesforce, we can just forget about it. I know that it happens on a fifteen minute sync, so it can happen when I'm asleep it can happen at a trade show, it’s happening right now which is huge!
Ian: One of the key points right here right now is going to be the use of AI in marketing. The ability to have automated transcription of meetings. The ability to work out you know which key words and phrases you should be using in content and how they're going to have the greatest impact.
I was recently at the inbound show over in Boston and marketing technology and A. I. is starting to have a serious impact - It’s going to have the most impact where it can automate fairly mundane, routine tasks. It has taken us several years to get to the stage where we start to get reasonable value out of Salesforce but it's because we managed to automate a lot of those manual activities.
Franky: Absolutely, so what's your biggest challenge as a leader and what's are the biggest issues that you come up against in running a business?
Ian: So to start on that one I think for me it's always been about getting the culture right getting the team working right - you could have one of the world's greatest products but if you've got a toxic culture within the business it’s going to blow up at some stage.
So you have to have a goal in life, you have to have the vision, you have to know where you going how are you going to get there and then your job is to explain that to people in simple terms. Illustrate what success is gonna look like, how they play a part in the team that's going to enable you to get that and just keep it simple. Trust is a big factor you know which plays into that team working…
Staying true to your vision
True to the vision - you know that's Simon Sinek analogy of leaders eat last, the days of the Victorian mill owners are well gone. I think the role of a leader in businesses is more of a facilitator. As I come to work, I want people to tell me what I can do to make them more productive at their jobs.
Alex: It’s a fast changing industry right now I mentioned that chart with the 7 thousand tech stack businesses on.
You’ve got a very fast paced sector in terms of the different channels within it and the different approaches that you can take.
It's really about the pace of change in the data that's available and not getting completely bombarded and washed over by that data but actually finding techniques and methodologies to do that as a team of marketers. It is about building a culture where you’ve got thinkers who can come up with the answers for both yourselves and the clients really.
Franky: If you could give yourself one piece of marketing advice about me way back when in in twenty years ago when you're just starting out with a song when you're starting out with with my marketing or debate
Alex: Don't believe the hype. Build the hype.
Ian: If I could go back… I came out of the manufacturing industry background and on the back of that, I saw the internet could be really good for educating engineers, designers and scientists.
So I thought to myself, I'll go into a totally new career which is a building websites. At the time I knew nothing about building websites and I was led by the nose by a team of developers and spent six figures on building a website that looked really pretty and was really interesting, but search engines were never going to find it so I wish I'd known about search engines back then and how significant they were so I would have definitely saved a few hundred grand by knowing that!
all right fascinating.
Well that ties in superbly with next week’s subject matter where we’ll be finding out how companies are adapting their paid search strategy in the current climate.
Thank you both gentlemen for contributing today.
Don't forget to subscribe in the usual places or at AZoNetwork.com we'll see you next week for a brand new edition of the marketing science podcast with Matt Rafferty the head of Paid Search here at AZoNetwork – We’ll see you then
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