Influence Network Solutions: Leveraging the Power of Human Networks to Drive Sales
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1 Influence Network Solutions: Leveraging the Power of Human Networks to Drive Sales
2 Introduction: Different Kinds of Networks
3 Why Study Influence Networks? Sales Increasing number of new customers without adding sales staff Improving up-selling and cross-selling success among current customers Building a more effective sales team Improving channel sales yield Marketing Improving the yield from both in-person and online events Recruiting the right spokespersons Developing and delivering more relevant messaging Strategy New product launch M&A integration Improving organizational effectiveness Influence Networks reduce risk. We turn to trusted advisors because they help to reduce the risk of critical decisions. In the current economic environment, knowledge of Influence Networks is a key competitive advantage. 3
4 Fundamental Insights 4
5 Communication Structures Think about the audience you are trying to impact FORMAL GROUP SOCIAL GROUP STRUCTURE Prescribed, Rationale, Stable Emergent, Emotional, Dynamic INFLUENCE Authority, Position, Top-Down Personality, Power, Bottom-Up COMMUNICATION Formal, Well-defined, Silos, Memo Grapevine, Word-of Mouth, Across the Organization INCLUDED INDIVIDUALS Position, Role, Sphere Those Like Me, Peers BASIS FOR INTERACTION Duties, Functions, Responsibilities Spontaneous, Personal Characteristics 5
6 Relationships Are Vital A message delivered from a Trusted Advisor will always be more powerful than a message from a biased source. People are bombarded with Your Brand Competitor A information from a multitude of channels How people are connected socially affects how they access and interpret information The more information they are exposed to, the more they rely on trusted advisors to distill and interpret it Competitor B 6
7 Academic Foundations Diffusion of Innovations The process by which certain channels communicate an innovation over time among members of a social system. This process can be studied to understand how a community decides to adopt new ideas, purchase products and services, etc. Decreasing Risk Tolerance Adapted from Diffusion of Innovations Eve re tt Rogers Moving from Awareness to Integration AWARENESS The customer hears about the product /idea for the first time. THE REALM OF TRADITIONAL MARKETING AGREEMENT INTEGRATION The customer evaluates the relative value of the product / idea. The product /idea is a routine part of the customer s behavior. ADOPTION COMMUNITIES OF PRACTICE Social Network Analysis The customer tries out the product /idea. Focuses on revealing the authentic, pre-existing channels that individuals use to vet ideas and assure relevance for their needs. These channels can be leveraged to more effectively spread ideas and spur community action. Adopted from Diffusion of Innovations Everett Rogers 7
8 A Different Model: The Research The central theme of diffusion studies is that people act as communities rather than aggregates of unrelated individuals and that behavior is literally contagious. (Disseminating Research/Changing Practice, ed. Earl V. Dunn, Peter G. Norton, Moira Stewart, red Tudiver, Martin J. Bass, Dixon, 1990, page 208.) 8
9 Characteristics of Innovation Research* has found that there are 5 primary characteristics of an innovation or product that determines its uptake velocity. Evidence of benefit Compatibility Complexity Trialability Observability *Rogers, E. M. (1995). Diffusion of innovations (4th ed.). New York: The Free Press. 9
10 The Diffusion Curve 10
11 Bass Diffusion Model Nt = number of adopters m = potential market p = coefficient of external influence; media, sales force; equal to 0.03 q = coefficient of internal influence; word-of mouth, friends, relatives; equal to 0.38 The rate of adoption is dramatically impacted with Internal Influence, which is 10x more powerful than external messaging. Moving the slope lightly brings large rewards. 11
12 The Adoption Process Awareness General Communication Network Moving from Awareness to Integration AWARENESS The customer hears about the product /idea for the first time. THE REALM OF TRADITIONAL MARKETING Agreement/Rejection Technical Advice-seeking Network Adoption Trust and Friendship Network AGREEMENT INTEGRATION The customer evaluates the relative value of the product / idea. The product /idea is a routine part of the customer s behavior. Adherence & Integration Personal Choice & System to Facilitate ADOPTION COMMUNITIES OF PRACTICE The customer tries out the product /idea. Adopted from Diffusion of Innovations Everett Rogers 12
13 How we drive sales by applying an analytical approach to understanding human networks 13
14 A New Approach: Traits to Trust Mass approach Target the usual suspects Commoditized data Relationship-driven approach Engage with Trusted Advisors Unique data 14
15 What is Social Network Analysis? Social network analysis is focused on uncovering the patterning of people's interaction. The network approach to the study of human behavior involves two commitments: (3)it is guided by formal theory organized in mathematical terms (4)it is grounded in the systematic analysis of empirical data Network analysts have found important applications in a variety of fields, including organizational behavior, inter-organizational relations, the spread of contagious diseases, mental health, social support, and the diffusion of information. -International Network for Social Network Analysis Social network analysis is often confused with social network services, such as LinkedIn, MySpace, and Facebook. Many of the connections on social networking services do not reflect the true and meaningful nature of people s interactions. 15
16 Are These Decision Makers Isolated? 16
17 Discover Your Targets Influence Networks 17
18 One Step Further: Trust to Revenue $500,000 IT Budget $76 million in IT Budgets The impact of this one IT Professional is much greater than the $500,000 IT budget she impacts within her company. In addition to influencing IT spending within her own firm, her influence impacts more than $200 million in IT spending at more than 40 organizations. $200 million in IT Budgets 18
19 Predictions are Risky More than 80% of Trusted Advisors identified by the target audience themselves are either completely unknown or not currently being targeted by the client, according to multiple studies across categories, products, etc. Source: Community Analytics
20 Empirical Data is Accurate and Insightful C-Level executives rely on individuals outside of their companies and in less senior positions for advice when evaluating enterprise level technologies. Source: Community Analytics
21 Influence is Local More than 75% of these critical relationships are local. In spite of the evolution of the flat world, decision makers are more likely to rely on Trusted Advisors they can interact with in person on a somewhat regular basis. Source: Community Analytics
22 Turning Research into Action Ensure that positive word of mouth is being passed from the most strategically positioned individuals in the network to those associated with them. 22
23 Remember This Guy? $500,000 IT Budget $76 million in IT Budgets The impact of this one IT Professional is much greater than the $500,000 IT budget she impacts within her company. In addition to influencing IT spending within her own firm, her influence impacts more than $200 million in IT spending at more than 40 organizations. $200 million in IT Budgets 23
24 Analytics in Action Business Goal: Increase sales of servers and storage devices in this key metro area Data: Phone interviews with CIOs/CTOs/VPs to understand who they rely on when selecting servers and storage devices Analytics: Analyzed the network to reveal the true Trusted Advisors and prioritize them based on potential revenue impact Action: Recruited 25 of the 100 identified Trusted Advisors to serve as panelist, speakers and small group leaders for a regional event Leveraged identified relationships of trust and advice-seeking to speed the sales cycle and prioritize opportunities Invited all of the Trusted Advisors (those with positive, neutral and negative views of the products) to share their opinions and suggestions for product improvements and how to better serve the IT community in this geography Results: Doubled event attendance from the previous year Moved perceptions of all negative Trusted Advisors to neutral or positive, and as a result, saw an improved satisfaction rating throughout this geography Increased number of opportunities for the sales team as well as the close rate for those opportunities 24
25 Now it s Your Turn Individual Sales Strategy Business Goal: Data: Analytics: Action: Results: Comprehensive Sales and Marketing Strategy Business Goal: Data: Analytics: Action: Results: 25
26 Additional Applications 26
27 Improving Organizational Effectiveness This account team member was completely isolated with very few client connections. Once the firm recognized this, strategies were implemented to increase her connections within the firm and with existing clients. Inside Group Outside Group/Inside Company Client Other This person was clearly a bottleneck, so it was no surprise that they were often listed as the barrier for closing client deals. After the firm recognized his precarious position, additional resources were provided to him and decision rights for certain activities were more evenly distributed. 27
28 Analytics in Action Business Goal: Increase revenue generated by this sales organization Data: Online survey of employees, coupled with performance data and other attribute data provided by the organization Analytics: Analyzed the network characteristics of high performers and high performing teams as well as under-performers Action: Coach the account team lead whose team was disconnected from the rest of the organization to build ties with her colleagues in similar roles Develop an account team rotation program aimed at building collaborative relationships across account teams to increase up-selling and cross-selling opportunities Provide administrative support to the identified bottleneck Delegate some of the decision rights previously held exclusively by the bottleneck Results: 40% increase in revenue generation in 6 months Improved account penetration (more than 20 new opportunities identified within current clients as a result of the targeted rotation program). Shortened time to close deals by removing the bottleneck in the contract process 28
29 Institutionalize Customer Relationships From our work with a leading Financial Services Firm: 85%of key network members* are not known to the Firm 15% of trusted advisors are academics who advocate a methodology of fund management in conflict with the Firm s current offering Financial Services Professionals seek advice from individuals, not companies and turn locally 29 CONFIDENTIAL Community Analytics Community Analytics All rights reserved. Community Analytics CONFIDENTIAL Community Analytics All rights reserved.
30 Analytics in Action Business Goal: Increase assets under management for this financial services firm Data: Phone survey of investment advisors, coupled with amount of assets under management and other attribute data of interest to the Firm Analytics: Analyzed the networks of investment advisors relative to portfolio construction and find management Action: Develop an outreach strategy for the academic community this was an audience whose influence had been under-estimated Sales and marketing teams established relationships with identified trusted advisors, inviting them to serve on an advisory board that now shapes the way in which the Firm approaches this market Shifted product development strategy based on input from Trusted Advisors about the real needs of the community Results: 20% increase in share of wallet among the targeted investment advisor community Increase in positive press (unsolicited) through the work of the advisory board 18% increase in new investment advisors directly attributable to leveraging the network data 30
31 Finding the Unknown Influencers The influence of this consultant reaches beyond her colleagues and clients as a result of her support and involvement in several civic and charitable organizations. She has a critical role in the network because Consultant Trusted Advisor (Unknown to our client) of the respect and admiration she has earned for her personal involvement in the community as well as her expertise in CRM systems. This consultant influenced the CRM system purchase decisions of more than 42 mid-market companies. 31
32 Analytics in Action Business Goal: Increase sales of CRM system to mid-market firms in two key geographies Data: Phone survey of CIOs/CTOs/VPs in two key geographies Analytics: Analyzed the network characteristics of decision makers relative to CRM systems to identify trusted advisors with the greatest impact on prospective buyers and relationships of trust between Action: Recruit this consultant and 29 other Trusted Advisors to serve as a steering committee for the formation of a regional (eventually national) CRM community Regional sales managers developed relationships with 6 of the identified Trusted Advisors by leveraging connections through their current clients that were unknown prior to this study. Results: 22% increase in new customer acquisition in these two regions, while new customer acquisition in comparable regions fell by more than 10%. Launched CRM community with twice the goal number of IT and business decision makers participating Increase in lead generation from regional and national conferences as a result of inviting the identified Trusted Advisors as well as the decision makers who trust them 32
33 Community Analytics Who We Are Information services organization focused on revealing the influence networks of key audiences that can be leveraged to create powerful sales and marketing strategies. 100% of current and past clients would be extremely/very likely to recommend us What do we mean by Influence Networks? Individuals rely on others to help them make decisions. Influence Networks are the relationships of trust and advice seeking through which specific decisions are made What are the key audiences we study? Customers Prospects Employees Other Key Stakeholder Groups Leader on External Networks at the University of Virginia s Network Roundtable for 3 years CMO Council Keynote and Published 33
34 Client Success Industries where we ve worked: Asset Management Communications/Marketing/PR Consulting Services Foundations Insurance Investment Banks Healthcare Non-Profits Pharmaceutical Technology Universities Venture Capital 34
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