Highly Competitive - software industry insights: June 2010

Here’s a piece of advice that very few B2B software vendors of any sort ever follow:

Vendors: If you have been targeting Mid-Market customers – then stay where you are!

Ignore the siren song of the high-end Enterprise.

This advice is especially meaningful for B2B vendors for Web Content Management (WCM) and Web Engagement Management (WEM).

From my experience, many of the WCM / WEM / CMS vendors seem to do very little market intelligence research and analysis to understand what exactly they are selling and to which customers/markets. Most WCM/WEM/CMS vendors seem to be milling around with no clear indication of how each vendor aligns to clearly defined solution, customer and market segments within a go-to-market matrix. The main focus of most of these vendors is on feature sets, and not on delivering authentic solutions for specific industry scenarios and business problems. When any sort of Mid-Market B2B software vendor persists with very horizontal solutions, it is in danger of “disappearing”.

The mid to upper tiers of the Mid-Market provide a fertile market for B2B vendors who are themselves SMB or Mid-Market companies. For the mid to upper tiers of the Mid-Market, annual revenue runs from $250M to just under $1B. Vendors will do better if they segregate this range into two segments ($250M-$499M and $500M-$999M respectively). Within those two segments, vendors should then select and learn a lot about specific customers and various solution scenarios that matter to those customers.

I’m specifically calling out Mid-Market customers for WEM (rather than “classic SMB”), due to the higher cost of implementing digital marketing solutions based on WEM platforms, which are likely out of reach for classic SMB companies. Once a vendor is committed to targeting Mid-Market companies, the next phase is to very specifically target segments of customers for mid-market offerings.

Drifting into the High-End Enterprise Usually Ends Badly for Smaller Vendors

I’ve seen too many SMB / Mid-Market software vendors lured by potential big money and big deals in the high-end enterprise; after taking the plunge, very few of these vendors do well or even survive. It is near-to-impossible for smaller software vendors to compete against large vendors when providing high-end solutions. When trying to compete with the “big boys”, sales engagements frequently deteriorate into pricing wars that can destroy the well-being and income of the smaller vendor. After crossing over, the smaller vendor spends all the time on “me too” development for what the high-end vendors are already doing. The smaller vendor becomes snarled up in feature bloat that leads to the bastardization of its original offering. And worse, the smaller vendor ends up alienating its original target markets of mid-market companies and loses their business.

The high-end enterprise is a very tough place for smaller software vendors: there is a much smaller field of potential customers, fierce competition for those customers, plus larger software vendors already have established extensive relationships in these enterprises. Large enterprise customers are also harder to please, bring on longer sales cycles that include more chances to fail. Even when a smaller vendor wins an initial deal with a large enterprise company, it is usually displaced by a larger vendor very quickly.

Conversely, when targeting the Mid-Market, very few high-end vendors go very deep into this overall segment (and rarely into SMB). For the most part, large enterprise software vendors still don’t really know how to win Mid-Market business or provide the right-fit solutions. And it’s not just about price but about understanding how Mid-Market buys software solutions . On the other hand, a Mid-Market vendor already has decent affinity for some of the concerns of its potential Mid-Market customers, simply by reflecting on what matters to the vendor’s own success.

Vendor-performed Segmentation Is Essential to Build WEM/WCM Solutions for Mid-Market

Mid-Market (and SMB) customers are overwhelmed by the large number of CMS offerings of all kinds and are not well prepared to figure out which ones are appropriate for WEM or even just WCM. WEM vendors targeting the Mid-Market have to do a much better job of marketing and engaging specific segments.

Vendors must take action to properly position themselves in segmentation to differentiate their solutions form the mass of WCM/WEM offerings. They must put focused thought and time into identifying and understanding specific customer segments in the Mid-Market. Then vendors must undertake further understanding of what the vendor solutions need to provide the best support for target customers. Vendors need to be clear on what the solutions are not, to avoid “market sprawl”. It will make a huge difference if vendors put good time into a conscious and rigorous go-to-market strategy that is continually fine-tuned.

Take time to properly segment target customers and markets for solutions:

· Know the target customer size – usually based on revenue ranges

· Identify who should use your solution and why – what problem(s) does it address (be very specific) – stay far away from the massive horizontal pack of “CMS” offerings

· Research and select one or two industries you’d like to work with; then select a segment in the industry that is a good bet for WCM/WEM solutions

· Analyze and build out specific industry scenario solutions that really work – again focus on real target customers and real customer problems/needs

· Keep in touch with the customers who are using the scenario solutions: fine-tune, improve, evolve into other focused solutions

· Assess the success of the above to make decisions about new go-to-market strategies that will add growth to the company

· Truly support customers throughout the lifecycle of the customer experience

No Illusions – Price is #1 Criterion for Selling to Mid-Market

I’m just calling this out plain and simple: for most Mid-Market customers, price is the first requirement to be met by prospective vendors. Most Mid-Market companies have very clear parameters for what they are willing to spend on software. But the Mid-Market also wants value for price. When I say price, I mean the total cost of the end-to-end solution that will be up and running and working properly – so price includes money, time and people.

Many Mid-Market companies have small IT groups, so the following capabilities are essential: ease of implementation, low maintenance, ease of use for non-techies, good to great performance, delivery on vendor promises. When selling to Mid-Market companies, publish honest prices on your corporate website. Revealing pricing is a part of marketing to and engaging the customer-as-buyer when dealing with the mid-market. Remember: Mid-market companies have no time or patience for long sales cycles and complicated pricing schemes.

Strategy for Providing and Selling WEM to Mid-Market Companies: keep it simple

Vendors must take the time to research, analyze and understand what comprises a WEM solution for target mid-market companies. They have to take a look at the overall WEM capabilities of their solutions, and then reconcile which capabilities matter to their Mid-Market target segments. CMSWire has had a recent series on WEM solutions that is a good starting point to help vendors with mapping a solution to the needs and requirements of desired customers.

Where WEM is heading for the Mid-Market:

· Product/solution capabilities that meet Mid-Market requirements

· Capabilities that support marketing strategies of most Mid-Market companies

· Inclusion of social media capabilities and/or integrations with social media and Social CRM apps

· Monitoring trends related to desires/needs of target markets and specific industry scenarios (identifying what Mid-Market segments need, not what big enterprise companies need)

· But continue to monitor Enterprise trends to watch for trickle-down effects – this is where vendor smarts and market intelligence must come into play

Innovate With Real Solutions for Real Markets

Smaller vendors for Mid-Market WEM solutions are frequently more agile (carrying less legacy and expensive baggage) when it comes to pursuing innovation that will benefit target customers. These vendors are better positioned to move quickly to embrace future trends that define where solution markets are heading.

Vendor success comes from continuous innovation that makes sense for its Mid-Market customers:

· Engage in continuous market intelligence processes to monitor target markets / customers, and what they want for future success – many sources for this information

· Innovate specifically for Mid-Market target customers – perform excellent research/analysis to understand which are the best markets/customers/solution scenarios

· Conduct continuous conversations with current customers, and with companies wanted as new customers – embrace Social CRM practices for better conversations, listening

· Keep an eye on what the marketing teams of Mid-Market companies’ will need from WEM solutions

· Monitor enterprise-level trends for WEM to determine if the trends are meaningful for Mid-Market companies; also follow WEM trends for consumer marketing for new ideas – but choose wisely for real market strengths

· Don’t follow in the footsteps of big WEM solutions just to land where they are now

o Jump ahead to new trends that make sense for target Mid-Market segments

o Pick innovation that is right for target customers and for the vendor: real differentiation will result

Jeremiah Owyang on Future of the Corporate Website

Recently at the Gilbane Conference 2010 in San Francisco, and on his blog, Jeremiah Owyang has set out some compelling predictions for the evolution of company websites and the potential new world of distributed web presence. He sees social sites driving far more customer connections and brand awareness than the traditional corporate website of past years. This is the sort of innovative thinking that vendors for Mid-Market WEM/WCM solutions should be monitoring.

A couple of Jeremiah’s slides from Gilbane Conference 2010 San Francisco:

http://www.web-strategist.com/blog/2010/05/19/slides-roadmap-for-integration-of-social-into-your-corporate-website/

SMB / Mid-Market B2B Software vendors - Findability + web presence + social: attracting the “customer as buyer”

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About the author: Julie Hunt is an accomplished market intelligence analyst, providing strategic market and competitive insights for the software industry. Her 20+ years as a software professional range from the very technical side to customer-centric work in solutions consulting, sales and marketing. Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Market & Competitive Intelligence Services

Disclosure: From time to time, I contribute articles to CMSWire.

Future of tools for managing web content and web presence anywhere

Recently a colleague was exploring options for improving the web marketing capabilities of the company that he works for. He started his efforts by looking at “traditional” Web Content Management (WCM) software, with an eye to Web Experience (Engagement) Management platforms. But since his company is itself a mid-market-sized company, he was very uncomfortable with the options – and not just because of cost and time to implement. As conversations with his company management evolved, my colleague realized that he was not satisfied with a WCM / WEM solution because it didn’t seem to be the right platform for their web marketing strategy and business goals.

These days, companies of all sizes have tired of the expense and complexity of many WCM / WEM solutions, and would dearly love agile alternatives. And, yes, there are lesser expensive options. But what may be the most important factor for a lot of companies, is a strong emphasis on the customer-focused web presence for the company. And this may mean that company web presence will show up on other websites, instead of on the corporate website -- which leads to the notion of whether or not the “corporate website” is becoming obsolete for many types of companies.

Web marketing and customer relationship strategies are changing (and improving) – companies need new solutions and practices to manage the new world. More companies have come to understand that first they must build the web marketing / presence strategy that will accomplish their goals. Then they have to figure out how to achieve the goals of the marketing strategy, which will involve preferred practices and processes, as well as technology. With web presence evolution, marketing strategies should include orchestration of web presence via other sites, and how to integrate with conversations and content from those external sites.

B2C or B2B – Which Organization Needs A Corporate Website?

Whether or not a company should have a corporate website can depend on many factors. For both B2C and B2B companies, content still matters and has to be located somewhere. The B2B company has the greater need for a corporate website, but must now evolve the corporate website to a social / customer hub. B2C sales and marketing goals might be less about content per se and much more about customer conversations and brand awareness that take place anywhere on the web. Jeremiah Owyang points out that the corporate website is less and less the most likely place to connect with customers.

B2C – Time to Get Rid of the Monolithic Corporate Website?

Is the corporate website obsolete? Most corporate websites do not work well for customers. The sites are designed from the corporate POV, with too much useless content that is hard to find anyway. Frequently corporate websites become money pits, requiring too many resources over time compared to the benefits received.

Particularly for B2C businesses, new thinking is that the corporate website might be completely unnecessary for customer interactions and brand promotion. Going where the customers are, i.e. social sites, seems to be an effective way to better connect. Monitoring web presence and participating in conversations on other sites help companies reach out to current and new customers in ways that matter to these customers and can bring effective results to companies.

Current thinking is that social sites are taking sales endeavors to a new place since customers can now participate in spreading the word to potential customers through forums, communities, ratings, reviews. On the flip side, corporations have the responsibility of finding and responding to concerns, complaints, feedback, and requests posted on social sites, hopefully to resolve problems, to engage and attract customers through answers, and to learn from customer POVs.

B2B Companies Still Benefit from Corporate Websites, With Social Improvements

One approach to introducing more web presence into corporate websites is to add improved social capabilities that interact well with customers and potential buyers. This approach appeals to companies that want a measure of control over customer “conversations” and also makes sense if the company is using social capabilities as part of a customer relationship and support strategy. Content still matters for B2B websites – B2B are customers still looking for a lot of different kinds of content that they want to easily find on the corporate website. However, many potential B2B customers are also influenced by interactions and content on external social sites – the savvy B2B company had better understand the importance of such sites. Integration with and monitoring of social sites are key.

Hubspot - inbound marketing and social media advisors::

Your website may very well be the most powerful tool in your marketing kit. Not only is it the place prospects and clients go to learn more about you and your services, but it has a huge impact on their ultimate purchase decision.

The Hubspot post goes on to discuss a survey conducted by RainToday.com that looked at buyers of professional services and the amount of influence that corporate websites exerted on the purchase decision:

According to the survey, 74% of buyers report the service provider's website holds at least "some influence" over their ultimate decision to buy services from the provider. This is 23 percentage points higher than in 2005 and represents a significant increase in the importance of websites.

B2B corporate websites need web management solutions not only for creating and maintaining more social and interactive experiences for customers visiting the site, but to monitor and participate in the conversations that take place on other sites. Other sorts of off-site social-related analytics need to take place, such as sentiment analysis. The results of monitoring and analytics must be used to fine-tune product and marketing strategies, and to help corporations better serve customers.

Jeremiah Owyang on the Future of Corporate Web Presence

Owyang throws out some compelling assertions: In the not-so-distant future, he states that there will be no “old school” corporate sites. There will only be sites assembled on the fly based on social data, a sort of dynamic personalization mashup of content and social engagement.

Today, I’m pleased to see that the thinking –and technology, has emerged, where we’re finding a variety of companies that are integrating social technologies right into the corporate website, bringing the trusted discussions closer to the corporate site.

Although the highest state of nirvana (seamless integration) doesn’t yet exist, we should expect there to be very little difference between social technologies and corporate websites as content will assemble on the fly. I predict URLs won’t matter, as content will be dynamically assembled around the buyer and their context in a variety of devices. Sure, that’s far out thinking now, but that’s why we have several other stage gates that companies must first go through.

Owyang continues on the new social web presence:

1. Although it’s a new and experimental medium, brands should plan a roadmap.

2. The future of web experiences will be based around people – not products.

3. Take inventory of all corporate web assets and identify where they are in the framework.

4. Next, identify the desired state, and then build a plan against it. Start small and slow, and be sure to have a strategy.

5. Don’t arbitrarily jump into the social marketing space without measurable KPIs. Be deliberate in your actions.

Owyang’s thinking is important especially for vendors of WCM / WEM software solutions since he may be pointing the way to future web presence solutions (a future that is not that distant).

Should WCM / WEM Software be The Hub -- or one of the components?

Some vendors of “traditional” web content management solutions have been transitioning their offerings to WEM platforms where managing and enhancing the web experience or engagement of the customer is the central purpose. The current WEM platforms focus mainly on customer and social capabilities existing in the corporate website, and are in very early stages of supporting integrations with external social sites.

Those supporting the notion that WCM/WEM Platforms should manage web presence and continuation of corporate websites include:

Brice Dunwoodie of CMSWire is What is Web Engagement Management:

It's how you create and manage content, including primary web content, multi-device content, blogs, forums and wikis. Your WCM platform is also the hub of your social media integrations and increasingly the dashboard by which you view your brand's conversational world.

Further expansion on the WEM platform from Barb Mosher, CMSWire: The 5 Pillars of Web Engagement Management

1. Content Optimization: analytics, content and experience personalization, multi-variate testing, optimization and SEO.

2. Multi-channel Management: delivering same message/experience to customers across devices and channels both online and offline – new mobile web

3. Conversational Engagement: corporate website-based communities, UGC, commenting, trackbacks, micro-blogging, social media integration, analytics, social media monitoring and sentiment analysis.

4. Demand Generation: customer engagement/experience through targeted marketing - increasing the number and quality of relationships, through need recognition, relevancy enhancements and engagement triggers.

5. Sales Automation: two-way CRM integration, social CRM; e-mail or other campaign integration with the content platform.

As described by CMSWire, WEM platforms would provide capabilities and monitoring of brand and customer conversations on corporate websites, as well as bi-directional communication extensions to external social sites.

On the other hand:

If the customer experience of a particular brand is taking place on external social sites, then there is now a distributed model for managing a brand’s web presence; the web experience/engagement for the customer is now remote from the corporate website. So there is even more need for tools/solutions to monitor, listen, act, engage…for customer-focused purposes, as well as for corporate business goals (which should lean heavily towards the customer).

A WCM/WEM platform may not be the hub for the overall solution, but instead one of the components of a new management framework for all web presence (management of web content is still important but may not be tied to a specific website anymore). But content is also integral to a lot of web marketing plans and strategies, and content is the meat of most social sites, whether it is a conversation thread, a video, a blog post, and so on. So look for WCM/WEM solutions themselves to continue to evolve as the means of managing and delivering any kind of content for sites anywhere on the web, through any channel.

Future Web Presence Management Solutions – What Could They Look Like?

A Web Presence Management Framework may be the best approach for monitoring and supporting a distributed web presence. With an emphasis on Management: the orchestration of all pertinent activities on social sites external to a corporate site. And the management of: marketing to / connecting with customers, monitoring and listening, responding, acting, analyzing, more acting. The Management Framework would be agile, timely, dynamic, flexible, open.

A starter list (high level) of potential capabilities and attributes for a Distributed Web Presence Management Framework:

· Sophisticated, agile management / orchestration capabilities

· Web presence “mashups”: dynamically creating personalized sites for each customer

· An evolved WCM/WEM component: delivery to external sites, advanced support of corporate site if still in play, handling of relevant content/conversations published on external sites

· Support / interoperability for content curation as well as content management

· Management of all types of “conversations”: Auditing - Listening - Capturing - Integrating

· Multiple kinds of analytics, including convergence with “traditional” data analytics

· Dashboards for different internal roles

· Agile, context-sensitive Search / recommendations-like technology to contextually filter content/search

· Integration is big (lots of API support)

· Orchestration and Integration with multiple kinds of “external solutions” that are in play for distributed web presence

· Usability for business as well as tech teams

· Workflow and automated processes for WCM, CRM, SCRM practices, other corporate systems

· Company roles will also evolve: we’ll see new marketing technology roles, product marketing and product management roles for “caretakers” of company web presence on external social sites, among the possibilities

· Segmented customer advisory groups will also play much more interactive roles with management of distributed web presence

· Eventual alignment with semantic web, link management – for reach throughout the web. Here is a current view of opening up content to anywhere on the web:

Forget the fancy names of "semantic web" or "linked data." Associating structured data with your content assets lets you take advantage of Open Graph, Google RichSnippets, Yahoo Search Monkey, and a new generation of agents such as Siri. Disseminating your content with metadata through APIs enables developers to spread the seeds of your brand in a variety of mash-ups and apps. Sharing your data sets in collaborative venues such as Factual and Infochimps helps build relationships with the world of analytic power users, improve your data quality, and turn those dusty data silos into tools for advocating ideas and brands. (from Chief Marketing Technologist blog)

OK, WCM / WEM vendors of all sizes: should your current plans for your solution for corporate websites go forward unchanged, or should you start now to create a Management Framework for distributed web presence?

B2B Social CRM for Software Vendors and the Lifecycle of Customer Experience

Moving beyond WCM - Web Experience Management software solutions and markets