During the last twenty-four months, business-to-business technology players have miss-positioned their corporate business development by disproportionately spending their firm’s funding resources on brand awareness instead of revenue generation.
Branding is not revenue.
Branding is not advertising.
Advertising is not revenue.
Revenue is Revenue.
In a world where email press releases create public company stock spikes, and where b2c companies are spending $10 to capture each $1 in revenue, the tactical process of generating business revenue has been lost on hype, inflated market capitulations and instant youth of America CEOs who at 25 are perceived to be experienced senior management. Enough is enough.
The Internet is just a distribution channel. Yes, an extraordinary evolutional step for business, but still just a channel. Just like a direct sales force, a strategic reseller, an authorized distributor or a private label (OEM) partnership, it has a strategic and tactical value as well as an operating expense model that can be prohibitive.
So, what is a brand? Depending on the author of the month, “branding is a strategic positioning in a targeted buyer’s state of mind that creates awareness to select one vendor over another.”
Sounds great, but branding does not create revenue. We have all seen the Super Ball commercials where flamboyant ads that cost million of dollars display funky off the wall concepts trying to create market mind share with a target audience. Additionally, we have been exposed to irrelevant ads (remember the original Lexus ads of the early nineties that never showed the car) that don’t show the product or service but display some artsy message.
Well it’s time to change. As technology business executives, we need to recapture our operating business models back from ad agencies, marketing departments and business brand managers and start operating in the new economy based on old economy proven business revenue methodologies.
Prior to the aggressive expansion of the Internet in 1997, branding, marketing, PR and ad agencies were staff positions and advisors in a corporate traditional hierarchy. With the advent of the new economy, these departments launched themselves into line position responsibilities. Instead of advising management on communication strategies, they implemented programs. So, an ad agency that was selling cereal and print placement in 1996 now evolved into interactive media experts. Although, this comment may not be well received by my agency friends, in fact it is accurate. Who pitches all of those dumb ads you see on TV to an executive steering committee of a high technology firm – an ad agency. Who built entire companies operating business plans around a company name with no supporting revenue model – a brand manager.
Does having positive client brand awareness help sales, yes of course. But, is brand building the most efficient form of spending to create revenue for a high technology firm start-up – no. If you listen to staff departments who has never sold software or collected a million dollar P.O. for a technology service in a competitive marketplace as your primary influencer to build revenue, then you will get limited revenue.
Accepting this fact, you are now on your way to increase your sales.
Building revenue in the new economy is based on implementing a business development approach to revenue. Prior to 1998, the term a Business Development Manager was synonymous with the word salesman or account manager. But at the new economy evolved, the element of technology and partner collaboration also developed. Today, the term business development has matriculated into a hybrid business approach where sales, marketing and strategy are interactively liked together to generate revenue.
Using a BDM approach to generate revenue you combine old world sales methodologies and new world collaborative relationships to focus on tactical revenue generation. The successful technology companies of our time were all built on a persistent sales force, not branding.
To generate increased revenue for your technology firm, implement these guideposts:
1. Cut your advertising budget in half – you’re already probably spending too much.
2. Reduce your PR. Most firms spend a disproportionate amount on PR. PR and viral marketing worked for Napster but failed for Pets.com. Increasing revenue and being profitable will create a greater spin than any PR budget.
3. Get the very best VP of Business Development, you can find and afford.
4. Never let an ad agency or a marketing department convince you of running a conceptual marketing program, they rarely work and are usually more expensive than traditional communication campaigns.
5. Hire Business Development Managers, not salespeople. The new economy is a world of collaboration – you need seasoned talent who can strategize and partner their way to revenue. People generate revenue not a company name.
6. Increase your telemarketing budget – it works, it effective and it helps reduce sales cycles by half.
7. Never let an ad agency sell you positioning marketing expenditures. If you increase your revenues and treat your customers well – you are building a market position and a brand.
8. For every market you identify pick at least three strategic partners to help increase your collaborative sales.
9. Never add more partners than you can handle. Most firms love adding partners, but most regional BDM’s bandwidth can only handle so many relationships efficiently. Remember, strategic partnerships are not about Press Releases; it’s about more revenue.
10. Don’t develop your marketing collateral materials in-house. Your communication materials need to be direct, informative and well executed. In house productions always look unprofessional.
11. When revenues in a regional area are flat, cut the BDM’s territory (or market) in half. By reducing territory size, you force BDM’s to find the hidden sales opportunities that get lost in a target rich territory.
Following this outline will help you focus on true revenue producing opportunities and reduce misguided or miss-directed new economy traps of brand management. Create your brand through increased sales.
S. Denise Hoyle is President and co-founder of http://affiliatesifter.com/, an affiliate directory site devoted to providing links, news and information of interest to webmasters and affiliate program managers.
