While a part of the Slovenian business public is certain that they’ve reached the pinnacle of content marketing by printing and sending their magazine to their customers twice a year, digital economy is approaching a great new turnaround. In 2011 Google’s ZMOT research negated the long standing theory about the importance of the first contact of the consumer with the product before reaching the shelf, and now, less than four years later, the ZMOT doctrine is being negated by hyper-connected customers in a way.

One and a half billion people are connected on Facebook and hundreds of millions on other social networks while everyone on earth carries (statistically) more than one mobile device. This created a different culture of digital existence and communication. The connectivity that is brought on by technology created a hyper-reachable audience for everyone. And every audience has their own audience down the line. This connectivity is so intense that scientists were able to calculate that getting from a certain point on Facebook to a random other point requires only 4 levels of connections between audiences. The speed of communication between audiences has reached such levels that social networks are a news source for reporters today. News is no longer something that the media serves to their audience – it is the other way around.

Social networks as a primary source of information

All of this changes buyers – yours as well! Today’s buyers are different from what they were years ago and expect different services from companies that they are in touch with. They are aware of their power. Every one of us is a part of the media in a way. Experience is shared in real time and people often rely on their social networks for finding information that they could have found themselves. Google used to be the first point of contact with a brand (ZMOT), but today, more often than not, people turn directly to social networks to find solutions that are recommended by their social circle.

Communication through social networks is increasing all the time. The trends of spread out information sources and opinions of other people that were noticed in the millennial generation is spreading to wider demographics.

We turn to social networks to find solutions in our social circle instead of asking sales people. Click To Tweet

The purchasing power of generation Z

I am completely serious when I say that everything is changed in today’s digital economy, since it is mostly shaped by millennials. Just think about this: they’ve turned a brand into more than just a logo, it now includes a broader understanding of the brand as a consequence of the experiences it creates. Experience does not only include experience with the product, but experiences with connected events: from sales to support and general communication. Millennials spread communication faster than companies can control it. Much faster. Especially companies that believe in the “weight” of paper communication. And millennials are followed by generation Z – born after the year 2000.

Today’s 10 and 15-year olds don’t know any other reality than independent Slovenia, free market and instantly reachable internet. Stationary phones are relics for them, while equality regardless of gender, sexual orientation or race is something completely normal. At the end of the day, they know only this world where the American president is black. Newspapers do not exist for them, they are hard to reach on Facebook or Twitter. Try Snapchat. Haven’t heard of it or don’t know how to use it for marketing? You might have a problem. The Zs don’t communicate with words, they understand graphics and emojis. Information must be short and to the point. They recognize platitudes and despise them. They don’t consider television and radio relevant or just don’t pay attention to them. If millennials are using three screens, the Zs are using 5. Should you be afraid that this generation will soon take over the market? Only if you don’t intend to change.

Should you be afraid of generation Z taking over the market? Only if you don’t intend to change. Click To Tweet

Of course, it is hard to believe in the need for change. People don’t like changes and the same is true for companies. It’s easier to lie to ourselves and believe that this doesn’t affect us. This couldn’t be farther from the truth – just go for a coffee anywhere and you’ll see that having coffee is still a social event, but everyone keeps looking at their screens. And if millennials are aware that this wasn’t always standard behavior, this is completely normal for generation Z, so it should become normal in marketing as well.

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I’ve been haunted by a salesman for the last 5 weeks. He keeps calling me on the phone, sending text messages and emails. He didn’t come knocking on my doors yet, but he’s been persistent about it. This seems to be his goal since he believes that he only needs an hour of my attention to show me something that will certainly change my life. On the other hand, I’m not at all interested in spending an hour of my time until I know exactly which problem this will help me solve. I won’t reveal the name of this company that focuses on persistence and rigorously follows outbound marketing principles, since I don’t want to answer emails from offended managers. The young salesman and his boss will certainly recognize themselves in this text if they read it.

I’ll wait another half an hour. If she isn’t here in an hour, I’ll leave in two.

This reminds me of a high school kid that was infatuated with a girl he met at his cousin’s birthday party. He got her phone number and email address from his cousin after the party and was set to work the lead. Since she didn’t respond to his email, he called her after two days, but the conversation was over quickly, because she was “at the cash register in a supermarket”, and she told him she’d call him later. Since she didn’t return the call, he called her again the next day. She didn’t answer even though the phone was ringing for a long time. He decided to send a text message to let her know that he called her and that he wanted to talk to her again. She didn’t answer for two days, so he was pondering whether he should send an email or text message or maybe even try calling her again.

We all know that the young man won’t be any closer to his goal with an additional call. We’re fully aware that he should do something that draws her interest before calling her. If he doesn’t move on that front, there’s no use in trying to reach her in other ways. This is how I understand sales.

If you think that your sales process and CRM system are great because your sellers don’t lose their grip on any of their leads, think about the problems of this young man. Your offer will only interest those who are aware of their need and like your approach.

Buyers used to be afraid of sales people. Now it’s the other way around.

I keep saying that the role of sales people has drastically changed because of the internet and the digitalization that comes from the mobile revolution. Salespeople used to be the ones with all the information about the products, and the buyers mostly knew only what they heard from them. The salesperson was a key information source for the buyer and some business deals could be made because the buyer wasn’t educated enough.

Committed buyers will find their own information. They no longer need salespeople for that. Click To Tweet

It’s just the opposite today. Manipulating uninformed buyers is getting harder and harder. Businesses that prey on uninformed customers are failing if they didn’t fail already. Committed buyers will find their own information. They will check all the information that is available online, analyze it, and compare different sources or use experiences of their friends on different social networks. Language is the only hurdle for potential buyers, since information is globally available and only a click away. It often happens that buyers are more familiar with the product (and competing products) than the salespeople they meet at the end of their customer journey. We read about our condition before visiting our doctor, read about people before we decide to go on a date… We’re used to the fact that almost everything we need to know is available online.

A deal requires a certain amount of fondness on both sides.

The digital transformation that is required by the new economy changed the relationship between sales and marketing. Educating the buyer, following the customer journey and adapting the online communication to individuals is the job of the marketing department nowadays. Marketing automation enables you to monitor every visitor that shows interest in your online content. Their digital trail shows you what they’re interested in and how interested they are. This enables you to predict the stage of their customer journey and see what they need (based on statistics of previous buyers) to face their fears and decide to contact you and buy from you.

A Lead Score tells us how interesting the offer is to your lead.

To simplify the overview of buying readiness for individual buyers, we assign points for activities of every visitor. The cumulative total of these points is called the Lead Score which is a relatively good indicator of our attractiveness as a provider. We also use an Engagement Score which eliminates visitors who just happen to be researching for their term papers or unemployed individuals who just want to educate themselves, but explaining the Engagement Score would require more words than most readers of our blog are prepared to read.

A Lead Grade tells us how interesting the lead is to the provider.

A more important realization is that advanced marketing automation systems offer the possibility to evaluate the buyer according to the data that visitors offer online. Let’s say that FrodX is only interested in business buyers with a larger sales team, product or service that requires a long and well-considered purchasing process, and who act like our previous customers when studying our content. Such ranking of our leads is called Lead Grade (lately it’s been called Predictive Lead Score).

Why is lead selection required?

The more aggressive your marketing is, the more bad leads it acquires which increases the cost of acquiring new customers. Unfortunately, the intensity of marketing activities does not increase sales linearly, the growth of sales is logarithmic. This is why extremely active marketing can kill sales if they use old lead qualification methods.

A business deal can only be made if you’re interested in the customer and vice versa. Click To Tweet

Let me explain with an example. A car dealership will not profit if it’s full of people who can’t afford to buy their cars. The salespeople will lose time dealing with them and fail to notice proper leads. This is why companies must learn to recognize which people who show interest are interesting to them. I call it defining their own sweet spot. A business deal can only be made with customers who find me interesting while my offer is interesting and reachable to them.

If you think I haven’t called you because you’re not interesting enough for FrodX, I would like to put your mind at ease. I am the only salesman in our company and I can only handle two quality sales meetings every week. I could barely even handle all the invitations in the last year and a half. But it’s also true that it’s much easier to write a blog post than to bother people over the phone. Whether I want to or not, I think about my high school years and all the girls I called too many times.


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Ps. If you need inspiration for drawing customer interest instead of betting on persistence, I recommend you read this manual.


If your answer is “because of the price”, you are making a dangerous mistake.

To understand the patterns of decision making, we have to dig into human nature. We have already established that we rely on the “primitive” parts of our brain which controls emotions when making decisions, rather than on our cerebral cortex (which supports our analysis and rational data processing). This is tendency to abandon reason is even more evident in cases when our decisions are important, or when they are accompanied by a sizeable risk. Danger and fear are the primary influences that push us into subconscious decision making.


Source: http://www.birdsasart-blog.com

This is an evolutionary trait, one that we have developed over millennia, trying to survive. When our ancient ancestors walked out of their cave and saw a bear in a raspberry bush, they received two pieces of information at the same time. As a rule, those who focused on the berries over the bear didn’t get to spread their genes to the next generation. Those who stopped and thought about the bear’s intentions, whether it’s the same bear that ate their neighbor yesterday, or pondered if the bear is alone, also didn’t stand much of a chance. History was written by the cowards who ran back to the cave at the first sight of a bear or even an ominous shadow.

This brings me to the most important pattern: we focus on negative information much more than positive information. We react faster and retreat to established patterns when we feel threatened. Innovation under pressure is rare.

This pattern is not only useful for tabloid media, it also has practical uses in marketing. When you are walking down the street, you probably won’t stop and pick up a coin from the ground. On the other hand, most people will stop and pick up a coin if it falls from their hand. Our reaction to loss tends to overwhelm our desire for benefits, and when you communicate the benefits and advantages of your products, don’t forget that they also solve problems or prevent losses.

Of course, don’t be one of those marketing people – the ones who spend most of their time berating and threatening their audiences. Still, you should be aware that the sense of danger and loss is often a stronger argument than the promise of a better future.

Bugs in the code – repeatable short circuits in decision making

We can’t process all possible data alternatives in making our decisions, so we tend to jump to conclusions. Our most cowardly ancestors had the best chance of survival and we continue to use interpretation of limited information to come to conclusions today. The process is called heuristics, and it defines a process of problem solving and decision making with limited and incomplete data to draw “logical” conclusions. We simply don’t have enough time to collect all the information, so we decide on the basis of known patterns. The best possible result has never been our goal, but reducing the possibility of a disaster was.

A quick example. Have you ever walked into a restaurant on your vacation only to find it completely empty? Did you sit down and order or did you quickly go back out to the street to find another restaurant? Even though you cannot remember the concrete event, there is no doubt about your decision, is there?

Let’s look at the information that was available to you. The outward appearance of the restaurant must have been decent, since you decided to enter. They probably displayed a menu somewhere near the entrance, which means the price was acceptable as well. You may have even decided what to order. You have not heard anything bad about the food and haven’t even seen the waiter yet. There is no rational reason to doubt the product or service.


Source: http://ronfjones.com

This shortcut in decision making is called social proof and it is one of the better known examples of heuristics in marketing. If we cannot get a complete picture from the available information, we focus on what others do.

This case is one of the pillars for the existence of brands, sponsorships and similar identification. A brand has a story, a promise, but the people using this brand are much more important than these things. If we see it the brand often, especially in costly advertisements, it means it’s a big brand and probably safe. If it is used by people like us (or people we admire – such as sponsored athletes and celebrities), we will even directly identify with this brand.

Sounds so clear and simple, doesn’t it? Still, you wouldn’t believe how many times I’ve seen companies refuse to list their references, thinking that their competitors will go after their accounts. An empty restaurant is not a good competitive strategy.

The dark side of heuristics – passiveness

Resistance to change is the most common reason for irrational decision making.

When people don’t have enough information or the information does not carry a strong enough positive or negative message, nothing will happen. If there is a lack of information, our brain always includes an additional argument of “an unknown danger in the bush”. This makes us all a bit skeptical and there is a word used every day that describes this problem – “catch”. A stranger offers you a free gift? No thanks, there must be a catch. There must be a negative consequence I cannot see which is much worse than the benefits I would get from the gifts.

Free gift? No thanks, there must be a catch. Click To Tweet

Low-cost airline carriers are a good marketing example. Have you ever asked yourselves why they keep nagging you with the allowed luggage size and why they make you pay for every extra item? Have you ever asked yourself why they are so eager to tell you that everything on board, short of water, is charged extra? Even the so-called coffee they serve?

If they didn’t tell us what we would have to give up when we book a flight to London for 40 EUR, no one would dare fly with them. We would just assume that the airplanes are flown by unlicensed pilots or that the airline does not maintain their fleet or that the flight will be cancelled if anything goes wrong. The scenarios that we unconsciously create when we don’t have enough information always focus on worst cases.

These patterns are only the tip of the iceberg

03_Ledena gora

Source: www.psykiatrifonden.dk

In the coming days, we will discuss even more specific examples, but you have made a big step if you remembered the basic principles. The next time the buyers stubbornly decline your product even though it’s perfectly clear it is useful to them, think about the most common unconscious barriers that hold them back:

They do not get the feeling that your product saves or prevents a loss
Even though it offers clear benefits, it does not prevent loss. Your product is the coin on the road and not the deep pocket that protects them from losing the coin they already have.

They don’t get the feeling that the product is a “normal” choice
Tell them that others have tried it and were satisfied with it. The product category is a regular choice of many.

They do not have the feeling that they know and accept the risks
Complex products and solutions can cause a disaster in hundreds of different ways. Remember the old IBM slogan “Nobody ever got fired for buying IBM”.

In the end, don’t forget that we are fighting feelings. We cannot beat feelings with data, but with stories that customers can identify with.

If you have a feeling that your story hurts the bottom line of the company, since it does not approach the emotional components of a purchase or establish trust required for every customer choice, you’re probably right.


Source: https://www.mobileaction.co/

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I spent the last weekend in Bovec with my son. We were there for his golf tournament, so naturally, we arrived a day early to play a practice round. After we played our game, we had a drink at the clubhouse, where we joined a group of locals who had a few glasses already. We started talking, and I was asked about what I do for a living (speaking of which, my children are still embarrassed in school when they have to explain what their father does. The children of cooks, doctors, mechanics are lucky in this respect).

When I said that I am developing marketing in a world where marketing no longer works, I struck a nerve in a man who owns one of the camps in Bovec. He began to explain that despite all of his marketing activities, his revenue decreased by over 30% even though his reservations were 20% better than the previous year, and 90% of overnight stays come from regular guests. “The weather forecast from Ljubljana ruined me! Even though there was no rain in the end, the forecast said there would be. While everyone in Slovenia was drowning, we had sunny days in Bovec.” I waited for a bit for him to finish his rant, and then asked him a few questions, well aware of the fact that people will do everything but face their problems…

People will do everything but face their problems. A look from the outside is sometimes required. Click To Tweet

This man has a very simple problem. He needs to persuade his existing customers or, even better, the customers that made a reservation, that mathematical weather forecast models are not always accurate and that this wonderful valley is blessed by a local microclimate. We discussed how much a guest costs him and quickly established that the costs a visitor incurs is almost zero. All of his costs are fixed campsite costs, since he needs to provide the same services to run a camp – whether its half empty or full. I wondered, how much could he make with an open camp? Is it better to have an empty camp since the weather forecast from Ljubljana says it will rain, or would you rather announce that camping will be free of charge if it rains, even though the local weather forecast says there’s a high chance of it happening?

My advice was simple: “If you are sure that the local wise men who have been living in the valley for 80 years are able to predict the weather better than the weather agencies, and you know on Thursday that the weekend won’t be a rainy one, focus all your marketing efforts into convincing your regular guests and guests with pre-season reservations, that they should trust the weather report by the locals. This should be your key message every Thursday. If you provide assurance that camping will be free or significantly reduced in cost if it rains, customers will believe your local weather forecast. And even when you’re inevitably wrong, they won’t blame you.” Lawyers don’t represent themselves and doctors go to other doctors. When we develop our own services and processes, we ask people we trust outside our company.

When we develop our own services and processes, we ask people we trust outside our company. How about you? Click To Tweet

Habits are the biggest barrier in strategic decision making – especially routines that accept that some things cannot be changed, and others cannot be influenced. Everyone who visited us for a cup of coffee got an interesting perspective on their problems and solutions. Some of them have later became our customers, and others will probably join them soon.

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PS. You are welcome to join us for a cup of coffee as well.

[sf_button colour=”orange” type=”sf-icon-reveal” size=”standard” link=”http://en.frodx.com/contact/” target=”_blank” icon=”ss-mug” dropshadow=”no” extraclass=””]I’m coming for a coffee[/sf_button]

A couple of months ago, I had a talk with my boss regarding marketing success measurement. We were trying to figure out how to measure success in marketing and how to define whether my paycheck should be doubled or cut in half.

An absurd situation in a company where EVERYTHING is measured in marketing. The organization knows everything about their leads except their shoe size (and if they went into the shoe business, they would have that information too), and measure the success of every web page with an accuracy of two decimal points. It seems absurd that we had trouble figuring out what constitutes good or bad performance of the marketing department in an environment where a huge screen with charts of current website visitors and conversion rates hangs on the wall.

The discussion started with two usual positions. The marketing director proposed company revenue as the deciding factor, and I was claiming that this shifts the responsibility of the sales department’s performance to marketing and that the contribution of marketing should be measured directly – by generated leads.

The contribution of marketing should be measured directly - by generated leads. Click To Tweet

We quickly realized that none of us were right. Revenue is often a distant metric that cannot be used for evaluation, but on the other hand, it’s also true that marketing could provide 100 times as many leads if they offered free handouts in exchange for data. Of course, such leads would not generate any revenue for a company selling software to industrial customers.

The benchmark for successful marketing is somewhere in between. It still requires lead evaluation, but can only measure qualified leads, which become the responsibility of the sales department. That leaves a key question – what is a qualified lead, exactly? A customer who shows interest? Maybe it’s a company that you would like to reach out to? Practice shows that qualified leads are those who meet both criteria, which is what makes measurement so difficult.

This diagram provides a simple view of four lead segments that every company has to deal with. Only the ones in the top right part are ready to talk to sales. We get into trouble the moment we try to determine criteria for such segmentation. The sales department has to deal with the fact that a determined (and known) number of leads are so good, that a fizzed opportunity can only be assessed as a mistake. Sales would, of course, like to think that only the leads who have already asked for a proposal are considered qualified leads.

Marketing, on the other hand, must face the fact that only 25% of their leads are useful. Certainly, many leads flow from the blue squares into the green ones (the diagram would be too complicated if time was added to the equation), but that’s not a consolation.

… this is why 75% of Frodx’s leads are disqualified – not permanently, but relegated to a waiting list. If and when they mature, the sales department will focus on them. Until then, we will mostly communicate through blogs and webinars.

We disqualify 75% of leads – not permanently, but relegated to a waiting list. Click To Tweet

Now we ask ourselves some hard questions. Do you measure success in marketing so both the sales and the marketing departments are satisfied? Do your activities focus on the green square in the diagram? When we notice that you have seriously decided to move in that direction, you will be a step closer to being contacted by our sales department.

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P.S.: Accurate measuring of marketing activities (and lead quality) requires a structured approach to marketing. Our free marketing planner will definitely help you approach evaluate your marketing practices.

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