'Microsoft must transform its marketing in the next three years or fail' - Chris Capossela, Microsoft CMO.
Capossela issued this bold instruction at the ANA 2014 Masters of Marketing event.
Three years on, his advice has shaped the way we approach marketing. Here's a look at how we've made the journey to a modern marketing strategy and how our partners can do the same.
The need to transform
Following the 2014 appointment of Satya Nadella as CEO, Microsoft has been focusing on humanising the brand and taking a customer-centric approach. This transformation required a fresh marketing strategy, with the firm's top marketer, Kathleen Hall, keen for partners to follow our lead.
'Satya is all about the growth mindset. The old Microsoft was about being right, the new is about learning and admitting sometimes we don't know', Hall told Marketing Week.
Reviewing our position
If you're an established company reliant on familiar processes, it can be difficult to get colleagues to recognise the need for change. We were no different, especially considering the successes we'd had under our old strategy.
At the 2016 Microsoft Worldwide Partner Conference, Capossela told the audience that a viral image became the turning point in the bid to convince employees that their outlook to marketing was outdated.
The image (see above) featured a lecture hall full of students, each with an open laptop. Out of more than a hundred computers, only two of them were Windows machines. At this time, Windows held 88 - 92 percent of the PC market share, yet the image failed to capture this.
Why was this the case? Capossela realised the brand was losing relevancy with millennials in the US, which meant greater business problems could be on the horizon. Swift action was necessary.
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- The opportunity for change
- The popularisation of mobile and cloud technologies has caused a significant shift in the tech industry. For Microsoft, this change offered both threats and opportunities:
- New competition appeared in the marketplace.
- A new business model was required.
- New customers became reachable.
- New services were created.
In recognising this shift, we became aware that dated marketing methods could no longer compete. A new strategy was required, and the first step was to consider how the company branded itself.
We knew that by redefining our identity, our message would resonate more deeply with target buyers, turning casual customers into brand evangelists.
Defining who we are
'If Apple stands for cool, Google stands for search and Facebook stands for sharing, what do we stand for?' This was the question Microsoft had to ask itself.
The answer we settled on was 'empowerment'. A new mission statement was launched to reflect this mantra and convey our customer-centric approach. But what about your own identity as a partner?
To define who your company is, first consider what your audience wants from your product or service. What do you stand for? What makes your company unique from its competitors? Why should your customers care about you?
For us, this meant not only considering our user experience, but also empowering our customers and partners through our marketing channels. Following Inspire 2017, we've committed to simplifying the structure of our marketing department, keeping it:
1) Outcome focused
2) Relevant to all partners
3) Scalable
We're not looking to sell software for software's sake, but offer solutions that make life easier for the entire partner ecosystem and the customers you're selling to.
Addressing our weaknesses
Director of Marketing Technology, Charles Eichenbaum, explains how Microsoft decided which areas of marketing to initially focus on. By dividing existing marketing activities into four sections, Charles and his team could decide which needed the most attention:
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- Brand reputation was strong, building trust and recognition.
- Sales enablement was performing well.
- Marketing intelligence was offering great value and business foresight.
- Demand creation was underperforming.
The team quickly realised it had been celebrating marketing success without properly measuring key performance indicators. Analysis became the lynchpin of future strategies and our journey to modern marketing was underway.
An updated approach to modern marketing
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- Microsoft's modern marketing strategy consists of several key ideas:
- Offering personalised content and customer experiences.
- Introducing our company culture into our marketing.
- Creating a more aligned and connected sales and marketing experience.
- Telling a story and educating our customers on specific verticals or industries.
- Tracking and analyzing the entire purchase journey to improve marketing ROI.
- Taking care of our customers and forging life-long relationships.
We decided to begin our marketing transformation with a corporate pilot. This process was based on three core principles:
1. Start small
2. Ignore legacy constraints
3. Provide space to explore and innovate
To prove viability before scaling, new marketing activity concentrated on one product for each campaign. The pilot made measuring success easier, leading to stronger proof of marketing ROI.
The results were interesting. While previous campaigns had received high numbers of website visitors, they would often leave without taking any action. Each of these visitors was a lost opportunity as no identifiable data was gained.
New processes meant previous website visitors could be re-engaged with retargeting ads. These ads encouraged visitors to complete a simple action such as signing up for a webinar. Prospects would click the ad and arrive at the webinar registration page, enter a few personal details, and identify themselves a potential lead.
Seeing an increase in paying customers
The pilot allowed Microsoft to differentiate between new and returning visitors and establish where they were in the purchase journey. At this point, we could apply lead scoring. Once a visitor took a qualifying action (such as requesting a demo or free trial), they were passed on to the sales department.
The pilot showed that 7.2% of webinar watchers became paying customers. This was the first time that Microsoft had access to such measurable data and principles that could be transferred to all aspects of marketing activity.
You can replicate this success in your own company by ensuring you make the most of campaign data and adjusting your processes to inform and engage your target audience. Our 5-minute guide to building a business case for modern marketing can help you take the first steps.
Empowering the Microsoft ecosystem
Aligning our sales and marketing teams has been a big part of our development, helping us understand the whole of our customers' purchase journey. We've highlighted digital transformation as the biggest driver in the current market and are investing in strategies to empower our partners and customers. These include innovations in:
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- Modern workplace
- Business application
- Applications and infrastructure
- Data and AI
Since productivity, security and device management are the main pain points for our customers, these are the issues we're keen to address in our content and messaging.
The keys to marketing transformation
When beginning your own modern marketing journey, consider the Microsoft approach to transformation:
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- Start small. Don't begin with a complete marketing overhaul. Start with just one product or service and build out just one campaign. This will ensure your processes are robust, measurable and linked to specific ROI.
- Review who you are and how you communicate. To resonate with your target audience, take a customer-centric approach. By focusing on helping your audience achieve their goals, you not only create new customers but also life-long fans. These fans will be more vocal about your brand and help spread the word more quickly.
- Make the most of your data. The biggest advantage to a modern marketing approach is the ability to lead your customers through a carefully designed purchase journey. The only way to do this is to monitor and analyse previous campaigns, ironing out any weaknesses and building on activity that increases both engagement and revenue.
For a more detailed look at Microsoft's marketing practices, check out our free Partner Transformation Toolkit.