‘Au revoir’ marketing scientist

30 April 2011 was an auspicious, if a little sad, day here at Velocity Towers. Not because celebrations of Will and Kate’s nuptials got out of hand (“Wedding? What wedding?”, says resident roundhead, Neil Stoneman). But because of a key farewell.

Watton ships out

After three-and-a-half years, one of our favourite B2B marketers, top clients and all-round great egg, John Watton is moving on from his job as CMO at ShipServ, the leading ship supplies e-marketplace. Elected B2B Marketer of the year in 2009, he has transformed ShipServ’s fortunes on a limited budget over that period. He was one of the first European users of Marketo (ShipServ itself is the longest serving SalesForce customer in Europe) and drives Google Analytics like Lewis Hamilton on steroids.

We started working with John in December 2007 and he was effectively our first agency client. He is the source of much of our thought in these pages on lead nurturing and B2B marketing in general. We thought we’d take the opportunity to ask him some questions about his time at ShipServ and what he’s learned.

Some background

A typical shipping company spends almost $600000 per ship per year on operational supplies of spare parts, provisions, paint, and consumables. The industry in total spends over $70 billion every year – and the rate of increase in ship operating costs has nearly doubled in the last 12 months.  ShipServ helps the buyers and sellers of ship supplies to reduce these costs. It’s where buyers find suppliers, get quotes, place orders and manage their spending. It’s where suppliers access these billions of dollars  in purchasing power. The industry is highly fragmented, ultra-global and very conservative. It’s been slow to adapt to the Internet, but e-transactions are now growing rapidly.

In the early Naughties when talk of dis-intermediation was at a frenzy, over 50 maritime e-marketplaces were formed, supported by hundreds of millions of VC dollars. ShipServ is the last man flourishing, the undoubted market and thought leader. The rest have disappeared under its broadsides. The company has a flexible monetization model with some freemium elements, a buyer subscription model and seller listings and advertising. It has a dozen or so direct sales guys selling to ship managers and larger suppliers and a 60-strong Manilla-based telesales team converting the bulk of the supplier community. The company is a micro-multinational with over 150 people in six countries.

Stan: You had  marketing roles with companies like Oracle, Microsoft and Ariba before ShipServ. Why were you interested in the CMO job there?

John: I’d done the hard yards of working in the subsidiaries of North American-based tech firms and was looking for an opportunity to drive marketing from the top, to work with a founder-entrepreneur like Paul Ostergaard, and get close to the company strategy. I wanted a hard connection between what marketing does and the real performance of the company. In large firms, marketing can sometimes get lost in the matrix.

S: So what was the first priority?

J: The company was great at opening doors in shipping companies, was well-connected and reasonably well-known among some key industry movers and shakers.  But at the time it wasn’t closing enough deals. My initial task was to develop a more compelling value proposition. We had the right sales people and the right product, but sales cycles were too long. We had to create the ‘compelling event’ and the supporting messaging that turns suspects into advocates. The first few months were a flurry of segmentation work – actually who were we selling to and what were the meaningful differences that defined those segments? We had to identify the exact nature of the business pain they were suffering and we spent long hours in messaging work to identify how we could link our products to solving that pain. Then we spent effort in really quantifying the results we could deliver, and identifying the difference ShipServ’s e-marketplace tech actually made to the customers. We made our ROI story watertight. We had to make our offer replicable, relevant and believable. We had to work to simplify and clarify the message.

S: You had no marketing infrastructure and limited budget. And the market you are addressing is vast and fragmented. How did you get started?

J: The temptation when you arrive in a new job is to jump straight in and ‘do stuff’ like re-vamp the website, re-do all the collateral and produce new sales pitches. And it’s almost what the rest of the company expects marketing to do. Tempting but not wise. All of these are simply vessels for content and without the right content, that’s what they remain, empty vessels. That’s why we spent so long on honing and refining the message. As you know, we did overhaul the website in the end, but probably the most striking innovation in those early days was the introduction of Marketo. We took Marketo on trial and ran some test campaigns and proved we could get a better conversion rate than with other, more traditional campaign approaches.

Because we had limited resources, we had to find ways to do marketing tasks, easier, faster and cheaper.  That meant marketing automation, but we didn’t want a plethora of tools. We needed simple admin, great reporting and the ability to squeeze every drop of marketing juice out of what we could create. Our Marketo trial proved that we could run more campaigns more frequently, more cost effectively and with better rates of return using a new marketing automation palette. We’re a web-based business, so we invested heavily in analytics and together with Marketo we made sure no leads fell through the cracks. We were able to understand more about what our customers were interested in and gain intelligence about what their online behaviour actually meant. Tools like Marketo had existed before, but their price point was really too high for a growing business like ShipServ. There was too much bespoke CRM integration work that was required. With the advent of Marketo and other similar cloud-based tools, we were able to get really granular and scientific for a much lower cost.

S: How did sales react?

J: It was like a breath of fresh air to them. They had been used to being handed a bunch of random business cards from an exhibition. Now we were working with them to define exactly what a sales -ready lead actually consisted of. We introduced the concept of a ‘marketing qualified lead’ or MQL and this became a sort of contract between me and the sales team. We committed to delivering leads of the type that they wanted – in terms of type or size of company, its location,  and its requirements. And sales committed to actioning these leads and reporting back to us on progress.

What we learned was that marketing had to be involved in defining every stage in the funnel from generating awareness through to actual win or loss. We needed a total picture of the process flow, so we could calibrate our marketing activity to generate a high propensity to convert. We then got medieval on numbers: we tried to set targets for and measure everything. We worked out average deal sizes per segment and how many leads we needed at the top of the funnel to hit sales’ revenue targets. We established how many perished at each stage of the process. Then we designed campaigns to deliver the right number of leads. Our small field sales team handled high end sales worth several tens of thousands of dollars. And our 60 person telesales team in the Philippines were selling a variety of products ranging in price from a few hundred dollars through to several thousand. And they don’t do any tele-prospecting. We had to deliver all their qualified leads, thousands and thousands of them.

S: What about lead scoring?

J: Well the first thing to say is that it’s more of an art than a science.

We implemented lead scoring very quickly and the more experience we got, the better we were at it. The good news is that if you invest in marketing automation and CRM tools, you never lose the data even if your campaigns don’t work. That means you can change or refine the lead model based on new insights and market feedback. I guess that’s one of the key things I’ve learned over the last few years: all marketing people should think of themselves as marketing scientists (a term I first heard Pete Jakob at IBM use), working at their own bench in a marketing lab somewhere, testing out hypotheses and trying to turn those hypotheses into universal theories. It’s early days for marketing automation in B2B, so a ‘test & learn’ culture is pretty much essential. At ShipServ, an experimental  philosophy let me prove various tactics on a small scale and mitigate financial risk. When I discovered stuff that worked, I could prove that spending more on it was worth it. I also implemented a transparent scorecard mentality across the company, where it was OK to admit when outcomes were less than expected. That allowed us to take some marketing risks and break out of the straight-jacket of traditional tactics.

S: So, is there anyone that shouldn’t use marketing automation?

J: That’s a tough one. Before ShipServ I did marketing at Cramer, a middle-sized leader in OSS Solutions for telcos, subsequently acquired by Amdocs. They had 400 potential customers in the world and knew the inside leg measurement of every one. I guess someone could make a case that for a company like that – where lead generation is not a high priority – the need for marketing automation tools is lessened. But even here, where the real need is to build rock-solid community in order to facilitate cross-selling and up-selling, lead nurturing tools integrated with CRM can be really vital.

S: You’ve got involved in doing  just about everything at ShipServ, things like blogging, social media marketing, hands on driving of Marketo. Is your scrappy, entrepreneurial approach the way B2B marketing is going?

J:  Today it feels as if senior marketers need to roll up their sleeves and get stuck in to marketing execution. It used to be that the normal career progression of marketers in large tech firms meant that they got further and further away from the execution side of the work. Now marketers need to be far more collaborative with customers and prospects. They’re online all the time now and feel empowered to criticise what you’re doing freely and openly. They did that before Twitter and Facebook and LinkedIn of course, it’s just that marketers never really got to hear about it. Now those channels offer a quick way for marketers to get engaged and address a customer’s issues directly and immediately. That feels like a good thing, but it means senior marketers need to invest in learning about social media, about marketing automation, blogging and monitoring blogs, driving analytics and all the other tools that are springing up. In the world of always on campaigns, it’s only the more connected and more tech savvy marketers that are going to be needed.

It may take what seems like a disproportionate amount of time to learn, for example, about Twitter or how to make Facebook groups work, but it’s worth the investment even if that channel proves to be less useful to your particular company. After that initial investment, things will settle down and you’ll be able to understand where that tool fits in your marketing mix. And you’ll be more experienced and able to evaluate the next gizmo that happens along.

S: Any predictions for the next three years?

J: We’ll definitely see the maturation of marketing automation. It will become one of the key weapons  – alongside the best content – in the B2B marketing arsenal. Just look at the number of conferences and exhibitions, articles and blogs that are springing up around this area. And look at the explosion in tool vendors. Any B2B marketer worth her salt needs to understand what’s happening here.

Engagement with social media will also continue apace and go mainstream. Marketers cannot control when the conversation happens anymore. They need to learn how to dive in and engage with the market, to really understand what it wants.

Thanks for that one, John, and best of luck in the next gig. It’s been a steep learning curve and we feel privileged to have played Sherpa Tenzing to your Edmund Hillary.

Photo: Flickr Creative Commons