8 Ways The Internet Changed Software Marketing

By:

Posted: February 8, 2007 | Modern B2B Marketing

A key theme of this B-to-B marketing blog is that the internet has completely transformed best-practices in technology marketing. In the past seven years, perhaps no company has done more to establish the new best practices than Salesforce.com. By unshackling themselves from the constraints of traditional B2B marketing and sales models, Salesforce.com has emerged as the dominant player in their market.

What are the new best practices for B2B marketing in the internet age, and how can you take advantage of them? Tien Tzuo, Chief Strategy Officer for Salesforce.com, recently spoke at Stanford University’s Entrepreneurial Thought Leaders Series. As part of this talk, Tien shared how Salesforce.com transformed their sales and marketing processes by leveraging the internet.

Based on Salesforce.com’s best practices, here are eight ways the internet changed enterprise software marketing.

1. Awareness

Before the internet, access to information about new products and solutions was limited to a few sources. Buyers became aware of solutions by attending a tradeshow, hearing about it from a colleague, reading about it in a traditional publication, or receiving a form of interruption marketing from the vendor such as a cold call from a sales rep or a direct mail piece.

In the internet-era, customers are much better at seeking out information themselves — and blocking out unwanted marketing messages. When buyers want to research a topic, they search for it on Google, check out blogs and news sites, and network with colleagues as well as the broader online community. Companies have much less control over this process, meaning B2B marketers must practice attention marketing. This means using search marketing so you show up when customers seek you out, as well as creating a systematic process of monitoring the marketplace and building buzz by participating in the conversations that are already happening.

2. Segmentation and Targeting

In 1991, Geoffrey Moore, the original technology marketing expert, advised that the way for companies to cross the chasm between early adopters and mainstream buyers was to build a beachhead with a niche focus. This focus influenced demand generation strategy: companies would target buyers in their niche and go after those buyers with rifle precision (often using expensive interruption-based tactics such as cold calls and VITO letters).

On the internet, you can’t always control who searches for your keywords and comes to you (though good PPC management software can help tune your bids so you only pay for keywords that drive closed business). This makes it important to have segmented offerings and segmented channels for different sub-markets. Look to the airlines and car manufacturers for examples of companies that are good at this. You need low price points for smaller buyers, and higher price points with richer functionality for companies with more complex needs.

3. Education

Ten years ago, information about your company and solution was not readily available online. The only way the buyer could learn more was a meeting with a sales representative from the company. That’s why buyers were willing to engage with sales so early in the buying cycle.

Today, the internet brings much more open access to information. As a result, buyers want to educate themselves before they speak with anyone from sales, and over 93% of prospects start their research online. That’s why the vast majority of activity on your website is from customers who are not yet sales ready (and why passing those prospects to sales is a bad sales-marketing alignment). To respond, B2B marketing professionals need to invest in their landing pages and websites to engage and capture prospects when they first find you on Google, and to nurture leads by giving them the content they need to progress through each stage of their buying process.

4. Trials

The number one thing prospects want to know is whether your solution meets their needs. The best way to get that information is simple: just use the product. By getting their hands on the solution, buyers reduce the risk that the solution doesn’t meet their needs — and the fear of failure that so often leads to inaction.

Before the internet, it was difficult to let customers trial the product. Because software needed to get installed on the customer site, trials were expensive. Because the software was so complex, vendors (perhaps rightfully) assumed they could not let prospects use the product without creating a bad experience. Instead, buyers were forced to watch a carefully scripted demo. Since demos were expensive, vendors only invested the time and money for large accounts already in an active buying cycle.

The internet has raised the buyer’s expectations about product trials. You can just go to Google and start searching, to an online poker room and start playing, or to blog tools and start blogging. Buyers no longer accept passively watching a demo, or waiting so long to get one. B2B companies that allow customers to choose when and how they experience the solution will go a long way to reducing buyer fear and building buyer trust.

(The ability to trial the software is one of the key reasons for the success and popularity of open-source solutions; users can just take the code and install it anytime, for free. On-demand software vendors should attempt to make it as easy, or even easier, to trial their solutions.)

5. Product Design

Because access information to information was restricted before the internet, the only way buyers could be sure a solution met their needs was to create a complex RFP (Request for Proposal) that spelled out every possible thing they might want to do. The need to get the most check-boxes rewarded complexity and encouraged vendors to jam-pack their products full of features. Unfortunately, it complicated the software, made it harder to use, and led to most features being unused by most users. Perversely, this very complexity is what made it impossible to let users trial the software, which in turn led users to create complex RFPs.

Vendors that want to give trials to their customers have the opposite incentives. They need to create solutions that are easy to use and easy to implement. Advanced functionality can be included, but it should become apparent only as the user needs it.

6. Sales

One area the internet has not changed things is the fact in a B2B setting, people still need to talk to people. Buying software online is not like buying books online. There is more at stake: your company’s data, your company’s profits, your job. People seem to need at least some human contact before making enterprise decisions, and people still like to buy from people.

However, the internet has transformed the role of the sales person. Before the internet, sales people were high priced elephant hunters with big Rolodexes, hired to create opportunities and "extract" deals from large clients.

There will always be a role for world-class sales reps to close business at large enterprises, but in the internet-era another role is required as well: inside sales. By leveraging the internet for awareness and education, marketing will generate thousands of leads that need some human contact. Inside sales can qualify these leads as appropriate, and depending on the volume and price point of your solution, inside sales can also be the best way to close many of your deals.

7. Events

As the internet reduces the amount of human contact with direct sales representatives, other channels of human interaction become more important. This explains why having a "physical" presence has been proven to increase sales for online companies, ranging from online brokers like Charles Schwab introducing branches to direct computer manufacturers such as Apple and Gateway opening stores.

It is not practical for most B2B companies to open a physical store (though Salesforce.com hopes to do exactly this one day), but events such as webinars, road shows, and conferences can serve a similar purpose. Just like with the Apple Store, buyers may still make their purchase online, but the direct contact helps build the relationship and establish trust.

8. Post-Sales Customer Experience

Lastly, the internet has changed how companies think about customers once the deal was closed. In a traditional software sales model, the entire license price was booked upfront, creating an incentive for the sales rep to close the deal, book the commission, and move on to the next target.

With the on-demand model enabled by the internet, customers don’t buy perpetual licenses. Instead, they subscribe to your service, just like they might subscribe to a wireless service. This makes the post-sales customer success critical, since if customers don’t like your service they can just stop using (and paying) for it. As a result, incentives are better aligned between the vendor and the buyer.

The implication for B2B marketers who think about total revenue (not just driving leads) is that managing customer success and reducing customer attrition becomes critical. Marketing should look at other industries, such as Telecommunications, for best practices to manage customer attrition. These include becoming embedded inside company processes, mining usage data for signs of attrition, and bundling complementary services.

Sponsored By: B2B marketing software from Marketo, coming soon.

Related Resources

  • http://thescrappysoftwaremarketer.wordpress.com/2007/02/12/8-ways-the-internet-changed-software-marketing/ The Scrappy Software Marketer

    8 Ways The Internet Changed SoftwareMarketing

    I just started to read John Millers blog about modern B2B marketing and ran across a great post about 8 ways the Internet has changed software marketing. Its a great read.
    /blog/2007/02/8_ways_the_inte.html

  • Alex

    This is a great article. One of the biggest hype these days is of “outsourcing”. There are lots of outsourcing firms pitching for projects of different scales across us, europe and australia. We had an interesting article about service marketing in an outsourcing industry on our blog, it may be worth reading.

  • http://www.worldslargestarticles.com Worlds Largest Articles

    Excellent Comment Post. I agree that awareness and education are aslo key factors to boost software sales. The internet’s instant global reach is nothing short of revolutionary.

  • Brian

    The internet has changed all these things and then some. You’re right, even ten years ago the internet was a very different place and businesses information was not easily found online if it was online at all. These days things are found easier and it’s also easier to reach a broad audience. Marketing through the internet has made many a company successful.

  • lrmtrainer

    Thanks for the post. I think hosted lead management software in general has been a big plus of the internet.

  • http://www.jeffpaulsuccessstories.com/ Jeff Paul Scam

    The Internet is a wonderful place for snowball effects. By visiting other blogs daily and spending at least twice as much time doing that as you spend working on your blog posts you will find that you are doing far better than many people at your stage in the blogging game.

  • http://www.jeffpaulsuccessstories.com/ Jeff Paul Scam

    I must say that the best way to get that information is simple: just use the product.

  • http://www.suyati.com Suyati

    Great read! I thinkawarenes is fast thing one b2b software selling firm needs to take care off. Unless or untill your placing your product in some local trade show or popular sites forget that you could make the sales happen wih you firm.I’ve taken for granted just how precise google results can be. Having a Droid has even further enhanced my dependency on accuarte google searches.

  • Pingback: B2B Marketing Blog Posts On Lead Nurturing, Demand Generation And More | B2B Marketing Blog

  • http://www.idstc.com MLM Software

    Thanks for your great post. I think good product and service are both important.

  • Anonymous

    great post about 8 ways the Internet has changed software marketing.

Jon (@jonmiller) leads Marketo's product marketing, strategy, and content marketing initiatives. He is the author of multiple Definitive Guides including Marketing Automation, Engaging Email Marketing, and Marketing Metrics & Analytics. In 2010, The CMO Institute named Jon a Top 10 CMO for companies under $250 million revenue. Jon holds a bachelor’s degree in physics from Harvard College and has an MBA from the Stanford Graduate School of Business.

Read Jon's Blogs

8 Ways The Internet Changed Software Marketing

Follow Us

Most Shared

Instagram Infographic

What Your Instagram Filter Says About You [Infographic]

true colors feat

True Colors: What Your Brand Colors Say About Your Business [Infographic]

Revenue Performance Management Infographic

Revenue Performance Management: Making the Top Line Top Priority [Infographic]

killingtimetop

Killing Time: How to Destroy Your Productivity [Infographic]

Evolution

The Evolution of Modern Marketing Automation [Infographic]

Top Articles

Tighten your belt!

7 Strategies for B2B Marketing during a Recession: The Definitive Guide

Evolution

The Evolution of Modern Marketing Automation [Infographic]

promo_top_b2b_blog_med

Big List of B2B Marketing Blogs

The ROI of Paid Social Media Advertising

The ROI of Paid Social Media Ads

100th blog post

Marketo’s 1,000th Blog Post: Our Modern Marketing Definition Revisited