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Secrets of B2B Marketing Success: A Conversation with Henrik Petersen (Microsoft, Zendesk)
56 Plays1 year ago
In this episode, Julie interviews Henrik Petersen, a fractional CMO who has over 20 years of experience in B2B marketing for software companies such as Zendesk and Microsoft. In a 3-steps process, Henrik shares his insights and best practices on how to use data and market orientation to create a winning strategy that sets you apart from the competition in the market segment you choose to play in.
Step 1 - Create Profit Formula - He explains how to understand and optimize the profit formula, which is the way your company makes revenue and grows, and how it changes as you target different types of customers or markets.
Step 2 - Be market-oriented and understand your customers - He also reveals how to align your product with the customer’s jobs to be done, which are the tasks they want to accomplish, the motivations behind them, and the outcomes they expect. He gives examples of how he used customer interviews to uncover these insights and how he applied them to improve the messaging and conversion rate for Zendesk in Japan.
Step 3 - Diagnose your brand and market situation - Finally, he discusses how to diagnose the brand’s health and performance by understanding the brand DNA, the distinct brand assets, the brand awareness, and the market penetration and share.
In today’s episode, we discuss :
- Henrik's background - 20+ years of B2B marketing experience (Microsoft, Zendesk)
- What is a profit formula and why is it important
- Step 1 - Have a winning mindset and strategy (How to optimize your profit formula for different markets and segments)
- Step 2 - Be market oriented and understand your customers
- How Zendesk leverage events to speak to customers
- Best practices when doing customer interviews
- How Zendesk ensure everyone in the company understand how they add value to the customer
- How Zendesk improve website conversion rate from customer interviews
- Step 3 - Diagnose your brand and market situation (aka perform checkup for your brand)
- How to understand your brand DNA, distinct brand code, and brand equity
- Summary - How to use the 3 steps to create your business profit formula
- Lighting round - Advice for marketers
- Lighting round - Recommended book
If you want to learn from Henrik’s rich experience and expertise in B2B marketing, don’t miss this episode of Winning with Data-Driven Marketing.
Recommended
Transcript
Introduction to 'Winning with Data-Druin Marketing'
00:00:00
Speaker
Welcome to Winning with Data-Druin Marketing Podcast. This podcast is brought to you by WaaS.ai Market Research. I'm Julie, your host in this podcast, and in every single episode, we talk to industry leaders, marketers, and growth experts in Asia about how to use data to enhance the ROI in their marketing activities.
00:00:22
Speaker
We bring you real case studies while giving you background on how these leaders build their career to where they are today.
Guest Introduction: Henry Peterson's Background
00:00:30
Speaker
Joining today is Henry Peterson. He has won 20 years of B2B market X marketing experience working with B2B SaaS software companies to build distinctive brands and field revenue growth. Henry, welcome. Thank you, Dewey. Thank you so much. And thank you for inviting me. It's a
00:00:51
Speaker
Really exciting to be on your podcast today.
Henry's Career Journey in Technology Marketing
00:00:55
Speaker
Henrik, I know that recently you are now a fractional CMO and when I look at your LinkedIn and have conversations with you, you have so much experience across different companies. Can you walk us through and the audience a short stories about your career and where you are today?
00:01:15
Speaker
Yeah, sure. I mean, let me see if I can boil my 20 years down to a short story. But basically, I'm originally from Denmark. So I grew up in Denmark. But I came to Singapore in 1999.
00:01:32
Speaker
A bit of a coincidence, but basically I started out my career, actually not in marketing, but in a small and many old manufacturing company where I was looking after our supply chain planning
00:01:48
Speaker
I'll say I quickly discovered an interest for software when we implemented a new business that was called an ERP software. And that quickly took me to a new job in the software industry. So first of all, the ERP consultant, but then joining the software company itself in company called Ambition Software.
00:02:13
Speaker
and in product marketing. And that also then later in 99, gave me the opportunity to move to Singapore. And yeah, that's where I've been since 99. So since then I've spent, like you said, pretty much 20 plus years in I would say technology marketing, helping
00:02:35
Speaker
Um, primarily technology companies, software companies, other technology companies, uh, build a business in the Asia Pacific. And I think groups companies like Microsoft, uh, send us a couple of startups here in Singapore and also, uh, starting my own companies, uh, getting my experience as a startup. So I feel like I've been both in very big companies and also small
00:03:03
Speaker
And is there a common point as you are in, I can see that we are very focused in B2B marketing and in software, right? Is there like a common question or common theme and pattern that you see across like the marketing challenges across all this company?
B2B Growth: Lessons from B2C Market Research
00:03:20
Speaker
Yeah, I mean, I think it's probably also what we're going to be talking about today, right? It's growth out of B2B companies. So yeah, I'm from B2B. I really grow the business. And although I think in terms of just pure marketing, I think marketing is not that different, whether it's B2C or B2B.
00:03:39
Speaker
But then when you look at the core business, there are definitely differences in the way we do business. I think actually, B2B, there is a lot we can learn from B2C, where I think they do a lot better when it comes to market research and brand diagnosis, which is what we also be talking about today.
00:03:58
Speaker
Um, but I think the fundamental, every time I meet a business owner, I work with a new startup. The question is always the same. How do we grow our business? How do we become a big brand and how can we expand our business and how can marketing help us do that? And whenever, uh, and I myself always ask this question with my team as well. So, uh, so as the, as the CMO, how do you usually approach this?
The Need for a Winning Strategy
00:04:25
Speaker
Yes, I think when I joined any company, I think the first step is actually to do diagnosis and is to understand what we'll also be talking about today. What is the winning strategy?
00:04:40
Speaker
Um, right. So, um, and there's a lot of involved in that, but it's, it's really understanding the, what do we call the profit formula? How does this, how does the company, uh, make, make a revenue or they grow. Um, I think very often we are too focused on products. Uh, right. We look at our product and think we have the best product, but actually there's a lot more things in terms of how we.
00:05:05
Speaker
How we, you know, how we use our resources, how we create processes and how we leverage those capabilities in relation to our profit formula. I think it's how you optimize that the best that determines whether you are successful.
00:05:21
Speaker
I love it when you say the profit formula and it's not just about the product, it's the product, the process and a lot more things than that. Could you walk us through a little bit deeper about this and maybe if you can throw in like an example of a case study that will be very great for us to visualize how to build a profit formula.
00:05:41
Speaker
Yes, a profit formula will change as the company also grow. So you could say when you start up, so when I joined, for example, the company Sendesk, which is a software company, a CRM software company, we were initially very focused on smaller, mid-sized companies.
00:06:02
Speaker
And it was really focused on, you say, a sales service or a product net growth, where it's about getting customers to come to a website, sign up, and basically get them started on their own. So you can say the profit formula for that, you can start formula saying that means, you know, it is all about optimizing that sales service experience.
00:06:23
Speaker
Um, but also it means that, you know, you basically are making a choice here, right? So we're not focusing on big companies. Uh, you're focusing, focusing on smaller companies, which also typically means a lower, uh,
00:06:37
Speaker
order size or customer lifetime value. And it also means that when you look at that profit portfolio, then you need to start thinking about what does it mean from a marketing perspective, then maybe we cannot, we cannot for example, use an enterprise sales model to support that because it's still too expensive in terms of their customer.
00:06:57
Speaker
And so that's, you can say, one way of looking at it is the profit formula based on where we are as a business today is based on the type of customers we target and market we play in. And also, yeah, basically back to the strategy of the company. And then you will probably see that we saw that all sides ending, that really bold over time as we grow, as we started to off market, then we begin
00:07:23
Speaker
a lot more focused on winning bigger deals. Then you could start, your profit formula starts to change. So now you can afford to maybe adjust also your go-to-market model and your marketing strategies around that. So that it aligns with the resources and processes.
00:07:43
Speaker
And when say a company sometimes, when they are just starting out right, it's often hard to choose whether or not it's top to bottom or bottoms up, whether or not I should go with product-led, you know, a lower cost of acquisitions versus should I go with enterprise sales. How would you approach this in terms of which strategy to go with? Or is there like a default mode that you should always try first?
00:08:13
Speaker
No, I don't think that's necessarily a default mode. And I think that's, I think actually sometimes that's the risk when we, you know, as marketers or as business owners is we tend to see also to look outwards, to look at other companies and see what are they doing and trying to apply their model to our, our business. And it doesn't necessarily work right. Because we might have a very different strategy and we might have a different profit formula that doesn't shift their model of doing this.
00:08:40
Speaker
But I think it's back to the question again is what is the winning strategy? Because it's really back to who are you targeting? And what are we going to do that's going to make our solution better off of those customers in the second we have chosen to target?
00:09:00
Speaker
Um, so I think that's why it's back to that strategic, uh, those strategic decisions. That's really important for the success of the company. Um, so, so again, maybe also what the audience here is like, please go, maybe go back, think about what is your winning strategy. And maybe just to, uh, explain that I think very often there's a tendency to confuse planning with strategy.
00:09:27
Speaker
Right. So the way, um, the way I think to look at is to say, planning typically is where you're planning your, um, you're working in your country, the things you control. So your resources, your people, right? We can make a plan about how many people we want to hire. We can plan what to do with our inventory. We can plan what to do with our processes. Uh, these are all things we control. Strategy on the other hand is about the market. These are about things we don't control.
00:09:57
Speaker
So your strategy very often is influenced by the market, the customers, the competition. So that's why it can be a bit, it can feel a bit, I would call it nerve wracking to kind of make strategy because you are actually not in controllers. So first part of it is really understand, in order to understand the market you are playing in, because otherwise you can't really make good decisions around it. So I think very important to kind of differentiate a strategy is not
00:10:28
Speaker
Planning is about your resources, how you use that. Strategy is about looking out at the market and decide. Like I said, first,
Distinguishing Strategy from Planning
00:10:36
Speaker
where do we want to play? Right. So in marketing, we typically talk about how we start target audience. Right. The second step is how, you know, playing in that field, how are we going to provide, how are we going to offer a better solution than anybody else in that market?
00:10:55
Speaker
So if I have to bring that back to our, to marketing, specifically to marketing rights, so you're going to say in marketing strategy, it really is really quite simple. It's just who's our target audience? How are we going to win? We call that positioning, right? And third is what is our objective.
00:11:15
Speaker
So if you go back to like, what is the winning strategy? So winning strategy, of course, is that when we say winning, yet it means is it kind of apply somebody is losing, right? So although business is not always a zero sum game, right? Sometimes you can coexist with competitors, but if you want to take, increase your market penetration, win more customers, you're basically stealing those or taking those away from somebody else. So that's the definition where I would say my definition of winning is that we are winning market.
00:11:44
Speaker
meeting customers from the market. And our strategy is where are we going to do that? And how are we going to do that?
Outperforming Competition with a Winning Strategy
00:11:53
Speaker
So I'm going to turn the table and ask you, so in this case, now that we know, you know, not to confuse strategy and planning and strategy is about we choosing, choosing and understanding, where do we really want to play in terms of target audience, positionings, and what's our objective for it. So how do we know, will we share the right strategy for us?
00:12:16
Speaker
Yes, I think that the first step is actually, it's going to get determined with having a winning strategy. So I think very often, and if I look back at some of the companies I worked with, very often we actually don't have a winning strategy. We cannot just play to participate.
00:12:32
Speaker
And what I mean by this, it's very often when you look at companies and you listen to what our goals are, they're typically very internally focused. Our goal might be, we want to double our revenue next year. And although that might be a very challenging and aggressive goal, that not necessarily doesn't mean we are winning. We could double our revenue, but competition might do more than that and still win more market share.
00:13:01
Speaker
Right. So for me, having that winning mindset is the first step in this one here is really to be clear about without just trying to grow and look at things internally, but we really trying to say, how do we, how do we grow our business in the context of what's happening in this space? Okay. Right. So winning mindset means looking out at competition and seeing, like I said, is how do we.
00:13:25
Speaker
how do we win and also how do we get better at serving customers in that space we choose. So I think that is having that winning mindset. I think it's the first step where I find at least in my experience, a lot of companies don't really have a winning strategy. They just have
00:13:43
Speaker
a goal to get better than last year. So I think if I look back at some of the companies, even big companies I've been with, it's always just, we did this last year, so we're going to do this next year, right? Where we don't actually look at it in the context of competition.
00:13:58
Speaker
I think that's super important and the reason why I think especially for small brands, we have to look at some of the some of the marketing principles and more than which is called the low or double jeopardy.
00:14:13
Speaker
I know it's maybe like a TV show, but it's actually an empirical research that shows that small brands have fewer customers than big brands. That's the first challenge we have. The challenge there is if you have more customers, you typically also have more resources, you have more
00:14:34
Speaker
get more resources to invest in advertising, marketing, and go to the market. Right? So that's already a challenge as a new business. So you're starting out is we have very few customers. If you're just starting out, of course, we don't have any customers, but right. So you purchase, how do we get more customers? The double or the second jeopardy is that small brands have slightly less loyal customers.
00:14:58
Speaker
So in marketing, we often talk about brand loyalty and what we can do, but reality action is, and that's what empirical research has shown, is that brand loyalty is primarily a function of the brand size. So the more customers you have, the more loyal they are.
00:15:13
Speaker
And it's really back to the fact that as consumers, but also as customers in B2B, we tend to buy brands we know more about, and we know more about brands we buy.
00:15:30
Speaker
To overcome that as a new smaller brand, we really need to grow, but it's looking at how we grow. It's important here because it really comes down to increasing our market penetration. And market penetration is different than market share. So market penetration means there's a hundred customers out there we can win. How do we get as many as those 100?
00:15:55
Speaker
Whereas market share typically is made up of dollar value. So when you look at, normally when we talk about growth, we typically look at things like new customer acquisition.
00:16:07
Speaker
but we could also look at how to grow our existing customers. So if I go back to, again, when I was at Send Desk, we were focused very much on acquiring new customers. We also focus a lot on how do we keep expanding the existing customers and get them to buy more products, more users, right? So you increase that monthly subscription of this customer. And we're also looking at maybe introducing completely new products.
00:16:33
Speaker
So you can also grow through product development. You can also grow your business through, what do you call that? Vertical integration. You could grow through, we're just an acquisition, which we also did. And that's why we would acquire other companies. But going back to that, the double jeopardy rights as a small brand, it's super important for us. If you want to grow and become a big brand, we must have a constant focus on acquiring new customers.
00:17:03
Speaker
It doesn't mean we don't want to do existing customers, but it's in my experience, it's very easy sometimes as you grow to suddenly use track of acquiring new customers. And you will see sometimes sales getting very busy on just keep expanding their existing customers. So we had that, actually that send us where we could see, we kind of had a strategy of what we call land and expand.
Land and Expand Strategy for Startups
00:17:30
Speaker
That means when instead of trying to go out and
00:17:33
Speaker
win a big customer and try and sell them everything in one go. We were just trying to get them on board, and then we would grow the customer, right? So quickly landing them as a customer, and then we would expand over time. And what we saw, a lot of these startups that were joining us at that time were very small startups, but they were growing very fast.
00:17:50
Speaker
Which means there are, you know, you could, and basically it's something in some cases, you pass it in your sales, you could hit your quota by just basically working with your existing clients. Um, but if you know, don't cheat acquiring new customers at the same time, you know, it's not growing as a brand.
00:18:12
Speaker
I can, uh, I can see how a lot of double jeopardy, uh, send some, uh, like some more companies who are listening to the, to the podcast is like, Oh, no. Uh, but then I'm very glad that, you know, you give us the solutions at the, uh, afterwards. Can you talk a little bit about, um, how do we design a successful land and expand strategy?
00:18:35
Speaker
Yeah, I mean, so that's, um, I think it's back to again, your, both your profit formula and say, where are you focusing? Right. So are you focusing on just acquiring small businesses or are you going up a bigger, bigger example of bigger brands? Um, but of course a lot of it has to do with, uh, getting alignment between.
00:18:54
Speaker
for example, marketing and sales in terms of who we are targeting. And second, also a lot of it has to do with enablement, especially off the sales team, to make sure that we don't, I think it can be tempting to cry and say, I don't know if you're just selling everything in one go, right? And then you might, instead of landing this account next week, you might spend three months trying to get the whole deal. But then the risk is that sometimes you make the deal too big and the customer maybe decides, ah, it's too risky, right?
00:19:22
Speaker
So part of that, I think the Lano expand is that you make it very easy for the customer to say, let me try this, let me get going and also give them some quick wins so they can come and get hungry for, let me do some more. I think a lot of it has to do with enabling your field teams, your marketing, your sales team.
00:19:46
Speaker
Gotcha. So on that note, I also wanted to come back to you. You mentioned before we start the call, there are actually three ideas around the questions around what is your reading strategy. So we have covered idea number one. I'm curious if you can walk us through your idea number two.
00:20:05
Speaker
Yeah, so the second one is, and that's why, as I mentioned earlier, I find very often B2C, they tend to do this maybe a little bit better sometimes than in B2B, but it's really called market oriented, which is, and again, it's, as my marketing professor told me, it's around understanding that you are not the customer, right?
Importance of Market Orientation
00:20:29
Speaker
So I was looking, truly say, I'm not the customer.
00:20:31
Speaker
So I think very often when we sit in marketing, we have a tendency to think that customers think like us, right? Or we have a lot of biases about our own brand. We think our own brand is fantastic. We have our own idea about why customers actually buy our products.
00:20:49
Speaker
So I think being market oriented is that you recognize that we don't really understand the market, we don't understand the customer. So we need to have a process, use our resources and create some processes for understanding the market, understand the customer and also understand the competition.
00:21:12
Speaker
So I think it was Peter Drucker who said that the customer rarely buys what the company thinks they are selling. And I think that's back to like, do we really understand why people buy this product?
00:21:26
Speaker
I remember this was very early in my career, selling ERP software. We would go to meet with prospects and then we would have a team out there demonstrating the software. Sometimes we would demonstrate the software for half a day, sometimes a whole day. When I think back at this now, it tells me that we didn't really have a clue what the customer wanted or what they were trying to do.
00:21:51
Speaker
Um, so you just show them everything hoping that at some point someone will say, it looks great. Can you please show more of that? Right. Um,
00:21:58
Speaker
So I think market oriented really means we have a organizational wide effort to keep gathering information about the customers, the market and the competition. So to be market oriented, I think it's a three step process. So the first one is of course we need to gather information and there's a lot of ways you can do that. So in us I'm used to
00:22:26
Speaker
customer interviews. And I think that's especially for small startups and small brands, right? When you can be mindful about the cost and the time of this. So if the customer interviews one-on-one meetings, probably the easiest to get started with. And also it can be very cost-effective. And it's actually can be super effective in terms of re-understanding why do customers buy these products or services?
00:22:52
Speaker
But yeah, so as a company, depending on your size, if you're a small startup, small business, you can maybe start with just customer interviews. If you have more budgets, you can use panel surveys sometimes to validate some of the findings you have found in your customer interviews. And if I look back at how I've used this in the past, so again, if I look at centers, we were basically having an effort, so every time we had customer events,
00:23:19
Speaker
we would use that as an opportunity to speak with the customers, ask them questions, right? And here, I think a good place to start when you are looking at it, if you have customers, is to ask your most loyal customers. And you're like, why do you love our products? Why do you keep buying our services? What else did you look at when you were considering our products? Why did you choose us? And then just keep going deeper and deeper into like to find out
00:23:48
Speaker
And basically what's called the jobs theory. Like what was that? What is the job that they're trying to get done? Right. Um, and, but also understand the motivations and the triggers behind why they decided to, to look for a product or service to do this job. Uh, and I also didn't understand what's the outcome they're trying to achieve by doing this.
00:24:11
Speaker
So I think custom interviews is definitely an easy place to start. I'll say there are still some things you need to be aware of when you do custom interviews. There's a tendency to introduce a lot of bias. So, you know, when we meet people, the way we ask the questions can sometimes influence the way people answer the questions. And also sometimes you have to be mindful that people can, sometimes they will answer questions in a way they think you want to hear, right?
00:24:40
Speaker
So it's an easy thing to be aware of course, when you do custom interviews, but it's still a super effective way to get started. I think once, and typically I'll say, if you do 15, 20 interviews, you start seeing a pattern, you start seeing the same kind of feedback coming back and again and again. So you start to get a good view on what is it actually going to do and what is the job to be done and what's the motivation behind that.
00:25:09
Speaker
You can, of course, do more, but I think 15, 20, that's usually enough to get a good picture of this. One of the common challenges I hear some of the companies that just don't do this is because they feel like, but I have immediate things that are sitting on my plate that perhaps give me a much more direct ROI.
00:25:33
Speaker
and doing all these customer interviews that I'm not even sure if the insights will get me anywhere. I'm curious if you would hear challenges like this in your past and how would you approach this?
00:25:46
Speaker
Yeah, I think you're right. I mean, I think it's, like I said, very often we, there is a tendency to think that we, we understand the market, we understand the customers. Maybe even because when we initially maybe started the business, we were kind of in the customer situation. So, and that tendency to think like, say, I come from that industry. I know what they, what they need. Um, but I think it's still, it is risky and especially later when you have to work on your winning strategy.
00:26:13
Speaker
If you don't get this right, you might go down the wrong path, right? So, like I said, it doesn't have to be super complicated. You can kind of build it into, like I said, where you have to meet customer events and you're meeting the customers anyway, it's more or less kind of like just have questions ready, have a more, what do you call that, a more proactive effort around how do you gather this information, right? So I think number one is how do you gather information or actually start gathering intel.
00:26:42
Speaker
The second part of being margin-oriented, you also make sure that you actually disseminate, you share the information, the intelligence you learned with the rest of the organization.
00:26:52
Speaker
If this is just something that the marketing team gathers and then they don't share it with anybody, then it's not really helpful for the organization. We want this to be a company-wide effort. That information needs to be captured in a way that can be shared with the rest of the organization. I think thirdly, also important part is that you actually act on it.
00:27:17
Speaker
Right. So if you just have all that Intel sitting and you're not actually doing anything with it, then also not very helpful. But I think it's super, and actually there's studies. I'll try to make it find a link. It can maybe share it in the recording, but there's actually a study that shows that companies who are margin oriented are actually
00:27:39
Speaker
have a better profitability and are more successful. Our study is done on this. It's not just a fun idea I've come up with. It's actually research behind this. I think also if you look at it, B2C companies tend to do this much better, I would say, typically than B2B. I think that on the B2B side, there's something where we need to
00:28:04
Speaker
step up our game a little bit and really understand our market a little bit better. And I think that the key thing here is, like I said, is for me is understanding the job to be done or the job to be done. And I think if I look back at some of the companies I've been with where the team in marketing, sometimes we actually don't even know what it is we are selling. And even less, we don't really understand why do customers actually
00:28:32
Speaker
I think if I go back to send us one thing we did really well there was to make sure that any new employee who joins the company goes through an onboarding where everybody learns how to demonstrate their product. So you actually have to go up in front of your
00:28:49
Speaker
You know, anybody else who joined the company that month on their quarter and do a demonstration of the software. And I think that's super powerful because it ensures that everybody who is in the company doesn't matter if you're in finance, HR, and marketing, you can actually explain to people you need what it is you're doing and how we add venues.
00:29:11
Speaker
But to do that, also again, it comes back to the company, you really need to understand what is the job that the customer is trying to do and how is our product helping them do that. And I think once we have understood that also, it helps us in marketing create better messaging. We can explain, instead of just listing 20 features, we can actually explain exactly what it is, how we add value to it.
00:29:38
Speaker
Uh, it also helps your, whether it's your inside sales team, your account executives, and also make sure that when they are talking to customers, they really focus on what we know the customer are trying to do. So you get a much better response.
00:29:55
Speaker
Is there like a case study user application in the past that you can help us to visualize the successful case of after doing customer interviews or the likes of actually collecting such information and this many things and actually apply it and see ROI?
Enhancing Market Fit through Customer Insights
00:30:14
Speaker
Um, I was like, I'm going to talk about it also later, but I said one project that worked on, uh, was when we were building out our send us business in Japan. Um, right. So we, and I said, I'll come back to it in the last panel around diagnosis, but also it's, we really looked at saying like, how come the, uh, website conversion rate was, uh, a lot lower than what we saw in other markets. Um, right. So there we can talking to the book.
00:30:44
Speaker
resellers or partners are all talking to customers. It helps us uncover what was the friction in that process. Basically, it came back to that the messaging on our website didn't resonate with the target audience. They basically didn't understand what we were talking about. They would come to the website and not really be clear about what we were trying to tell them and then basically leave again.
00:31:10
Speaker
Right. So by doing research, you got a bit understanding on what is it really they're trying to do and how do we showcase them that this is actually something we can help them with. So we saw a dramatic improvement in basically in people signing up for our free trials, right? Which improved our conversion rate on website, but also improved our advertising campaigns that had an impact on leads, the quality of those leads.
00:31:43
Speaker
Awesome. In that sense, I can't wait to actually let's jump into our third idea that you would like to share with us today around building your bidding strategy.
Diagnosing Business Environment for Strategy Development
00:31:55
Speaker
Yes, I think it's what I call the diagnosis, right? But it's also say, if you want to create a winning strategy, we really need to understand the field that we're playing in. Right. So, and I think there's, you can see there's kind of two parts of this. So if you are a new marketing manager joining a company or a new brand manager joining
00:32:14
Speaker
in a company, I think it's always a good idea to kind of sit down and really get a good understanding of the brand of the company you work for before you go into actually building your plan. And also in my work as working with other companies in terms of marketing, that's the first step. I think in what I call a linear process, what is to do diagnosis before we do strategy?
00:32:38
Speaker
and video strategy before we come up with all our marketing tactics. I think what I see a lot today is there's a tendency to jump straight into marketing tactics and just decide that we need to have some TikTok videos and we'll be advertising but actually before we really understand the strategic plan and have done real diagnosis.
00:32:57
Speaker
Um, so then that's the purpose of the first, the first step is, is diagnosing the business. It's a little bit like sending your brand, but I check up at the doctor. Um, right. So there's, um, you know, there's a lot of things we can look at, of course, and it depends maybe also on the size of your business. So if you're a small startup, you can eat this. It's a relatively simple process that you grow a bit, probably come in more, more complicated. They call that a comprehensive process. Um, but I think there's a couple of key things that maybe we can run through. I think that's important to look at.
00:33:27
Speaker
So I think the first step is basically understanding your brand DNA. What is your brand? And again, I know maybe if you're just a new startup, there isn't a lot of brand stories or heritage to work on.
00:33:45
Speaker
Imagine you, as a marketer, you're joining a company that's been around for a while. I think it's super important to understand the story behind the brand. It very often has a good idea to speak with the founder to understand why do they start the company? What was the values around the business? What were they really trying to do?
00:34:03
Speaker
But if you don't have the founder around anymore, you can do maybe some Google search and you can talk to colleagues in the company, but really understand what's behind the brand there. It doesn't mean you have to have a 20 slides PowerPoint around all kind of brand purpose and brand DNA and all this, but it's just a simple understanding of who we are as a brand, our core. And I think more important also is to
00:34:30
Speaker
figure out what is the what we call the distinct brand codes or brand assets that we need to use for the branding and what I mean by that is distinct brand code basically is as you say is your visual cues, your
00:34:46
Speaker
It can be your logo, it can be your colors, it can be a sound, it can be a smell, I guess, depending on your business, right? But what is it that if you don't, for example, mention the brand name, what is it that visually might tell people, ah, that's the brand, right?
Building Brand Recognition and Long-term Equity
00:35:01
Speaker
So I think a good example that was talked about a little while back was if you know the chocolate, the top of our own chocolate, that's in this yellow packaging as this triangle shape, right? That's a good example of the string brand as it, so when you see that in the shop one,
00:35:21
Speaker
in advertising, you kind of recognize that straight away when you see that shape on that yellow color. So that's a good way of saying these are distinct brand assets that you need to apply. I think it's similar for even if you're a new startup, it's important to figure out what are your distinct brand assets that you need to apply.
00:35:43
Speaker
And then I think the other rule is you need to be consistently codifying or using those on everything you do. And again, here I see there's a tendency to
00:35:55
Speaker
Especially in marketing because we are a little bit tired of using that yellow color. So that is today make it right. But then that's actually the, that's one of the worst you can do because you might get tired of looking at a specific color or something, but the market, you know, they don't look at your brand every day. So just because you're tired of it doesn't mean the market is tired of it. Right. And it takes a really long time to build a brand. So having consistency and keep applying those distinct brand asset is super critical to building your brand.
00:36:25
Speaker
So those are some of the things that you could look at around your brand. The second part, I think, comes back to what we talked about earlier about doing customer interviews is to kind of figure out what are the brand attributes or characteristics of your brand. Not that what we think about the brand, but the customer thinks about the brand, right? So here you should kind of try to figure out like,
00:36:50
Speaker
What are some of the attributes of the customers, you know, it might be easy to implement or expensive or whatever could be right so they should be both positive, and also negative attributes. So they cannot start giving you a picture of who we are as a brand.
00:37:08
Speaker
So like I said, when you interview customers, you start seeing, like I said, once you've done 15, 20 interviews, you start seeing that it's a few words to keep popping up. And those are your typically what will be, you'll kind of convert into your brand attributes that you can then use to figure out like who we are as a brand.
00:37:49
Speaker
Yeah, I think you're right. I think in the last decade or something, there's been a tendency, especially in B2B, to be very focused on performance marketing.
Shift from Performance Marketing to Brand Building
00:38:04
Speaker
It's a very short-term ROI-focused, and it's been the same in most of the companies I've been with. There's a tendency to kind of look at saying, how do we get the quickest ROI?
00:38:13
Speaker
So we keep optimizing around the last part of the funnel, or the bottom of the funnel. And now we spend a lot on building, increasing brand awareness. I think that's changing. I think a lot of companies are starting to realize that actually it doesn't work. So you kind of need to have
00:38:34
Speaker
So I think it was recently the Airbnb that realized when they turned up all that performance marketing, actually things were still growing. And I think that's back to like, you actually want to start building your brand and you reach a bigger audience than the rest. I mean, as long as you have what we call good physical availability, but then your brand will continue to grow. So I think there's a lot of power in building that brand, but I think
00:39:01
Speaker
Historically, a lot of B2B companies haven't put a lot of effort into this. But I think that's.
00:39:11
Speaker
No, but I think that's definitely a big part of your diagnosis is to understand both who you are as a brand or what your brand is. And like I say, you don't have to overdo it. I think as a tendency sometimes, especially if you bring in an agent, brighten his agency to help you with this, that they, they would produce a 20, 30, 40 page.
00:39:32
Speaker
a guide around this, that's probably overdoing it. I think especially for smaller brands, I think it's just understanding your core attributes and figuring out what your distinct brand assets are. And then just consistently apply that in all your advertising, and anywhere you go, right, you run your packaging and all that, so that it's, yeah, you start building your, slowly start building your brand.
00:39:57
Speaker
The second part of that is to, if you have the budget, is to do some brand tracking to understand where you are in terms of brand awareness. I know that brand tracking can cost quite a bit of money. I've done that before also. I think today there's new tools out there that actually makes it a lot easier and more cost effective. I think historically it's been quite expensive.
00:40:26
Speaker
I've done brand or panel surveys where you do brand tracking. You basically ask the scenarios or questions, which is really a lot of insights around your brand and where you are. But it's used to calculate a lot, but I think price is coming down, which is also another reason why it's easier problem to do today.
00:40:46
Speaker
So I think that was the first part of understanding the business.
Understanding Market Size and Share for Strategic Planning
00:40:51
Speaker
A few other things that are things good as if you're coming in as a business owner and marketing manager, I think if you can, I know it can also be a challenge, but it's understanding your, your market size, how big is the market you are going after. So trying to size up your, the market. I know for some cases it can be
00:41:10
Speaker
Tricky to understand like how many customers do we think they're out there and what's the value of those? But it can be super helpful later on when you want to do what's called excess share voice analysis, because that requires you to understand the total market and how much of that is your market penetration and your market share, how much of that do you have today?
00:41:33
Speaker
So if possible, try and get an estimate on how to do market sizing. Then the other thing is I would jump into is, especially when you talk to startups, they always talk about product market fit.
00:41:47
Speaker
Right. Which is, I feel like probably people out there will know more artists, but like, it can be really difficult to figure out like, when do you have product marketing? Usually if you have customers signing up and they stay with you as a customer, that's a good sign that you're offering some value, right?
00:42:04
Speaker
But I think if you go back to what we did at the market orientation, which was to do custom interviews to understand what's the job to be done. I think it's super helpful also to kind of go back and say, so once we really understand what's the job they're trying to do, why do they hire our product to do this job? What's the motivation and what's the outcome they have? Try and link that back with the product and just, like you say, instead of product, market fit is market product fit. To say like, do we actually have a really good fit here?
00:42:34
Speaker
Does the product really do what the customers want to do? Does it do the job to the other people? But that again requires that you have a good understanding of what the customers, why the customers actually buy it.
00:42:50
Speaker
And then I'll say another thing super helpful is back to what we talked about earlier is that profit formula. And also, what you understand the product, so the profit formula of your company, what is especially for marketing is important is to look at how do we apply that to our marketing approach. Like I said, if you are offering, for example, a premium product, like maybe no charge for the product is all about getting to sign up free,
00:43:19
Speaker
If you make profit another way, but, or maybe we hope they will eventually convert into a paid product. It probably also means that you cannot afford to spend a lot on acquiring customers. Right. So if you have a, or like only had a dentist where you're offering a free trial to smaller businesses, right. Having an enterprise sales model where you have.
00:43:40
Speaker
And so marketing activities like a round table events or make expensive ads and you have a BDR, I have to call them. And that model just doesn't apply to, to your proper profit formula.
00:43:53
Speaker
So it's also good to kind of think through that to say, if we're targeting enterprise customers and our average deal size is a million dollars, then of course we can afford to spend more. But I think sometimes again, marketing never tends to jump straight into tactics and forget to analyze these things. And then the marketing tactics need not align with our profit formula.
00:44:16
Speaker
So thinking through that is, I think also it's good exercise. That's relatively easy to do. And you can kind of on a scale, kind of say like on one end you have to have really, maybe we can't afford to spend anything in marketing. It's all about creating content, viral marketing activities. And then as we grow up, we can start investing more in different channels, different types of marketing.
00:44:43
Speaker
Sounds good.
Summary and Key Takeaways
00:44:45
Speaker
There's like a lot of things for us to diagnose here from brand tracking to market sizing to PMF to profit formula. Now before, uh, this is a very interesting to, to hear all the ideas you have around how to design a reading strategy. Before we wrap up, um, Henry, is there anything that, uh, we haven't touched on that, that is on your mind around reading strategy?
00:45:10
Speaker
No, I think just to kind of like summarize, I think it's like I said, it's the reason I brought up these three ideas. I think it's, first of all, you say it's a company mindset of having, whether you have a winning strategy or you just have a, you know, a strategy, right? So, and because the winning mindset also, it's not just about winning, it's also about figuring out like how do we win actually by serving the customers better. And that kind of leads you into like, that's really your mindset.
00:45:37
Speaker
that also need you to be market oriented because then you naturally kind of need to understand what do the customer think? What are they trying to do? So it makes you much more focused on what the customer is doing rather than just internally focused on our products. So I think, so those things kind of go nicely together, right? And then I think the diagnosis is really kind of putting it all together to figure out both,
00:46:03
Speaker
where we are right now, what the brand health, where are we at in terms of you can do things also like funnel analysis. Of course, you look at your revenue performance and all this, but also looking at how do you better align your profit formula with resources and processes in the company.
00:46:22
Speaker
So that when you are ready to make those decisions around your strategy, it's based on a solid foundation with good understanding of the market and also your competition.
00:46:36
Speaker
And then I think maybe the last point I'll just say is I think when it comes to strategy, we have to, this is something we have to kind of continually kind of monitoring because like I said, we don't actually control the components of our strategy. The customers might change behavior. The competition might do something else, right? So you kind of have to keep monitoring this and then adjust your strategy as the market plays out. So, um, so when only to, to keep looking at this.
Rapid-Fire Questions with Henry Peterson
00:47:03
Speaker
Great. Thank you for the summary. So we always have our lightning round of four questions before we wrap up today's episode. So Henry, are you ready for that? I'm ready, Em, I think. Yes. Question number one. What are the key data or metrics that you monitor in marketing, or in this case, brand building?
00:47:28
Speaker
Yeah, that's a good question. Yeah. Um, I mean, of course we have a lot of metrics, but I think, uh, I think definitely I'll say, um,
00:47:42
Speaker
I mean, in the end, revenue are always called back as a while. The key things to look at, right? I think, uh, uh, some revenue performance, um, to help up the, I'll say what I call the funnel. Um, so I think those are probably, um, key metrics to look at. Um, I think also your, uh, brand reach. So, um, you know, and, and you can say your, what to call that a market penetration.
00:48:10
Speaker
Are we increasing our brand reach and our market penetration? I think those would be the other metrics. Second question, what advice would you give to someone who is interested in pursuing a career in marketing?
00:48:27
Speaker
Uh, well, first of all, go ahead. Uh, it's a lot of fun. Uh, super interesting. But, uh, second day I'll say is, uh, get a good marketing education. Um, I think there's, I said in marketing, there's a, you know, the tendency to be.
00:48:47
Speaker
We like new shiny things are big in marketing, right? So whether that's new software tools, new rating, but we also tend to keep renaming things are coming up with new ideas. A lot of that I think, and even sometimes when you read articles, even from very famous consulting firms and famous publishers, it's actually not based on empirical facts.
00:49:08
Speaker
So I think that's why I go back to actually have a good solid foundation to give you an understanding of how marketing actually works, so evidence-based marketing. And it's never too late to do this, right? So get a good marketing education. It doesn't have to be
00:49:28
Speaker
you know, full batch again, if you've already done that, but like, just keep yourself up to date on what is the evidence-based marketing principles that we operate because there are more and more research coming out around this. And I think it's today, a lot of us operate with based on marketing myth and thinking that just not based on fact.
00:49:53
Speaker
Talking about education is the third question. What is the one marketing book that you would recommend? Yeah, so I have an activity right next to me here. I don't know if you can see on camera, but how brands grow. There's a number of books you can get from here. You don't have to get them as real books. I like to get real books.
00:50:15
Speaker
But that's a super book. Again, like I said, it's from Ehrenberg Bass Institute, who's actually doing a lot of research around impedance-based marketing. And I think that for me has been super helpful resource. I keep going back to it. All the principles, also what I mentioned earlier around the double jeopardy.
00:50:36
Speaker
But there's a lot more in there you can, you can learn from, but also around distinctive brand codes. There's a ton of research that I would recommend that people, uh, you know, get familiar with. Uh, there's also, you can just go Google. There's a ton of things you can also, I say recommend also searching for Roger Martin around strategy. He's a fantastic guy around, actually around playing to win and defining what is a marketing strategy or strategy, you know? Um,
00:51:07
Speaker
But yeah, how brands grow, I think the second one is Better Brand Health. It's another great book. I think every market should read. Thank you for giving us even a bonus education year on Book2Weekend resources to look at. Last question, what's your favorite AI powered tool or software?
00:51:32
Speaker
Yeah, good question. So, I mean, the one that probably we used in most is Grammarly. But I kind of both like it and also sometimes don't like it so much because I feel like it's constantly want to keep editing and keep making changes. So it's like, you never finish. But I find that super helpful, just having it running in a background. I have
00:51:57
Speaker
been playing around with a lot of AI tools lately to figure out what works. I'll say a lot of interesting stuff out there. I think there's still a lot of work to be done. They're not always perfect. So I think Grammarly is probably the one I kind of use everything when I write emails or, yeah, articles, whatever it is. On that note, for our listeners who want to follow and connect with you, what's the best way to do so?
00:52:22
Speaker
Yeah, a lot to connect with listeners who have questions or anything. So feel free to go to LinkedIn and click other follow or you're also welcome to connect. Happy to connect with people. Yeah. A lot to get questions or also learning from other people. So yeah, please connect on LinkedIn. Amazing. Henry, thank you so much again for being here.
00:52:48
Speaker
Thank you so much for listening. If you find this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or Google Podcasts. Also, please consider giving us a rating or leaving us a review, because this really can help other listeners to find the podcasts. You can find all the episodes or learn more about this podcast at was.ai. See you in the next episode.
00:53:20
Speaker
vroom vroom vroom vroom vroom vroom vroom vroom