Inside IBM: Digital marketing, the empowered consumer, and education

To help us understand IBM's marketing efforts, their Chief Marketing Officer, Doug Brown, made an exclusive appearance on CXOTalk.

During the lengthy and wide-ranging conversation, which you can watch below, we discussed how the relationship between enterprise vendor and customer has changed. IBM's response to these changes offers valuable lessons for both large and small companies.

The so-called empowered consumer underlies much of that relationship shift.

Today's customers can research features and product comparisons by reading analyst reports, case studies, blog posts and, most importantly, talking with other users in forums and interest groups. For enterprise technology and service providers, this means shifting from product-centric marketing to audience-, or buyer-centric, marketing.

Digital marketing demands that marketers educate buyers with meaningful and substantive content rather than merely broadcasting messages.

Brown says this kind of education or thought leadership requires the enterprise seller to develop a clear point of view. Sellers must base that perspective on understanding what buyers need and providing them with "authentic" explanations and background information:

Knowing the buyer is as important as knowing the product. The important part now is answering the 'how' question and not just the 'what' question.

Digital marketing enables marketers to develop a more finely-grained understanding of what particular customers and groups find relevant or interesting. This detailed knowledge allows vendors to create marketing content that encourages prospects and buyers to take action and drive engagement.

IBM uses the term "cohort marketing" when referring to narrow market groups, far more finely-grained than traditional marketing segments. Brown explains the difference between cohorts and segments marketing to individuals rather broad groups:

In the old days it was a segment -- common wants and needs, common buying behavior. As we move from B2B [business-business] to B2I [business-to-individual] in an evolutionary way the first step is role-based marketing, where we understand the role. We are trying to take that to the next level, which we call cohort-based.

He explains that there are differences in behavior among people belonging to a particular role. For example, some Vice Presidents of Operations may know IBM well and be longstanding customers while others have no relationship with IBM:

Those distinctly different behaviors [belong to] two different cohorts. We build content in our marketing campaigns differently for each of those cohorts. Our portfolio marketing teams build content that's empathetic to the actual cohort based on their behavior.

The goal of IBM's cohort marketing strategy is understanding the needs of individual buyers sufficiently well to tailor meaningful content to their particular interests - the reference point is always the customer:

We really don't think much about segments anymore; we think about the individual. Marketing to the individual [means] decomposing segments into recognizable buying behaviors, at the cohort level within the role. Redefining our content that way and then putting it out digitally and tracking how it is being picked up and used.

This approach reshapes marketing in the enterprise. Historically, the enterprise buying cycle centered on carefully presented vendor messages that culminated in an RFP process and group purchase decision. The entire process involved tight control over information flows and governed how buyer and vendor communicate to each other.

Today, providers can use data about customer behavior to track, evaluate, and understand issues of concern to the most narrow groups of cohorts and potential customers. The result is a profound and unparalleled ability for enterprise technology vendors to shape and influence the buying process.

Brown believes that enterprise marketing in this way rests on product knowledge and empathy for the customer:

The need for empathy towards the buyer is huge. It is actually a differentiator when we can really build content that is empathetic about the buyer and the problems they have, the struggles they're going through, and the way that they might perceive something.

It used to be you could be a pretty good marketer if you understood your product and could pitch your product and talk about its feature functions and benefits, and link it to a business problem. That doesn't suffice anymore.

Now, you've got to, equally, understand the buyer, their challenges, their problems, how they think about things.

He views this approach as offering customers education based on an empathetic understanding of what they care about:

Knowing the product is as equally as important as being empathetic with the user, so there is a 50-50 ratio.But, causing people to act is increasingly driven by providing lessons of things that are possible.

Knowing the product and being empathetic to the user, and putting that into the context of teaching. Whether that teaching is done digitally, at an event, in community circles or whatever it is.

The teaching, just like building a lesson plan, has to be crisp; the content has to be crisp. There is a whole other piece of this, which is effective communications and the skills to communicate crisply and succinctly and on point.

The bottom line. Product knowledge, empathy for the customer, and education are the foundations of successful digital marketing. They are also the components of genuine thought leadership.

CXOTalk brings together the world's top executives, authors, and analysts to discuss leadership, technology, and innovation. Join me and Vala Afshar for new episodes of CXOTalk every week.