Sunday, September 24, 2023

When Planning for 2024, Focus On the Jobs Your Customers Need to Get Done

Understanding what will motivate a potential customer to buy your products or services is a critical prerequisite to developing an effective marketing strategy and creating compelling marketing communications. As thousands of marketers will attest, this isn't a simple task.

As marketers, we develop customer value propositions and we create content we believe will resonate with our potential buyers. But too often, our marketing programs don't produce the results we expect.

This lackluster performance frequently stems from the methods marketers typically use to define their market(s) and to determine and describe how their products or services will create value for customers.

Most B2B marketers define their market(s) based on a combination of product/service characteristics and the attributes of their potential customers (company size, industry vertical, etc.). 

So, for example, a marketer might define his or her market in these terms:  "We sell manufacturing execution system software to large enterprises that are engaged in both discrete and process manufacturing."

Then, marketers use these definitions to guide the development of their customer value propositions.

The problem is, these conventional approaches to defining markets and identifying how products or services create value don't help marketers pinpoint what actually motivates people to buy. Fortunately, there's a proven way to solve this problem.

Understand What Customers Need to Get Done

The starting point for understanding what will motivate your potential customers to buy is to recognize that people don't buy a product or service because they want the product or service itself. In most cases, what they really want is what the product or service will enable them to accomplish. 

For example, most small business owners don't really want a company brochure, or a direct mail campaign, or, for that matter, a website. But, many will invest in these things because they see them as effective tools for increasing sales.

Theodore Levitt, the legendary professor of marketing at the Harvard Business School, memorably expressed this idea when he often told his students, "People don't want to buy a quarter-inch drill. They want a quarter-inch hole."

In their 2003 book, The Innovator's Solution, Clayton Christensen and co-author Michael Raynor built on Professor Levitt's thinking to describe what is now widely known as the jobs-to-be-done framework (the "JTBD framework"). In 2005, Christensen and co-authors Scott Cook and Taddy Hall further described the importance and value of the JTBD framework in a landmark article published in the Harvard Business Review.

The basic idea of the JTBD framework is that when people identify a "job" they need or want to get done, they look for a product or service they can "hire" to perform the job.

Christensen and his co-authors argued that this is how customers "experience life." Their thought process begins with an awareness that they need or want to get something done, and they seek to hire something or someone to do the job for them.

So, the presence and recognition of a job that needs to get done are what trigger and energize a potential customer's motivation to buy. This makes the job - not product/service features or customer demographics/firmographics - the primary unit of analysis for marketers who hope to develop and execute high-performing marketing strategies and programs.

In the HBR article, Christensen and his co-authors put it this way:

"The marketer's task is therefore to understand what jobs periodically arise in customers' lives for which they might hire products the company could make. If the marketer can understand the job, design a product and associated experiences in purchase and use to do that job, and deliver it in a way that reinforces its intended use, then when customers find themselves needing to get that job done, they will hire that product."

I've previously written about how the JTBD framework can be used to guide the development of marketing content. The point of this post is that the framework can also be a powerful tool for thinking about market definition, market segmentation, and value proposition development during your marketing planning process.

So, as you begin planning for 2024, take enough time to identify the jobs your potential customers are facing that your products or services can perform. This is the real key to understanding what will motivate your potential customers to buy.

Image courtesy of Got Credit ( via Flickr (CC)

Sunday, September 17, 2023

[Book Review] A First-Rate Guide to the Power of Choice Architecture

Source:  Penguin Random House LLC

Over the past several decades, psychologists and other behavioral scientists have conducted thousands of research studies examining various aspects of human decision-making. Thanks to this research, we now know that people use a variety of mental shortcuts known as heuristics to make decisions.

Research has also found that our decisions and actions are greatly influenced by how choices and options are presented. This particular aspect of decision science is called choice architecture, a term that was coined by Richard Thaler and Cass Sunstein in their 2008 best-selling book Nudge.

The principles of choice architecture and the practice of "nudging" have been implemented in many business, non-profit, and governmental settings, but choice architecture is still not understood as well as it needs to be. That makes a recent book by Eric J. Johnson an important read for marketers.

The Elements of Choice:  Why the Way We Decide Matters (Riverhead Books, an imprint of Penguin Random House LLC, 2021) explains the psychological principles that underlie choice architecture and describes the tools that choice architects can use to influence our decisions and actions. 

Eric Johnson is a recognized authority on human decision-making. He is the Norman Eig Professor of Business and the director of the Center for Decision Sciences at the Columbia Business School. He previously taught at Carnegie Mellon, the Sloan School of Management, and the University of Pennsylvania. According to the Institute for Scientific Information, Johnson is one of the most highly cited scholars in Business and Economics.

What's In the Book

The Elements of Choice contains ten chapters. In the opening chapter, Johnson introduces the major topics he addresses in the balance of the book, and he briefly discusses his professional journey in human decision-making.

In Chapter 1, Johnson also describes his objective for the book and the perspective he will use throughout the book. He writes:  "This book goes well beyond the simple idea that defaults and other choice-architecture tools can nudge people into desired behaviors. It's much more important to understand how choice architecture changes choices."  (Emphasis in original)

One of Johnson's main points in The Elements of Choice is that choice architecture largely works by influencing a decision maker's plausible path and assembled preferences. He discusses plausible paths (the strategy a decision-maker chooses to use to make a decision) in Chapter 2, and he covers assembled preferences (the memories that most easily come to mind when we're faced with a decision) in Chapter 3.

In Chapters 5-9, Johnson covers the major tools and techniques of choice architecture.

  • How to use defaults (Chapter 5)
  • How to decide how many options to offer (Chapter 6)
  • How to decide what order to use when presenting options (Chapter 7)
  • How to describe options (Chapter 8)
  • How to design and build online choice engines (Chapter 9)
In the final chapter, Johnson discusses some of the ethical issues surrounding the use of choice architecture and offers some ideas about how marketers, other business leaders, and policymakers can be responsible choice architects.
My Take
The Elements of Choice is an important addition to the growing body of literature about the use of behavioral science principles in marketing.
The book is clearly written and easy to read, although Johnson does tend to ramble a bit at times. He includes several useful anecdotes and examples in the book, but some are longer than necessary.
The content of the book is supported by extensive scientific research. Johnson includes over 170 detailed endnotes and provides a 25-page bibliography of resources that interested readers can consult.
The Elements of Choice is a valuable resource for marketers because it advances our understanding of choice architecture in two important ways. First, Johnson discusses numerous research studies that have demonstrated the power of choice architecture tools and techniques. This discussion reinforces the importance of choice architecture in the marketing toolbox.
Equally important, Johnson does an admirable job of explaining why choice architecture works. Unfortunately, many resources about choice architecture - and the related concept of "nudging" - describe the tools, but don't address why the tools are effective.
Johnson fully appreciates the importance of understanding "why" and "how" choice architecture works. He writes:  "Without understanding the processes underlying choice architecture, we can't be responsible designers [his term for choice architects]. Knowing how choice architecture works will allow us to invent new and more effective tools."
Marketers present choices in almost every communication they create for their potential buyers. Therefore, whether they realize it or not, marketers regularly function as choice architects. The Elements of Choice provides insights that can enable marketers to design and present these choices in ways that will improve marketing performance.

Sunday, September 10, 2023

[Research Round-Up] Two Studies Explore the State of B2B Marketing

(This month's Research Round-Up features a research-based white paper by Winterberry Group that addresses the current state and future direction of B2B marketing and a wide-ranging research report by Livestorm, mention, and Jotform that is based on a global survey of marketers.)

Source:  Winterberry Group

Outlook for B2B Marketing:  A Market in Transformation by Winterberry Group (sponsored by the ANA and Anteriad)

  • Based on a survey of 204 marketers across the United States (20%), France (13%), Germany (17%), and the UK (20%)
  • 68.5% of respondents were with companies having between $100 million and $1 billion in annual revenue
  • Survey conducted in March 2023
  • Also based on more than two dozen interviews with brand, agency, and vendor executives conducted in February and March 2023
This research-based white paper by Winterberry Group provides valuable insights on several issues relating to the current state and likely future evolution of B2B marketing.

The paper discusses the dramatic impact of the COVID-19 pandemic on B2B marketing. Many industry observers argue that the pandemic greatly accelerated a process of transformation in B2B marketing that began several years ago.

Winterberry Group identified nine trends that are having the greatest impact on B2B marketing.

  • The move of younger B2B buyers into positions of greater authority is driving a systemic change in buying behavior.
  • More buying journeys will begin and end online, but the overall journey will continue to include both online and offline interactions.
  • B2B e-commerce will continue to grow significantly.

  • Authoritative thought leadership content, combined with effective creative, will be increasingly important to building brand trust.

  • Artificial intelligence will transform content and creative execution.

  • Data will play an increasingly important role in enabling better marketing decisions, but it's likely that privacy regulations and concerns will also increase.

  • Utilization of marketing and sales technologies will increase, but the emphasis will be more on maximizing the value of existing technologies rather than on constantly adding new applications.

  • B2B marketing organizations and the skillsets required of B2B marketers will be constantly evolving.

  • B2B marketing budgets will continue to shift to digital, but this shift won't be as pronounced as is often found in B2C companies.
All of these trends are discussed in detail in the white paper, and I recommend that you read the entire paper.
Source:  Livestorm, mention, and Jotform

Marketing Manager Mindset Report 2023 by Livestorm, mention, and Jotform

  • Based on a survey of 693 marketing decision-makers
  • 46.1% of the respondents were director-level or above
  • 36.4% of the respondents were with B2B companies
  • 78% of the respondents were with companies having 500 or fewer employees
  • The report does not state when the survey was conducted
This survey focused on five principal areas - marketing budgets, marketing strategy, marketing trends, content marketing, and social media marketing. The report provides separate response data for four types of organizations - B2B companies, B2C companies, agencies, and government/non-profit organizations.
Here are some of the major survey findings relating to B2B companies.
Marketing Budgets
Thirty-eight percent (38%) of the B2B respondents said their marketing budget increased this year compared to 2022, while 30% said their budget stayed the same, and 26% reported a decrease.
Marketing Strategy
The top three marketing goals for 2023 identified by B2B respondents were to increase brand awareness (59.9%), generate more leads (59.9%), and increase sales (56.3%).
The two most important digital marketing channels identified by B2B respondents were content marketing (76%) and organic search (74%). The next three most important channels were referral marketing (65%), email marketing (62%), and paid search advertising (61%).
Marketing Trends
This study found that the uncertain economic environment of the past several months had affected the strategic marketing decisions at most B2B companies. Only 24% of the B2B respondents said their marketing decisions had not been affected by the macroeconomic climate.
The top three impacts identified by B2B respondents were:
  • Reduced marketing budget (36%)
  • Change in pricing model (25%)
  • Change in business model (21%)
Content Marketing
The three most important content marketing goals identified by B2B respondents were inbound lead generation (59%), improve SEO (56%), and improve brand awareness (55%).
The three types of content most widely produced by B2B companies were blog articles (72%), videos (63%), and case studies (40%). Infographics came in a close fourth at 39%.
Eighty-three percent (83%) of the B2B respondents said they produce all or most of their marketing content in-house.
Social Media Marketing
The three most important social media goals for B2B respondents were to increase brand awareness (79%), generate leads (59%), and drive traffic to website (56%).
B2B respondents identified LinkedIn as the most widely used and most important social media channel. 

Sunday, September 3, 2023

The Vital First Step of Your Marketing Planning for 2024

The fourth quarter of 2023 is only a few weeks away, and that means many B2B marketing leaders will soon begin planning for next year.

Marketing planning processes vary considerably across companies. The planning process in large enterprises can be quite formal, and the output is often a lengthy document replete with spreadsheets containing budget details and financial projections. The planning process in smaller companies tends to be less formal.

Regardless of whether your planning is formal or informal, one key to having a sound planning process is to start the process in the right way. Fortunately, a proven technique from military planning can help marketing leaders get their planning process started on the right basis.

For years, US military commanders at all levels have used a framework called METT-TC as an integral part of their planning process. METT-TC is a mnemonic that is designed to help commanders remember and prioritize what to analyze when planning a military operation.

METT-TC stands for mission, enemy, terrain, troops available, time, and civil considerations. These six factors define the environment in which any military operation will be conducted, and commanders must thoroughly analyze each of these factors to develop sound operational plans.

When I work with a client to develop a marketing plan, I begin with an analysis of four environmental factors, and I've created a mnemonic for these factors that serves much the same purpose as METT-TC. My mnemonic is MEC-R, which stands for mission, economic/legal environment, competitive landscape, and resources available.

Mission Is "First Among Equals"

These four factors are all important, but mission is clearly the "first among equals" because it provides the critical starting point for a sound planning process. Mission occupies this pivotal position for two reasons.

First, to maximize impact and effectiveness, all marketing activities must be aligned with, and supportive of, a clearly defined mission. With every proposed marketing initiative, you should ask:  "How will this initiative help us fulfill our mission?" Obviously, you can't answer this question if you don't have a clear picture of what your marketing mission is.

The second reason is equally important. To be a successful marketing leader, you need the support of your CEO and other senior company leaders. Your chances of gaining and keeping that support will be higher if you and the other members of your company's senior leadership team have a common understanding of marketing's mission.

Therefore, before you begin any detailed planning for next year, you need to have an open and frank discussion with your senior company leaders about the core mission of marketing in your organization.

More specifically, you should prepare a clear and concise high-level description of your proposed marketing mission and share it with your senior management team. The goal, of course, is to have your senior leadership team endorse your mission description.

The Core Mission of Marketing

So, what is the core mission of marketing? I'm always skeptical of marketing principles or methods that purport to be universal. Competitive conditions can vary considerably across companies, and that usually requires a company to develop business and marketing strategies that fit its unique circumstances. But, this is the "exception that proves the rule."

Every marketing organization in a for-profit company has a twofold mission, both aspects of which are linked to revenue growth. It must run programs that will generate revenue in the short term, and also design and execute programs that will lay a solid foundation for long-term revenue growth.

The need to focus simultaneously on the short term and the long term is not unique to marketing, but this can be particularly challenging for marketers. For the past several years, marketing leaders have faced increasing demands to prove the value of their activities and programs. Overall, this has been a positive development, but it can have a dark side.

Marketing programs that produce a quick impact on revenue are relatively easy to measure, and their results can be seen in a matter of a few weeks or months. However, programs whose impacts are several steps removed from the buying decisions that generate revenue are much more difficult to measure, and they may not produce visible results for a year or more.

Under these circumstances, marketing leaders often face pressures to shift resources to marketing programs that can deliver quick and easily measurable results. Unfortunately, such a shift can cause companies to under-invest in longer-term marketing activities and programs, thus placing future revenue growth at risk.

Producing both short-term and long-term revenue growth is the core marketing mission at any for-profit company, and the company's senior leadership team must understand and endorse this mission. Therefore, communicating this mission to your company's senior leaders and obtaining their buy-in is the essential first step in your marketing planning for 2024.

Image courtesy of fdecomite via Flickr (CC).