Much has been written about the way in which software companies are built in the era of cloud computing. With minimal infrastructure required, browser-based apps are imagined and built in record time. But even the greatest technology cannot make an impact without a following of loyal supporters. What happens next, after the app is available, is what separates cool ideas from great businesses.
The same forces creating an ideal climate for software startups are also rewriting how cloud technology businesses, that is to say, practically all growth-oriented tech companies, are marketed.
Fueled by customer appetite for browser-based apps and an increasingly decentralized buying process across the enterprise, entrepreneurs see numerous opportunities to either disrupt established software companies or create entirely new segments. Customers see numerous vendors to select from, try and buy. Opportunity, it turns out, cuts both ways.
In a hypercompetitive environment, marketing is what makes the difference in driving a company’s reputation and success. And in our current climate of marketing, companies that plug the brand into the online conversation on social media are winning the day.
The journey tech buyers take today is accelerated compared to just a decade ago and by one measure: 67 percent of it is now done digitally. Buyers of emerging B2B tech products aren’t just in IT; decentralization has become the rule rather than the exception (purchasing of legacy or on-premises systems is another matter).
There are dozens of cloud-based products bought and used across companies today that were decided by individual functional areas, from HR to sales. That’s not news, but how these decisions are arrived at might be if you are still used to the industrial selling era when sales reps, with field engineers in tow, traveled company to company to do demos.
A 2015 study by Gartner showed that B2B tech buyers spend more time with user-created reviews during phases of exploration, evaluation and engagement than on company webinars, blog posts and podcasts. And according to research by Carnegie Mellon University’s Heinz College and Dell, 75 percent of B2B buyers are influenced by information found on social channels.
No tech company starting today would consider printing massive user manuals or doing once-a-year forklift software upgrades. Being agile is central to software development, yet the marketing of software companies continues shackled with legacy marketing approaches that are divorced from the customer buying journey. Tradeshows and email marketing (rebranded as marketing automation) are insufficient for software brands to reach prospective customers of cloud-based apps.
Marketing departments have a tough task ahead of them. Surveys suggest marketers understand this though only one-third have a plan on how to go about it. According to industry analyst firm Altimeter, when asked to rank top social business priorities for 2015, digital marketing executives gave the highest ranking to developing an ongoing dialog and engagement with customers. Yet in the same survey only 36 percent believed they had a multi-year digital strategy that includes social initiatives.
The marketing challenge gets compounded when budget decisions are not aligned with how customers are discovering and buying software.
To illustrate the point, consider that just as B2C marketers are jumping ship on poorly performing online display advertising, B2B marketers are waiting to board. According to a Dun & Bradstreet survey, 78 percent of B2B marketers will spend up to 50 percent of their budgets on programmatic advertising (also known as automated advertising) in 2016. The dollar commitment is remarkable when you consider one in three digital ad dollars are lost to fraud.
While B2C brands get all the attention, a handful of software tech companies have stood out from the pack in recent memory through innovative communications and marketing that has incorporated social media. One excellent example is a company most people reading this have likely heard of. Trello’s upward momentum as the darling of project management software has continued unabated, and they recently surpassed 10 million users – a remarkable number for project management software!
From what company co-founders Joel Spolsky and Michael Pryor have said about the development of the company, it’s clear that Trello has been attuned from the beginning to what customers are saying through the company’s focus on social media. From user questions on functionality to feature requests and bug reporting, Trello has engaged in a very public conversation with its customers while inserting useful tips and examples along the way for individual users or business teams evaluating the product. Trello has consistently cultivated its audience, creating a close connection with its customers. No surprise then that they have such a large social media following.
Trello’s transparency on social media keeps the company at the top of online conversations about project management, attracting more followers in a virtuous cycle. By committing to social media from the beginning, the company has made a marketing virtue out of a communications and support necessity. There is valuable insight here for other tech companies on how to reimagine business communications and transactions to create more openness with customers and prospects. Companies that continue to view social media as optional or as separate from marketing communications will struggle to keep up with nimble competitors.
In our experience working with tech clients, there are several reasons companies aren’t following Trello’s lead. Leaving aside the fit question (not all customers are as resourceful as Trello’s), social media is time consuming. Most marketing departments today aren’t structured or resourced to monitor and respond to online conversations on a continual basis. Corporate marketing at tech companies has been conditioned over the years to handle staged programs with defined processes. Social media is anything but and more akin to – and here any comparison to social media is bound to come up short – your 800# wherein each conversation has the ability to make an impression but requires lots of training and monitoring.
Another reason social media isn’t at the center of attention for more B2B tech marketing is that there isn’t role clarity. If conversations over social media are about product usage then does it perhaps belong in support? Is there a sales force responsibility here to cultivate relationships with prospective customers?
In recent years, having exerted resources to churn out new material on an endless content treadmill, social media within B2B marketing also seems to have fallen into the trough of disillusionment. Gartner’s Hype Cycle reminds us that this stage is inevitable after inflated expectations and before true productivity kicks in.
CMOs have been trying to figure out how to measure results from social media marketing. Meanwhile customers have accelerated their usage of online channels to discover, learn and share their experiences with others.
The challenge facing B2B marketing today isn’t how to create content, or even to measure results, but how to join the conversation already happening. The bigger danger for nascent tech companies is being absent from the online dialog altogether.
There is certainly some amount of gray area here. Yes, online social media chatter is about cultivating relationships with prospects. No, the outcome is not directly relatable to lead generation in every instance. And, yes, some of what emerges will end up being handled by support, HR, legal and other corporate functions.
The untapped possibilities of social media to impact the entire organization is why this is a clear opportunity for marketing departments to lead the way forward. Marketers are ideally suited to the task: they are strategic, have wide operational latitude and are expected to be at the forefront of marketplace developments.
In trying to figure out how to build their social media capabilities, marketing departments can benefit from replicating other resources businesses have learned to adopt to great success. Two examples come readily to mind: contact centers and HR administration. No serious business today can be entirely without telephone customer support; it is deemed vital to maintain and enhance lifetime customer value. Yet companies know they can still achieve customer satisfaction while outsourcing tele-services to third parties that manage the hiring, training and staffing of contact centers.
The same approach holds true for many HR and payroll functions such as employee recruiting, training, onboarding and benefits administration. These functions are central to well-functioning companies; but third parties that specialize in calculating withholding taxes, managing 401(k) plans and delivering workplace sensitivity training readily handle them.
In both examples, the sponsoring department continues to manage external resources for the benefit of the entire organization.
Social media is here to stay and will only become more central to customer communications as younger generations become an increasing force in our economy. Now is the time for corporate marketing departments to think creatively about how to leverage this innovative, dynamic and highly public form of communicating.
- The Social Business Journal, 2015 Vol. 3
- The 2015 State of Social Business, July 28, 2015, Altimeter.
Ren A. Bloom is CEO of San Francisco-based marketing firm Mercury360.