Not All Customers Are Equal...
In the post on smarter placement of partner events, I mentioned that there was another filter through which we put our customer list in order to refine our efforts.
With the scale of the market the Mid-Atlantic team, for example, is trying to address (over 60,000 customers) and limited resources (25 Microsoft employees), there are a few key parameters.
- Everything has to go through partners.
We have about 100 partners that are engaged with us to one degree or another (out of a pool of 7500 in the Area). Of those, probably 30 are of the highest quality in terms of marketing and sales execution.
- We have to be very smart in which customers we approach to attend our events
Before I go on, I should explain why it is events that we build our business around. Simply put, it works.
Last fiscal year, the Greater Pennsylvania Area did a focused effort (using a similar smart placement approach) of events.
Three months later, they had a bump in their Open License revenue (the primary purchasing vehicle for companies up to 250 employees)...which was sustained.
And they outperformed every area of the country.
No matter, how you slice it, you can't write it off as an anomaly. Their event model had a direct impact on their Open License business.
Ok, so we want to do events (aka right activity) because they scale, led by our partners (who leverage the heck out of Microsoft-more on that later) in the right location...but most importantly, with the right customer andwith the right content.
If you are selling a new product, one way to slice this is to look for the early adopters.
If you're reading this blog, chances are you are the person many of your friends all about technology advice. You may also be a wine aficionado, or an antique car buff. In one area or another, you are an early adopter.
Here's a standard bell curve.
On the far left would be the innovators (see Geoffrey Moore and Crossing the Chasm) and the next slot over would be the early adopters. If you want to accelerate the uptake, you might approach this group when a product releases and thus accelerate the curve.
For example, when SQL 2005 came out, this is precisely what I did in the Mid-Atlantic Area...and the result was 36% SQL growth (4th in the US), particularly impressive since it came on top of the previous year's >25% Server Growth- a feat which, if I'm not mistaken, only one other area pulled off.
That's great, but if you're specifically focused on events as a marketing vehicle and affecting revenue across a marketplace, you need to dig a bit deeper.
Like individuals, companies have a "persona" as it relates to their worldview.
What we've done is say: ok, let's try and understand the "firmographic" profile of our customers (much like you would study the psychographic profile of an individual.) [BTW, we're not the only ones who have done this]
Using a proprietary methodology , combining qualitatitve and quantitative analysis, we've grouped our customers into different "clusters" that help us understand what they buy, how they buy, how they view technology, etc.
Here are a few excerpts of the explanations of the mentality of three of the clusters.
Professional Collaborators are actively looking for a direct relationship with Microsoft, as they inherently understand the value of receiving advice/information on a consultative basis. Consequently they are more likely to have opted-in to receive marketing communications. They equally have deep relationship with their Partners – long term established relationship with them.
As Industrialists are located outside the major metropolitan centers, they are less likely to have a Partner relationship and those that do are unlikely to have face to face interaction. Consequently they are looking for direct contact with Microsoft, with self-service support a key priority for them. As a result they are more likely to have opted-in to receive marketing communications.
Customizers, as their definition suggests, are looking for more tailored solutions and therefore have established relationships with Partners (likely to be ISV based) who they rely on for trusted advice. Consequently they are more likely to have opted-out of receiving marketing communications. Partner activity will be the key to driving opportunities within this segment
Then, we looked at the set of customers we have in our area...
So we then said, 'ok, we are specifically looking for customers who are likely to attend events and are receptive to the ideas about the potential of the technology we are trying to sell," there are a large number of professional collaborators, let's go after them...
Here's why...if we can move our average revenue in this cluster in FY06 ($5,918) to equal that of the Top Area ($10,022) or an increase of $4,104 per customer, then you are looking at an increase of revenue of $2.8mm.
So now, instead of boiling the ocean of 60,000 customers, we're saying, let's go after a specific subset of customers whom we know are open to attending events driven by telemarketing ( see communications preferences chart below ) and see if we can align our resources to push against this part of the market.
The last question then, is...what do you tell them the event is about? Why would they want to come?
Here we use some predictive analytics called "Next Logical Product" that aggregates a vast amount of data about customers...what they own, their firmographic profile, etc. to say...."of all of the products that Microsoft sells, which ones would be of the greatest interest to this group?"
This gives us the guidance we need to help figure out what the event is going to be about, which products are top of mind (theoretically!) and what messages to stress (tying back to firmographic profile).
Lastly, a Word on Measurement and Tracking...
How do we know how we are doing?
We've built a scorecard that ties back to the Professional Collaborators and looks at Y/Y increases in number of Opportunities, Amount of Opportunity, and Closed Revenue. In other words, are we selling larger deals to more of the customers?
The old era of "carpet bombing" marketing is long gone. It's too expensive to waste your time calling everybody. If you're going to call someone and ask them to do something, doesn't it make sense to increase your odds by calling the right person?
Are we there yet? No, not at all, but we have no choice but to move in that direction.