“Your focus needs more focus,” urged the martial arts master, played by Jackie Chan, in The Karate Kid remake. The same could truthfully be said about any of our businesses. Focus is difficult to achieve and maintain. It requires constant diligence and discipline.
We could all learn from the experience of Phononic, the developer of solid-state cooling solutions used in a variety of applications and industries. Founded in 2009 and headquartered in the Research Triangle Park area of Durham, NC, this private company has been named a CNBC Disruptor 50 (twice!) and was just recognized for account-based marketing innovation at the #FlipMyFunnel conference, where I first met them. As a company who is just beginning to take its technology out of the lab and into the market, focus is everything.
Markets in Focus
“As a venture-backed technology disruptor focus is key,” explains Kevin Granucci, vice president and general manager responsible for Phononic’s fiber optic business with a 21-year history in fiber optic transceivers. “Several years ago, we were chasing too many markets and the board of directors asked us to focus on the top few markets.” Spreading resources too thin and failing to gain a beachhead can spell disaster for a start-up and is a temptation of businesses of all sizes. “Fiber optic is one of those markets” that they choose to focus on. “This focus has led to a better return on investment and awareness where it counts most,” Granucci says. “Although the technology can be applied to many use cases and verticals, we use our material science and manufacturing processes to tailor the offering to the needs of the customers in [our focus] markets.” There are other advantages to focusing on fewer markets. Granucci noted that in the fiber optics space they “are trading on awareness and taking advantage of the fact that everyone knows everyone in the industry.”
Lessons learned: Overcome the temptation to play across too many markets, segments or regions. Focus on where you can improve your win rate and build strong awareness and a repeatable process of demand generation.
Customers in Focus
The fiber optic business is very concentrated. In fact, “the market is structured so that 10 to 15 major customers can swing the needle one way or the other,” explained Granucci.
Daniel Englebretson, who serves as Phononic’s director of integrated marketing, saw this as an opportunity. “This customer concentration makes it a great application for account-based marketing,” he concluded.
“When Kevin joined the company, out of the industry of our customers, I said ‘Gold Mine!’ He could answer all of our question about who, how and why,” Englebretson recalled. “We definitely got deep into the different roles that we should focus on.”
Granucci remembers those earliest conversations with “Daniel and the marketing team were focused around the question ‘tell me about your customer.’ How are they different across regions? Who buys the product? Who influences the sale? What are their priorities and requirements?” This was not a traditional conversation between marketing and sales. “I thought that they couldn’t possibly put all that insight and information to use,” he continues, “but what they have done with it to target and penetrate accounts has blown my mind.”
Specifically, Englebretson used this insight to drive the marketing campaign planning. “We broke the target accounts into three different categories. We broke out roles within those target account types,” he said. “Messaging and campaigning stem from the results of that research.” This supplements other inbound activities aimed to unearth new opportunities and position the brand.
Lessons learned: Get as close as you can to the market and customer. Phononic was able to tap the expertise of a 21-year industry veteran in the vertical market. You might have similar subject-matter experts in your organization or available to you in the ecosystem of your channel partners, consultants, specifiers or influencers. Use their insight to reach out to customers to learn more. Don’t forget your inbound marketing can be a source of insight as well.
Approach in Focus
“Being focused on our target accounts and informed by their needs requires discipline,” Englebretson summarized. “Account-based marketing is where demand gen is headed and as a marketing leader, you have to know what is possible.” The landscape is changing as targeted advertising, marketing automation and intention tools enable the change. “So much of the old tech stack was volume-based,” he continued. “It was all focused on generating as many leads as possible and delivering them to sales.” This could deliver impressive campaign metrics across multiple channels, but poor sales results in many cases.
“Our sales cycles are long,” Granucci commented. “It often takes between 18 months and two years from when you start a discussion and proceed through design, samples and qualification to go into production.” Key milestones in the buyer’s journey are labor or resource intensive like building awareness or providing samples of the material for performance testing. The long buyer’s journey leaves a lot of time for a poor quality lead to waste resources before it is disqualified.
“Having an account plan and being aligned on objectives to specific accounts allows us a rifle focus,” Englebretson added. “It is no longer a volume game.”
It kind of reminds me of where marketing automation was 10 years ago. It went from a cool new technology to something companies couldn’t do demand generation without. I think ABM is heading the same way. My KPI bowlers from the past few years have been similar, but there is a shift coming. As I think about my metrics for next year, they will be quite different. More about account penetration and account engagement. To do this, you need a different or significantly modified tech stack.”
Lessons learned: Armed with a customer profile in a concentrated market with long and complex sales cycles, you can utilize a different approach, namely account-based marketing. Start by changing your campaign objectives from volume measurements to account-related goals around engagement and penetration of your targeted customers and watch your behaviors align.
Campaigns in Focus
To approach the market, Englebretson used established process he had used before. “We create a campaign brief which outlines what we want to say, to whom, our budget, etc,” he described. “Key information is there like value propositions and personas. This leads to a buyer journey map, and, ultimately, a campaign map for each campaign.” This structure gets the ‘cognitive overhead’ out of the way and allows us to pivot quickly as the campaign unfolds.”
This cognitive overhead can manifest friction between what product marketing wants and what the creative teams want to deliver. “Sometimes the creatives feel like they can’t be creative and product leaders feel we are creating content that doesn’t resonate,” he observes. This is where the campaign planning process and the work done to define the ideal customer profiles and journeys can establish a common vocabulary for cooperation. “We can then pull up the journey map in every conversation and see how the creative fits,” he said. “We add to and we pull from. It can feel a little anti-creative to provide structure, but creative without purpose achieves nothing, and the framework allows us not to waste time and money while putting just enough constraint on creative.”
Once the front-end process has created campaigns fitting the journey, they make sure to align sales and marketing on the back end. “We do a funnel review with Kevin regularly, to make sure the marketing campaigns are yielding and to find out what is valuable and what they want to see more or less of,” Englebretson explained. “Structure and a few regular reviews go a long way to facilitate collaboration and alignment.”
Lessons learned: Make sure you structure the work and root the conversations around campaign development in the buyer’s journey maps that you have defined. Funnel and pipeline reviews with sales are a key feedback loop to make sure the campaigns are performing.
Focus in Focus
One of the other advantages of focus is that you can learn more quickly than your competition what really matters to your customers and pivot more quickly. “It has been an iterative process,” Englebretson noted. “Our goals have remained focused, but we have broadened and narrowed our approach based on what we have learned.”
Sometimes learning can lead to adaptations in the customer focus. “For instance, coming out of the trade show, we realized that we were not targeting all of the right buyer and influencer titles, so we went back and adjusted the campaigns,” he explained. “We expanded the target account list by 2x as we shifted job titles in our campaigns by adding some and weeding out others.”
Other times the learning can influence the messaging. As a case in point, Phononic found that its messaging around its power consumption advantages were being overshadowed by another feature, non-hermetic packaging. “At the trade show and in our A/B testing of ads, we heard the feedback about the importance of that feature, and we ended up shifting our ads,” Englebretson explained. “We bid on new keywords, topics, audiences, and had a presence in that part of the market before our competition, which was a competitive advantage.” This focus allowed to bring down its acquisition costs dramatically. “In the first month of running the new ads, the cost per click was $0.69 versus the previous, which was over $7.00,” he shared. “Bidding on topics that no one else was talking about, and really nailing our audience, gained us new customers at a lower cost.”
This responsive focus is being recognized by the industry. Granucci noted that the company's "empathy and responsiveness are really resonating with customers. No one else has been listening like we have and adjusting so quickly.” Englebretson added that “when you know the products and offering, that is where you get focus and you continually improve to crush the campaign objective. New information can yield new tactics, but the objectives stay the same." With agility, the objectives can be achieved.
Lessons learned: Focus doesn’t mean being rigid or inflexible. Quite the opposite. A focus on the customer and empathy for their needs, combined with good judgment and agility, can put you closer to achieving your goals.
