(upbeat music) - Hello and welcome to the B2B Playbook Podcast. Each week we discuss strategies and tactics to help B2B businesses grow online. - We're your host, Kevin and George, a couple of digital marketing professionals. We've waited through the noise and made the mistakes so you don't have to. - The B2B world has changed and you need to put your customers at the heart of your marketing. - We'll cover how you can use our framework, the 5B's, to create a brand that customers are ready to buy from, love and advocate for. - We'll get insights from successful people in the industry and cover the latest trends to keep you on the cutting edge of the B2B world. - If you're interested in B2B marketing strategies and tactics that work, then this podcast is for you. - Subscribe to get the latest from the B2B Playbook first. - Remember, successful B2B marketing starts with the buyer. Welcome back to the B2B Playbook. This week's interview is with Alan Hale. Alan is the president of Consight Marketing Group where they combine consulting and voice of the customer market research for B2B markets. He's been a long time friend of the podcast. We see eye to eye on many things B2B marketing. You can tell that Alan is someone with a wealth of knowledge and experience in marketing. It's so great to see people like that openly sharing that knowledge and experience to better ask marketers as an industry. - Yeah, an absolute honor to have someone like that on the show and to have the opportunity to discuss with him and give us that great insight on what it means to do customer research and ultimately B2B marketing right and avoid what he calls marketing malpractice. Listeners and viewers, here's that conversation with Alan. - Welcome back to the B2B Playbook. Listeners, as you know, we rarely have guests on our show. Instead, we select a few true experts who align with our view that B2B marketing is more about people, not platforms. Today, our special guest is Alan Hale. Alan Hale is the president of Consight Marketing Group where they combine consulting and voice of the customer market research for B2B markets. He's been a long time friend of the podcast. We see eye to eye on so many things in B2B marketing. And I'm just very excited to dig deeper into his vast experience, particularly when it comes to the voice of the customer research. Alan, thank you so much for coming on the show. - My pleasure, I'm a great admirer of you guys and I do think we're like 80% aligned, which in this market is pretty good. - Yeah, absolutely. Look, everything that you post, I just find myself nodding and saying, yes, I love this. I feel like I've learned a lot from you, particularly on the voice of the customer research side. And so I'm very excited to share your expertise with the rest of our listeners. Maybe we just kick off there, Alan. A lot of people probably don't even know what voice of the customer means. So could you just tell us what is the voice of the customer and why is it so important? Why are you banging on about it every day? - I don't know about every day, but I bang on a lot, a lot. So let me tell you what it's not. If you type in VOC in a dictionary, you may get volatile organic compounds, so it's not bad. So voice of the customer, it's what the customer say, perceive and behave regarding your company, your brand, your product, your service, everything from what they like to don't like. So let me just start from a big level approach. Bain and company estimate that only 21% of B2B companies identify and act on insights, that's one in five. And what I have seen is it's probably lower than that. And some people are trying to use surveys, quantitative surveys alone for voice of the customer, and we'll jump into that. But what VOC does is it allows you to make better business decisions. It allows you to minimize the risk of failing. Once you have customer obsession as your North Star, you're more likely to succeed in the marketplace and your competition is less likely to copy what you do, because they're not doing the same thing you're doing. So it doesn't guarantee success, but what it does, it makes it a lot more likely to happen. - One in five is a shockingly low statistic, but I'm not really shocked by it after speaking and working with so many businesses. And I'm sure that's probably the same from your side. Everyone seems so afraid of collecting these insights in the first place, and then actually acting on them to turn it from a cost item on your budget sheet to actually acting and taking that next step and getting the most out of it. It seems like people aren't doing that either. So there's obviously some barriers there too, Ellen. - Yeah, so let me back up just a second, George. People, a lot of people are doing surveys. The 21% from Bain is probably overstated, because when I look at their customer base, they're selling big multiple projects. I've run into a lot of B2B smaller companies. And I have to say that first of all, they tend to be product led. They believe their product is enough to drive them or their activity led. Let's do a little digital marketing here. Let's do a little stuff here. Now, there are a lot, in my opinion, based on some discussions, there are a lot of hurdles for doing this. Some people say it's too costly, it's too long. The reality is I think the major hurdles are a paradigm. We don't need to do it. We know our customers. We don't need to do any outside research, which that's the number one killer on company gravestones. There's also a fear factor. They fear that they're gonna find something they're doing wrong. And the CEOs, in many times, don't see the value of doing this. It's not actionable. It's a lying item expense. And the CMO or Vice President Marking underneath doesn't wanna battle the CEO because they'll get fired just already a short tenure. All this wonderful stuff. And I'll put my hand up and say, Alan, I was one of those guilty marketers that rather than speaking to my customers and speaking to customers and finding out what was important to them and deeply understanding them, I would just say, you know what? Let's try this message. Let's test it. Let's put some budget behind it. And let's see which one they click on most. And oh my God, I was just guessing taking stabs in the dark, burning budget. And now I like to think of myself as a born again, real marketer. - I'm gonna put the board together. - Yeah. And it's so much easier when you just ask them. - So I'm gonna give you two examples that might not tie to anything. So we did work for a company in Atlanta. And the CEO never wanted to do any research. I didn't believe in it. They were bought by another company and then we started to do joint interviews 'cause I was trying to train him and trying to train him on understanding the importance of doing VOC. So we did some research onsite with one of his customers. And I asked a ton of questions trying to train him at my usual questioning. We rode back in a rental car I had and he didn't say anything for 20 minutes. And then his eyes lit up and he goes, that was interesting. And for him, that's a long speech. So that was one example. Another example, there was someone I linked in that all of a sudden was appointed to do research, never done it, never did it before. So I had pity on this person. I drafted eight questions when she went out and talked to people. And she said it was the most eye-opening experience of her life. She finally understood what the customers wanted, what they were doing right, what they were doing wrong. The objective here is to not, maybe it is, opening eyes of internal people, but the objective is to make good strategic decisions that leverage the knowledge that you've gained through insights. - That makes so much sense. And we've experienced firsthand the benefit of doing that, people that we've worked with when we've got them to do this research, we've got to see them have those light bulb moments. And it's so exciting to see a market, I feel that for the first time. And then maybe also think, oh my God, I've been wasting so much time. It's amazing what you find that if you just ask. - So part of this, George, is to get the client to meet their objective. Some more new products, enter a new market. But some of this, I think we have a responsibility because this is a very great tool to use to try to get this in the DNA of the organization. Otherwise they go to us every 10 years, help us with this. They, and we can pick this up later, but they should be doing this all the time, really all the time. And it shouldn't just be, oh, the last time was eight years ago when we had another product. That's when you lose touch with your customers. And so I think there's an advantage for a customer to do this and be trained by an outside research firm and have the research firm do it. And then what I've been proposing is like a 10, 30, 90 rule. Do it ongoing, proactively, continuously. One day every two weeks, the marketing person needs to be in front of a customer. And if they're not, that's marketing malpractice. You only get certain number of those strikes and you get fired, in my opinion. The other departments like engineering, new product development, customer service, they should be at every 30 days talking to a customer proactive, CX, okay, customer experience. Yeah, and that's another topic, but let's not measuring everything and let's do something. And then the CEO or the C suite, they should really each be assigned a platinum account or two and every quarter go see 'em. How we doing, what can we do better? What don't you like? And I'll just say, one of my hero CEOs was Lou Gerstner that went to IBM. IBM lost their way. It was all blue iron, do this, do that. And he came in and he visited his tap, I don't know whether it was top 20 customers on site. He didn't just call him. He said, okay, what are we doing? What are we doing wrong? What do we need to do? And he brought that message back in IBM and blind his sales force and operations and everything around it. So I know I'm going in a thousand directions here, but each of your questions has a lot of ways to go. Sorry to interrupt guys, but I need to let you know that our next cohort of the B2B incubator is launching at the end of May 2024. If you don't know, the B2B incubator is our program that gives you the strategy, the templates and the tools to drive demand for your business in 12 weeks. We keep you accountable with live Q&A sessions and make sure that all your questions are answered. It's designed for small in-house marketing teams with limited time and budget. We've had B2B marketing managers, CMOs, marketers in demand-gen roles, content leads, growth marketers and more all go through this program. They're all now executing the demand-gen strategy that they created in the program. And some are now even contributing as much as 80% of the pipeline to their business after applying the principles from the program. So if you're stuck on the activity hamster wheel and you're ready to be your more effective marketer that contributes to the business, next time you take that first sip of coffee in the morning, head to the B2B incubator.com. Apply now, there's only 10 spots per cohort available. The B2B incubator.com. Okay, back to the show. - Yeah, absolutely. And is that what you mean when, 'cause I've seen you say that businesses need to be taking an outside in approach, not an inside out when it comes to their product and how they take it to market. Is that what you mean there? - Yeah, so inside out is more than just product to me. And when I post, sometimes they have a picture of someone wearing their pants inside out. So inside out means we believe our paradigm, we know our customers, we know what we're doing, and that's just a terrible way to run a business, okay? Outside in is you're reaching for your customers and stakeholders, vendors and all this and taking their input inside so you can deliver. Now, I'll give you an example. So what I have seen is companies design a product. It either doesn't sell or it's in their warehouse and it doesn't sell. So you're pushing a product like a dope pusher versus getting inside from the customer, meeting their needs and demands. And whenever people talk about marketing, they jump to product lead, they jump to product fit, they jump to tactics. But what I don't see is a stage in there where let's go out and figure out how to meet the customer's needs and delight them. How do we make them raving fans? Both in terms of the product, in terms of how we service. And I'll give you one example if you want. We were doing work for a laboratory testing equipment and they had a new gen product that got stuck in the engineering design, I think like about 14 months or something. And they were arguing which features to have. And we went out in the market and we were not born with all the methodology, but we narrowed it to 12. And out of those 12 features, four of them were wanted. Two of them were critical. And they were so critical they'd pay extra for them. They didn't want the other features 'cause they make it too complicated and too costly. And there was a set of features that they didn't have on this next gen product that they wanted. So what this allowed to do was have the engineers focus on what was necessary for the customers, get it out of their department, launch it quicker, profits came quicker. But again, that's an example of outside in. You go determine the customer needs, wants, and then you make sure your product or service fits that. And it was just, and the thing that drove them to use outside research was they were spending hundreds of thousands of dollars of engineering time and getting nothing for it. And the CEO is just perplexing. He was just, I don't understand, I don't understand. You don't have a true north to do it. But when you have your engineering department doing whatever they want, good outcomes usually don't happen. - Yeah, that's a great example. Really illustrates the real benefit of doing this work and like straight away the actions that you could take off the back of it. Like these are the features that we need to work on. These are the ones that are critical. These are the ones we can charge more for, which can drive the business forward. So there's so many great actions you can take off the back of it. And in that example, you've given us, was that taking a product to market for the first time? It was a product that was-- - It was an existing product, but a next generation product. So what we did as part of the studies, we got the product features. And then we understood things like what other equipment it had to connect to. And then we understood training. They just said, we're gonna dump this out in the market. And it was totally different. It was all digital, it was calibrated. And so we needed third party service people. But again, I'm not trying to pat myself on the back and said we were brilliant. Although I think we did a good job, but it's like when you start with the customers and map it out in terms of product, in terms of features, in terms of service, in terms of someone being on set, whatever they want, that's your value proposition. And that is very difficult for competitor to copy if they haven't done the same research. And by the way, normally everyone's the same, they don't do the research. And I think it's why we end up getting so many marketers when it comes to their own positioning and messaging. They often go to their nearest competitors, take what's on their website, maybe just change it up a little bit according to what they think they do best. And that's what they end up testing. - So what I had someone at LinkedIn write me is, all you gotta do is copy what the competitors do. First of all, they may not be right. You may not have the same core competencies. And I said a better approach, I would suggest, is based it on what your customers want, and then differentiate between your positioning and your branding versus the other competitors, that vice versa. And so this is more than just product. You can do it for branding. What does our brand mean to you? 'Cause we hear a lot of CEOs, oh, it's time to change the brand. And then they give it to their ad agencies. And their ad agencies, buy and large or some exceptions, but buy and large, don't wanna do the research. They wanna allow them with the creative. Look at this beautiful logo we designed. Look at this tagline, as opposed to just doing a little bit of research in the market so that you're not going way off stream. So I just go back is if you do it right, it's actionable and it becomes an investment. If you don't do it, you're probably gonna be in trouble. And if you do it wrong, it will be a line item class, and you'll probably never wanna do it again. - Yeah, so you wanna get it right. Yeah, absolutely get it right. That's why hopefully people listening to this, they'll go and follow you after this hour because I know you do it right and you do share very generously on LinkedIn around your process for doing it right. And that is something that I wanna dig into more. In terms of the different use cases, full voice of the customer research, we covered off a few there, one informing the positioning of a particular product and you bringing that to market or releasing new features, also branding as well, for example, is there anything, any other use case that you normally see come to mind? - Yeah, I can give you a few and then I'll just have an overview statement here. So it's product, concept validation, new products, new markets, go-to-market strategies, merger and acquisition doing due diligence, win loss analysis, but it's more than that because in my mind, anything that touches the customer should have customer input, be it websites, be it social media, be it collateral you're developing for your sales force. So anything that impacts the customer, at least use it as an input because in the end of the day, your job is not to wow an engineer inside your job is to get the customer interested that I should at least take a look at you. - And for those listening, we have quite a range of listeners, some work in relatively small companies, like the SMB market, others are in thousand plus companies. At what stage should they start dedicating resources or just their own time into doing this voice of the customer research? - So I'm gonna say something and I'm trying not to sound like the person has a hammer, everything looks like a nail, okay? It's a saying in the United States. But so basically any level, now it doesn't mean you bring someone inside. For example, I've met a few startups recently and they go, I got this great idea. I said, why is it great? Because it's neat, technology is new. And I said, look, do yourself a favor, go talk to at least a half a dozen of these people. It could be a networking meeting. Is this a value to you? Is it different than other solutions you can get on the market? I had one and I don't wanna call them out, but it was something to do with making restaurant reservations. I said to him, why is this different than open table? 'Cause that's the only platform I really know. And his answer came back as, well, it's cool, it's neat, I'm behind it. That's not enough to convince a customer. So if you can't figure what it means to your customer, why they buy your solution, what segment you're going after, all you're doing is wasting resources. So that's the startup phase. And then the growth phase, maybe everything's good, maybe you wanna attack new markets. And then the mature phase. So what I found is the larger the company, the more likely they will use research, the smaller ones tend to stay away from it, but it's still not one to one. There's large companies and, you know, we're just gonna send some surveys out. It's good luck getting insight. I'll bless what you're doing, but come back to me later when you're serious. So it should be across categories. It should be ongoing and that project related. Now I understand sometimes you have a new product and you want some input on that. But go back to that 10, 30, 90 by visiting customers on a continual basis and learning what they want. It's like a North Star for your company, right? And I know I'm gonna get in trouble here, but I see constant polls on LinkedIn. What's more important, the customer or the employee? So the first set of answers is, obviously you need both. But when push comes to shove, if you have no customers, you have no business. And so you've got a, no, seriously, or they can't, when Henry Ford came out with cards, if you're gonna interview them, they would have said, we want faster horses, right? So we need to understand a good business model that addresses the customers. And then not that the employees are not important, they are important, you don't get it done. But I look at this, okay, really, and I look at polls on this platform, LinkedIn, and it's like 88% say the employees are more important. And I'm looking at myself like, unless all HR is responding to this, that's a crazy number. It's a crazy number. I mean, and so I've given up because I'm trying to concentrate and focus on the major things and you're not gonna win every battle. And this is a battle I think I'm doing to lose. - I think maybe that might be a case also of people wanting to try to say the right thing on LinkedIn as well. - Yeah, but their name is not, yeah, if you go through the likes and all that, but I guess what I'm just trying to say is, instead of just following what everyone says, critically think what is best for your client or what is best for your company. And don't be afraid if you're the one that says X and everyone else is saying Y. And I suppose if you've got the voice of the customer research to back that up as well, then that's data that you can point to. And you spoke a little bit about surveys and perhaps why they're not the best option. And probably a lot of people listening, most of their customer research is coming through surveys. Can you maybe explain a little bit more about why surveys don't necessarily get you the outcomes that you want when it comes to B2B? - Sure, surveys are very quick. They're very cost effective. They get numbers, great. They don't get insights. There's a lot of people when you ask a qualitative question, first of all, they don't fill it out. Second one, they fill it out, they'll say three words. And it's not like having a one-on-one conversation, Georgia made a good pie kick, yes. Hopefully say yes, but why? It's the wise, it's, and you don't get that. So I think that there's a role for surveys after you get the insight. The problem today is those that are doing research, and I heard an estimate, I don't know if it's right, two thirds of them use surveys, online surveys. And what's happening is you are survey slapping your customer and it's getting harder and harder to get a response. They don't see any actions taken 'cause there's no insights. So I'm not saying surveys are bad, but I'm saying is figure what you want to do, what the best methodology is to do it. Could be focus groups, it could be ethnography, it could be phone interviews, it could be mall intercepts. So people are always fighting, what's better? Qual or quant? You need both, but just figure out what you're trying to get. So if you're trying to get insights, qualitative first and a quantitative second to validate them, if you're just trying to get numbers, then go out and do surveys. So what does that mean to a marketer? In my case, I only do B2B. I wouldn't know what to do with a B2C project. If people have B2C, do not contact me. So in B2B, there's an 80/20 role. 20% of your accounts have 80% of your volume. So I have found, start there, start with qualitative. You can have some quantitative questions in your discussion guide. If you wanna go further, then you can survey the market or survey some of your smaller customers. So in B2B, it's quality and quant. In B2C, it's a lot different. Think of people buying toothpaste or bleach. You have millions of people out there. So I would say it's reverse. You do the quant, you do the surveys, do your cuts, do your cross tabs. When you tease out some opportunities, then you turn to the call. But everyone is fighting here, George, based on their own experience. And I'll talk to people that are heavy in B2C. You can't just do that. And it's not statistically significant. Let's do a care about statistical significance where I'm talking to 80% of my market. And they can't make the jump. So all I'm saying is, go back to the hammer. Instead of having a hammer and everything looks like a nail. Really look at things from your customer's perspective. What are they trying to do? What's effectiveness first, efficiency second? What's gonna get the answer? And then when I look at that methodology, what's a cheaper way if I can do that for the methodology? But everyone's going, what if I do a cheaper? And they don't talk about the insights or being effective. And I just, I still bundle that under marketing malpractice. It's just not smart. - A phrase that I love to see you say again and again, marketing malpractice and I agree. That's what it is. It's bearing our heads in the sand. I wanna go a little deeper into the 80/20 analysis you spoke about there. For those that aren't familiar with 80/20, you just introduced it as, I guess it's the Pareto principle, that 20% of what you do drives 20% of the output effectively can be applied to a whole bunch of things. And in this particular circumstance, how does that apply to voice of the customer research? - So what we always start with is we have the client lists their tap customers and descending value. And then we draw a line under the one that's cumulative that makes up 80% of the revenue. And I'm just making this up here. But let's say it had 200 accounts. Let me see if I do the math here. So that would be 40 accounts that are the major accounts. I call them he who has the gold rules. So we identify those accounts. And I can go and deep as this as you want. Then we have the client identify the major stakeholders in each account. And then we call them up. We, maybe like a 25 minute interview, we schedule them. And then we try to get the client to go out and do some as well. Because otherwise you're just getting our information. And again, we're trying to get them to think about how can they drive this process into the DNA of the organization. So we're not saying stop there, although a lot of times we can. And then if you want to sample into your non 80/20 accounts, then maybe you want to sample into random people in the market that could be prospects. But it's a great way to start. And just as 80% of your dollars are controlled by 20% of accounts, 80% of your marketing research dollars we feel should be dedicated to understanding those 80/20 tap accounts. Because if you grow them, it's a significant profitability to your firm. You can make them raving fans. And I heard another stat from, actually happen to be Bain as well, Bain and Company. 5% increase in retention will drive 25% to 95% more profit. So what we're saying is don't stop the customer acquisition, the new customer acquisition, but make sure you understand this base and existing customers are more profitable than new customers 'cause there's a cost to get them. So I'm not trying to convert you to anything. It's just, I'm trying to explain the way I think about these things. And they'll still get what kills me though, George, is I get comments like we treat all our customers the same. And I'll just go back is then damn, you are darn, you are doomed to not do very well. And you cannot treat everyone the same. And it doesn't mean you treat the non-big customers poorly, but it does mean you treat them special, special love, special care. They want much special delivery. They may need a separate 800 number. So they're not lost in the customer service pass around. So you just start there and then hopefully you can drive business and profits and it will reduce the need to get new customers that are more expensive. There's a lot of things intertwined in this and maybe I pulled these threads too tight, but. - No, it's great. It gives you so much clarity, I feel, as an organization as to where is our place within this market? Why is it that our best customers are our best customers? What makes them such a good fit? Which as you mentioned, not only helps for attention, but also positioning your own business moving forward. If you are to acquire new customers, it makes it so much easier where to focus. The crazy thing to me when someone says, "Everyone is suited to our business." The reality is every single business, no matter how big it is, has limited resources, time and budget. And if we know that in B2B, they're buying journeys complex, you probably need 10 to 15 touch points at minimum, it just depends on the product, but it's expensive or time consuming to get in front of these people. So if we're saying everyone is our customer, how can we expect to get in front of them enough times to build a relationship with them, to show them that we're the obvious choice for them? It makes no sense. - You put it a lot nicer than I do with, I talked to so many people. I said, so your product's like a loaf of bread, right? Everyone can use it. And they'll just like, yeah, everyone. So by not having a focus, you don't have a focus. And you just saw it, you get into these, let's say heated discussions with people and a company could do what they want and consult. And then the other thing is, I was gonna go back is, we've gotta get out of this with service providers that if I have service, a will solve your stuff. We've gotta get into the minds of our clients, walk in their shoes. Okay, I know marketing research. I know the problem the client has. If I were the general manager, CEO of this client, what type of research should I be doing? So if I'm a survey house, it's not do some surveys. If it's focus groups, it shouldn't be focus groups. So it's just, it's a crazy industry. There's so many moving parts that don't link together. And it's like, gear is just spinning on a, like a electricity dial that I've got in the back, where all the little dials are spinning in there. And you have to start somewhere. So I go back and do some interviews, prove that they have insight, that maybe they challenge you. So a lot of, I'm jumping here, but a lot of times I have, they had clients where you do the research and they'll say, I know all that, right? I know all that. So for the last three or four years, what I've had the management of the clients is taking a modified survey of the discussion guy to use with their customers. What does that do? It shows alignment, right? So if they're harder on themselves, it's 'cause they see the sausage in the factory. They see everything being made and the customer may not. But I've had stuff where a client, we have some, what is your net promoter score for your top 10 customers combined? And they said, oh, it's gotta be a 46%. And it turned out to be minus 26%, minus. And I said, you guys are not aligned at all. You're not on the same page. You're not in the same book. You're not in the same library. And so what you do is you present the customers first, then you present management. You don't call any manager out 'cause that's not a good thing. But, and it's like, what's the deal here? You know, your customer, and I'm making this up. Your customer said your quality, oh, yeah, I had one like that. We didn't ask you to talk about quality. But when we were going open ended questions, one quarter of the customers said your quality stinks. And then it comes out, well, yeah, we had stuff shipped to China and it's okay. So there's a problem. But so as you said, George, a little earlier, it's what are the main issues that you need to focus on to drive your business? You can't solve everything. You don't have unlimited resources. You don't have unlimited people. I don't think anyone has unlimited capital. So where do you fight your battles? And that's all we're trying to do is get them to focus. And that's exactly why I love your process. And I love, yeah, your process around speaking to the customer and going to that a little bit further, you've shared a fair amount, I think, of your framework around voice of the customer research. Is there anything else that you'd like to share with our audience on how you go about it or how you pick a particular methodology? Yeah, I'm trying not to make this an hour discussion alone. So the first thing is, what does a customer, what are their objectives? How are they going to use this information? And then you think, OK, going back to, if I'm the CEO, what's the best way to do it? So if you're designing a new generation product, maybe the first step is to do some ethnography, where you hang out with some customers or the client, why are you doing this stuff? What can they do to make it easier for you? Then maybe it's a focus group where you're handling prototypes and maybe it's a team of beta testers at different customers. So you try to figure out what's the best way. It so happens in B2B when you're doing things like customer satisfaction, customer loyalty. The best way and the cheapest way is doing in-depth telephone conversations. They last maybe 25 minutes, maybe 30 minutes, maybe more. And then the next thing you'll say was, why would anyone talk to you that long? This isn't consumer. If you do better servicing your customers, they do better. And they want you to do better. There's things that they don't like. And so you pick the methodology, and then you figure out, OK, what are titles do we need to talk to you to get the best input on this? If it's a new product and process control, it's process control engineers. If it's-- or whatever it is. How many do we think we have to talk to? So I looked at this in three steps. So if you're getting information on a customer's journey, if you're getting information on maybe you're doing ethnography, six to eight to 10. That's probably all you need. If you're doing focus groups, each focus group should have eight people in it. And then you can have multiple focus groups. If you're doing customer satisfaction and loyalty, the answer is, as many large accounts as you have with the key stakeholders. So going back to the example, if you had 40 key accounts, and on average, there were two key players in each key account, that's 80 interviews. If you're randomly going in the market, and it's not an industry specific, and I know I'll get some pushback here, but I think it's 20 interviews. 20 interviews, you get to see the dominant theme and a couple minor themes. When you do six, seven, or eight, you don't know. You have three things that occur. How important are they? So what I've seen is when we've done a lot more than 20-- let's say we do 50, or whatever, or even 100 we've done-- very seldom has it initial cut than different from the 20 interviews to the final. I strongly believe in that. I know there's others on the LinkedIn network that don't believe in that. If you're going to spend the research dollars, get it actionable, and you have some confidence that you get the right answer. And I suppose that comes because you start with that 80/20 analysis, too. So you're not speaking to these wildly different companies, which is perhaps why you start to be able to identify common themes after 20 versus 50 and beyond. Is that fair to say? That's fair, but I don't think that is total. If you want to look at the Coca-Cola industry, the bottling industry, you don't need to talk to 200 bottles to look at what the issues are. They look about quality of the bottles, marketing is concerned with the rate of the filling line, the process engineer, production engineer is filled with. The plate manager gets his bonuses and that whatever's being pushed out. But that stuff tends to surface. And especially, George, when you're not running them through all closed-ended questions, it's, OK, what are your major concerns? What are your pain points? How do you evaluate potential suppliers? What would it take to displace your current supplier? So a lot of this can drive insights. And again, you paint a picture. You paint a picture by title. You paint a picture by company with the different stakeholders what they're looking for. And I'm not saying you have to stop at 20. And again, if you're nervous about this, I would do 10, see what you've got, see if there's value, and then look at another-- look at doing another 10. So I'm trying to work with the client's budgets. But I hear other people. I just need to do a couple interviews, or I send some surveys at it. Or the best that is, I'll just have my reps ask a few questions. I can literally have a stroke when I hear that, because they're in front of them, OK? And that'd be like me asking my dentist, how's my heart? Because you're in front of me. It's ridiculous stuff. It's just-- we don't think. And again, we think about what's easy, what's cost-effective, not the drivers of the business, and how we can improve in the drivers of the business. I'd love to hear another practical example of a company that you've worked with. And you've applied this voice to the customer research to in any actions that have taken off the back of it. I think you've done so well to share a lot of good stories and examples with us. But if there's one that you'd be able to take us through, and to really illustrate. OK. And now at that point, that would be amazing. I'll take you through one. I'm not sure I'm allowed to use their name. But they're a company that's based in the UK and Australia. And they're selling a construction product for job sites construction. And in the UK and Australia, a lot of this is sold direct. They don't go through distribution. And they came to me and they said, and I don't know how they found me. But they said, we're interested in selling in the United States. So the first thing we did is we sized the market to make sure whatever share they had is in line with what they're anticipating, or whichever they could get to. We looked at the major players. There are two people that had together about 50% of the market. Now, normally, you say, don't poke the bear. They're going to crush you. But when we did some research into these two companies, they were acquired by companies. It's a metal bending, which is not very profitable. And it was the other companies that acquired them had other higher tech, higher emerging stuff. So it went down in priority for the companies. So what we did is we said, OK, we think there's opportunity here. The second step is we talked to distributors in the United States, people like Granger, people like MSC, I think of them right now. And we said, OK, do you sell to contractors? And they said, yes, how many do you sell a month on average? OK, what brands do you sell and why? And what came back was contractors would go in and ask for a certain brand. But they weren't loyal to that brand. It was like asking for Kleenex and you'll accept puffs. And so we understood what we did is we prioritized and we talked about 20 different distributor chains. And we gave them a red light, yellow light, green light. And we said, OK, you need to be in these distributors. And then we went further and we said, OK, we know you aren't going to have direct salespeople for a while. You need to get the right type of manufacturer up. So we called up a bunch of reps. Who do you call on? Do you call on any of these distributors? What's the commission rate and all that? So we got that and he worked on that. And then the third part is we talked to some contractors and we said, OK, what do you like about-- how strong is your brand preference? What are you looking for in this type of product? And what we found is, again, it was like Kleenex. Everyone heard of it, so that's what they would ask. But when our client came out, it was like night and day what they designed, an innovation. It was pretty. It wasn't a dull gray. It had hydraulic hinges. It didn't just slam on you. And it started to take share. The company got delayed a little bit because the US had some different requirements in terms of locks and this like that. But when it came out, I talked to the CEO maybe about six months after the product came out. He said, we're beating our sales projections. We're beating it. And that turned me on. You work 110% no matter what. But it was like, my god, someone's actually taking this data, making the design changes, going after the reps, going after the distributors. And it's not-- it's just not a light switch. We work on this three days later, it's all together. So it's continually being worked. But it was like, they just said to me, we know our stuff. We help them through this process. They're successful. And that was-- I don't know. I liked it. Yeah, that's a very holistic approach. And even giving them like the traffic light system for the distributors so they know which ones to attack first because again, limited time, limited resources. So it's not enough when you're having a go-to-market strategy. And then we'll look at that term a little differently to say you need to go into distribution. So what we said from there is, let's pick the larger distributors. Because if you pick onesie-toozy shops, you'll be there for the rest of my life, at least doing it. And now let's figure out how that product fits with them, the contractors come in. So there were some large chains that might have sold one of these things a month. All right, that's a red light. There were some that sold maybe five a month. That's a yellow light. But there were some others that sold like 20 a month. For example, staffed, especially tool and fashion distributors, they sold a bunch. So you get these guys in line. You get the reps that call on them. So it's a very holistic process. It's not just do this. Or I'll just go back to just do some digital marketing here. What I love about B&B, B2C, you have these sexy ads and all that. And B2B, it's blocking and tackling. I don't know if you're familiar with our football terminology here. But so it's one of the things you really have to do and execute them very well. Don't be half-assed about it. Put resources behind it and do it. And I'll tell you another quick story. So it won't be as long. So there's another company that made laboratory software for hospitals. Don't ask me what it is. It's so long ago. So what they had to do was be compatible with other software. And they kept telling me, we're going to sell. And they were, I think, like $100,000. We're going to sell like a couple hundred of these first year. So we looked at it and it's, OK, a third of these hospitals were like part of a group and another third were co-ops. And we looked at them all and said, parts of the market you couldn't get. And then we said, OK, you think you're going to get 30% sure? We say, no way. We say there's a ramp up. We say you should be lucky with 3% sure. And then before you send to the segment that you fit. So we said-- and this happened to be luck. We said, you're going to sell seven of these. A year later, I'm driving. This guy calls me in his car. He says, you won't believe it. And I said, what? He said, we had our first year sales. I said, OK, how many? I'm thinking, OK, I'm going to be way wrong. I was bragging on it. He said, seven. So that's more luck than complete accuracy. But it just shows you the scale. They either are thinking they're going to sell 200. And there's no way they had to test. They had to fit with stuff. If it were 10, it would still be. The same thing. So we like trying to help clients go forward. We like halting stuff that shouldn't be done. And that's our job, I think. Yeah, allowing people to get that clarity, to prioritize what they're doing with those-- that limited time and that limited resources. And doing what you're doing, I've been thinking more about myself around cataloging the market. Like, how do we just look at the existing market that we want to sell to and understand what their position is? And that's why I love what you did with the distributors. And your previous example is communicating with them, finding out of that particular product, how much did they even sell? And who were they selling it to to use for information? The other part of it, you keep triggering stuff. I think I'm like an old me and I forget stuff. But what does it take to displace the current vendor? Because they didn't want two or three of these. There are huge products sitting on the shelf. So then you get back to-- you have to have higher margin, better looking product. In some of these places, like United Supply, you'd have to buy back some of the stock. And then you can dump them in China or India or whatever. But so it's strategic, it's tactical, it's focused, and it's a holistic process, step by step. And you can't just do one part of that and then not worry about anything else. For those who are listening who are thinking, how on earth is Alan able to get that information out of those distributors, for example? Is it as simple as calling them and asking them? How are you gathering that information? Oh, there's a couple of things. Bottom line, yes, not everyone will talk to you. But you call-- and I'll just give you an example. So this product could fit United Supply, who in the United States is a big rental place for contractors. So there's two parts of this. So one is you want to know how many are sold. So you just call in blind. Do you sell these things? Some don't. Really? OK, how many do you sell a month? One or two. Then you can ask some questions or go to a higher level. OK, what margin do you make on these things? What would a new supplier have to do? So they might answer it, or they might say corporate does that. So instead of calling the branch in Topeka for United Supply, you're calling United Supply corporate and just trying to get a-- so we're not doing work for a competitor of them. We describe the product that we have and who we're competing against, and they're free to talk to us and not talk to us. So that more likely scenario is the client says, we want to understand how our large customers think, how we can make them raving fans, maybe someone left. And so we work with the client, again, to identify the names, identify stakeholders, but send out an email, please cooperate. We've hired a firm. We want to understand how to serve you better. And guess what our response rate does? Just guess. 20%. 81%, 80%. Wow. Because it-- what's in it for them? What's in it for them as they have a supplier that's less of a pay than he has to deal with, or has better delivery, or is more responsive. So they see the benefits right away. You can't do that. You can't do these 25-minute interviews with B2C. No one's going to sit there, fill a survey out. I know about you, but after six minutes, I'm bringing that bonus. And then you fill these surveys out. There is nowhere to put any qualitative stuff. It's all right. Do this, do that. It's like strange, just strange. Yeah, absolutely. How 80% is fantastic. Any look, right. 81, 81. But when you frame it the way that you framed it, I understand. And so when it happens, our process is we try to schedule. I caught the baseball rule. If three attempts, we can't get a hold of them. We go back to the client and say, it's getting too hard to get a hold on this person. Either have you or your rep, contact them and ask, or substitute with another person. And then the merry-go-round comes. And we have them divide into A priority and B priority. So it's a pretty sophisticated system, as opposed to your other example, just calling up and asking stuff. And then we type up transcripts. We send them back to the client. Can I just have one more example for you? Yeah, it plays, but that would absolutely-- I did work many years ago for a guy. And they had a bunch of client customers and we were calling. And their number one customer with 35% of their sales. I talked to them. And he goes, I'm glad you asked. I'm ready to dump their blank. I said, OK, what's wrong? He just tells me all the stuff they did not response of. They didn't do. And I said, would you be willing for me to write this up and send it and have some action taken? So I went to my context, said, I don't want to do it. This is above my pay grade. I said, do you realize you're going to lose 35% of your sales? Don't want to do it. So I did something which I've never done. I jumped them. I went to the CEO, called the CEO. I said, we're doing some work. I'm sure you're aware. And I said, you've got someone that's ready to leave. And they're a huge account. I'm sending you the transcript. You and a marketing person need to go out and talk to them and see if you can salvage it. And so I call it like the red flag. I was like burning red flag. And then my contact goes, how dare you jump me? And it's because I am in the position of trying to be the advocate for the client and the client's customer, all right? And something needed to be done. You didn't want to do it. And I can live with myself on this. That's another fantastic example. And again, aligning yourself as the customer's advocate, but also taking that to the CEO and really bringing back that, I suppose, that commercial acumen to why we're doing this in the first place. And so it's not enough just to go through the exercise. But to make sure that the right people are hearing the right information and the right action is taken off the back of it. We will present to senior management. We'll present, here's what we heard. Here's a top three to five things. Here's a top three to five things that are under your control. If the weather's been delivery, you can't control the weather. And then here's what you need to do to actionalize it. And say, OK, you need four initiatives here. Well, the thing. And then what we do is we go back to each-- or they or us, or some combination, go back to each customer we interviewed. We said, OK, we heard this. How are we right? Is there anything missing? We're thinking about doing this. Here's our plan. We're going to meet once a quarter and see how we're doing on our plan and executing our plan. And that buys so much love and buy-in from the customers. It's like the stuff I gave you, you're doing something with it. It's like before they had some other firms. And it's like, oh, we got our research. We wasn't sure what to do. But this is-- and they said, OK, we welcome talking to you guys as us too. And it's closed loop. And then you rinse and repeat. You do the initiatives, maybe 12 to 18 months later. You do the same thing again. Are they working? If they're working great, if they're networking, you audit, and then you fine-tune it. And so that's why I get-- I don't want to say upset-- a little frustrated with people thinking that marketing is a light switch. Or marketing is-- I see the cold water faucet. You turn it on, you turn it off. That's that real marketing. Marketing is having-- being customer-obsessed, touching base with them periodically. And it could be multiple channels. It could be the rep. It could be marketing. It could be the CEO. It could be a lot of things. It's not, oh boy, here's this time for annual survey again. Yeah, yeah, yeah. Yeah, I love-- I suppose how simply you frame it in the end. And I agree with you. That's, at the end of the day, really what marketing is. It's not this light switch that we've been trying to think it is the last 15 years. It's very frustrating to see that's come in. I'm sure that has something to do with the average tenure of the CMO being two years or less. It's probably why we see so much being tactically driven out there, rather than strategically driven. And look, Alan, you've been so generous with your time. We've been going for over an hour now, and we really appreciate-- Yes, we have, and I apologize for that. No, not at all. No, this has been absolutely fantastic. Like, you've shared so many great stories and examples with us, and so much of your methodology. I just think every marketer should follow you and listen to you. And we're big advocates of what you do in your process. Before we wrap up the conversation, is there anything else that you'd like to add or direct our audience's attention to? I would just say if you're going back to this internal external, if you're internally driven, you're not doing it right. And you need to have-- you need to be obsessed with your customers. I call it customer obsession. They need to be your North Star. Everything that you do or touches and impacts the customer, you need to think it through and you need to test with them. And not doing it, are you just inviting a bigger chance for failure or churn or whatever you want to call? So I'm passionate about this. I don't know if you can tell. It's been my mission. I can't change the whole market. And I feel happy when I can change a couple of people's minds every once in a while. That's all I can ask for. I'm trying to get a whole bunch of a cadre of professors and stuff. We need to put electric shock on marketers on the current way they're doing business, because it's not working. And you leave a firm and then you bring your tragic tool set with you to the next firm. And it's the director of marketing and sales. I won't get as bad B2B normally comes up to the sales side. They have them in trained in marketing. And so they pull these sales arrow out of the quiver and shoot, and they need to be trained. And so I'm not trying to blame anyone, and I might not have all the right answers, but I'm begging you. Just think through the process. What's the best way to do it? Look at your customers and just try to delight them. Don't even make it like they can do it my way. No, we're going to do it your way, like the old Burger King commercial. It's a very big job trying to re-educate a whole generation of marketers, perhaps two generations of marketers. I thank you for your efforts. I think you're doing a terrific job at it. But as you said, we need more of us out there. Just trying to, I think, bring things back to the fundamentals. People to use their brains a little bit more to start with the customer. Alan, thank you so much for your time. Everyone, please follow Alan's journey on LinkedIn. Look up, consight, marketing, Alan, where else would you like people to find you? You know, if they look at LinkedIn, I've got to say www.consight, C-O-N, S-A-G-H-T. Marketinggroup.com. Fantastic. Alan, thank you so much for your time. Thank you, George. (upbeat music) - George, I feel pretty vindicated. I don't know about you. If someone as knowledgeable and experienced as Alan Hale is coming up against all the same pain points that we've been hopping on about on this show and coming up with very aligned solutions, we can't be that far off base. - That's right, Kev. What a fantastic episode. So many real world examples from Alan of businesses in B2B marketing who are doing the right and wrong things and really looking into how they impacted business at the end of the day. And remember, the reason we're doing all of this, listeners, is because you need to be as customer obsessed as Alan, that's why we had to have him on the podcast. He's so clearly passionate about this topic. And he has proven over decades that this stuff really works. All right, listeners, we love some of these key points from Alan, the first one. Of course, voice of the customer, getting customer obsessed in your business is gonna make you more likely to succeed and make better business decisions. - And the number one killer of companies is thinking they know their customers and therefore don't need to do any outside research. So make sure to take an outside in approach, particularly for those product led organizations, all those who believe that they've known their customers well, these kind of things are always that number one killer for companies because they're not out there and keep in touch with their customers. And that's where customer research comes in. Now, don't confuse customer research with just doing surveys. As Alan said, surveys don't give insights. The cheap, they're fast, but at the end of the day, they don't get the quality of response needed for those qualitative insights. They don't give you the whys. And B2B, the place for surveys is after getting the insights, after getting the whys to validate them. The reverse is true for BDC and that's potentially where a lot of issues come from. - And I love what Alan said about focusing on your existing customer base. It is so important. Something like a 5% increase in retention results in 25 to 95% more profit. And if you range there, but the bottom line is like that's profit, not revenue. So focus on your existing customer base, why you're such a fantastic fit for those best customers and double down on what you're doing there. - It's also bad to have reps ask a few questions in place of proper market research. As Alan said, it's like asking a dentist, how's my heart doing? Because he happens to be there already. We shouldn't think about what's easy and what's cost effective. We should be thinking about what are the drivers of the business for that business growth and how to improve them. In B2B, marketing is also strategic tactical focus and a holistic process. Step by step, you go about it and you don't just do one part of that process and not worry about anything else. It all comes together, it has to be strategic, it has to be tactical, it has to be that holistic process to make it really work. - And sometimes a great place to start is just simply calling up and asking the questions. Of course, you wanna have a certain structure to it and Alan has tons of experience in this to make sure you're getting the right information, but you gotta get started. And I loved his tip around if you send out an email to preface doing that phone call, that can really help you connect with that person. And Alan's response rates are as high as 81%, so he's doing something right. And then Kev, I guess that leads us to the next point which is really, marketing is not a light switch. It's about being customer obsessed and touching base with them periodically. I always like to say that if Kevin, we just bought all the software tools that promised 200% return on investment, then what we could have done is we could have just for every business, gone and bought all those tools, switched them on, and then you and I could have retired, bought an island. You'd be looking even more tan than you already are, Kevin. And that's just not the case. It starts with that deep understanding of your customers forming your strategy based on those in slides and then tactically executing to meet that strategy. All right, listeners, those are the key takeaways from that conversation with Alan. Make sure to go and find him on LinkedIn and connect with him there. As always, we're absolutely stoked that more and more of you are joining us every Monday to listen to the podcast or check it out on YouTube. If we can ask one thing, it would be to please pass the show on to someone who might enjoy it and get value from it, or leave us a short review on whatever platform it is you find us on. It's an amazing help to us, our future audience, and we'd really, really appreciate it. Thank you, Alan. Thank you, George. Take care, listeners, and see you next week. Thank you, everyone. Have a great week. A quick note before you go, listeners, you can find more great content and get in touch with us at the B2BPlayBook.com. Be sure to subscribe to this podcast and our newsletter while you're there to get the latest news tips and resources from our playbook. We'll be back the same day and same time with another episode next week. Thanks for tuning in to the B2B PlayBook. Remember, successful B2B marketing starts with a buyer. [MUSIC PLAYING] (upbeat music)
