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Influence Direct and Indirect
Articles, Business, Marketing

5 Questions: The Value of Direct vs Indirect Influence

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Influence Direct and Indirect

Almost every action, choice or decision we make is the result of “influence” in some particular way. Even our personal preferences are shaped by influence, perhaps through the actions of others (“hey, you should really try this out”) or perhaps through our own past experiences (“I don’t care what you say, I’ve tried the bagels at that deli and they just don’t cut it for me”). Peer-pressure, marketing, advertising or even a desire to try something different based on past experiences are all forms of influence that shape our lives.

DIRECT vs INDIRECT INFLUENCE

Nowhere is the impact and value of influence more evident than in the world of business, as businesses are continuously trying to influence their target audience (customers) and partners to their benefit. When it comes to business, there are two different ways that a business or an organization can reach or influence its target audience – direct and indirect. Direct influence is when a business specifically targets or touches their target audience – it is a direct “us to you” type of interaction and gives the business the most control over their message (it’s a one-step connection).

The difference between direct vs indirect influence is like the campfire game – what you tell one person may not be what they tell the next…

Indirect influence, on the other hand, is a bit more of a challenge as it involves a third-party (and intermediary influencer of sorts) that the business needs to influence in the hopes that the third-party will in turn influence their target audience.

UNDERSTANDING WHO INFLUENCES, AND HOW

If we take a look at the different organizations within a typical corporation, we can see how they influence the organization’s customer base.

Direct Influence Groups

  • Sales directly touches the customer through personal 1:1 interaction. This is the front line, where the influence of a sales strategy & pitch (or even an individual sales rep) can be the most directly measured.
  • Marketing touches the customer base en masse (although sub-segmentation usually occurs to a great extent). Their goal is to directly convey a corporate or product image, create demand and literally influence a customer to think about their product or service. Measuring the success, or influence, of a marketing campaign is possible, but not quite as easily as the direct 1:1 interaction of a sales rep.
  • Business Development touches organizational partners. When it comes to building partnerships and team-oriented strategies, business development is the functional equivalent of sales – it is almost always a 1:1 pitch and its effect can be immediately measured.
  • Customer Service touches existing customers. When the customer has a problem, customer service can not only help resolve issues and answer questions, but can, on a 1:1 basis, help influence how a customer uses a product/service, how they perceive the company in general and, potentially, influence future sales.

Indirect Influence Groups

  • Analyst Relations (AR) involves the process of interacting with, and influencing, industry analysts, who in turn have the ability to influence their clients and followers (your target audience). Measurement of this influence can be difficult.
  • Public Relations (PR) targets the press and media (print, online, bloggers, etc.) with the goal of influencing these groups and individuals to share information with, and thus influence, their readers (your target audience). The influence of PR campaigns is often measured by the number of “mentions” a firm has, or by a post-campaign outreach to measure public (potential customer) awareness, or (if the PR campaign is designed to improve the value of a tarnished brand) consumer sentiment.
  • Investor Relations (IR) has a similar role to AR, in this case dealing with financial analysts and investment firms with the hopes of shaping a positive image and value proposition about your firm, which they hopefully will share with their clients, resulting in a healthy stock price. Measurement of IR value often (and somewhat unfairly) is measured by stock price or analyst recommendations alone, and not by increases in consumer sentiment or sales (while the financial analysts and investment firms may not directly interact with your target audience, it is hard not to connect the dots between a poor/falling stock price and the reluctance of consumers to purchase your product – nobody today wants to buy from a business that is viewed as financially at risk).

The Wild-Cards

  • The C-Suite, who has the ability to make or break a deal, to influence their entire customer base or investor community with a single sentence (think of the power and influence that Steve Jobs has by merely showing up at an event!).
  • The Customer – perhaps the most influential group of all, even if they are outside the core corporate structure (a perspective, by the way, that I think is slightly off-base: the customer should *always* be considered part of the complete business organization). Their ability to drive your business should be both welcomed and never underestimated.

ALL ANIMALS ARE EQUAL…

As George Orwell said, “All animals are equal but some animals are more equal than others.” Perhaps the same can be said for influence as well. You could put forth a very interesting argument that certain forms of corporate influence are more important than others, perhaps even more effective than others, and certainly more cost-effective (in terms of bringing new customers to the table, and retaining them over the long term, converting them from customers to clients).

All influencers are equal but some influencers are more equal than others…

So let me pose a few questions – knowing full well that the answers will vary between industries, markets and economic business cycles…

  1. Are all business groups equal when it comes to the value of their influence?
  2. Are certain types of corporate influence more effective in *gaining* new customers?
  3. Are certain types of corporate influence more effective in *retaining* existing customers?
  4. With a limited budget, where would you focus your resources in building a strong corporate influence strategy?
  5. Is it possible for all of the different business groups to effectively work together to form a culture of “fluid corporate influence” that operates as a continuous feedback loop, or are there just too many barriers and silos for this to take place (Bonus points if you can give me an example of a firm that does this today!)?

So there you have it. Five simple questions about influence. I’m curious to know how YOU view the value and role of influence in your organization, and how you think it might change as your business changes and evolves over time (hint: the value of influence varies in both time and place).

INFLUENCEARB2Bchat
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Influence in the B2B Sector: #ARchat & #B2Bchat

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It’s hard to think of any aspect of any market sector that doesn’t involve, or revolve around, influence. Back on October 7th, Steve Loudermilk (@loudyoutloud) and I tried a novel approach to our Analyst Relations/Influence chat (#ARchat) by engaging in a joint chat session with #B2Bchat, the B2B chat hosted by Ksenia Coffman (@kseniacoffman), Jeremy Victor (@jeremyvictor), Andrew Spoeth (@andrewspoeth) & the crew at @b2bento.

During this chat, we focused on market influencers, specifically, what role can, or should, Analyst and Influencer Relations have in the B2B sector.

Tonight we’re firing it up again with the #B2Bchat team for our 2nd look at influence in the B2B sector. This time, however, we are taking an inward-looking approach regarding how firms themselves influence their market, the importance of defining an “influence strategy”, working with new influencers, and measuring a firms “influence impact” on the market.

Questions that we will discuss include:

  1. How do you presently identify your own firm’s “influence” in the market?
  2. How do you measure your firm’s influence against your competitors?
  3. Who drives your corporate market influence strategy (both customer-side and outside influencers)?
  4. What steps can be taken to improve your influence (How key is traditional marketing vs SM in these efforts)?
  5. How do you spread your influence to “new influencers” like bloggers who break news stories and analysis faster than traditional influencers?
  6. How are you thinking about your “influencing” strategy from an in-sourcing or outsourcing approach?

Please join us tonight, December 2nd at 8pm ET for this “influencing” event. We’ll be using the #B2Bchat hashtag – hope to see you there.

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The role of Influence in Analyst Relations

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I read a great piece recently by my friend Lisa Petrilli on Influence vs Empowerment. She raised some excellent points about the differences between the two and, more importantly, the effectiveness of the two. And in a pure social/commercial market, her points were dead on.

One of the more interesting notes in her post was the result of research by Steve Knox, CEO of Proctor and Gamble’s WOM Unit Tremor. They found that rather than “influencers” in any given market, there were actually “connectors” – people who linked people and ideas together (perhaps a much better, or accurate, description of influence!).

But in the world of Analysts and Analysts Relations, all too often the word “influence” is the yardstick by which people, initiatives and, ultimately corporate value, are measured: How much “influence” over a particular market, or a group of analysts or a group of [pick any category that involves at least one person who buys anything] does an individual actually have, and how can they improve that.

So with a tip of the hat to Lisa and the work of Steve Knox and the team at Tremor, I think that there are some very distinct ways that we can alter/change/improve the way that we “connect” people and ideas together with the ultimate goal of shaping (influencing) an analysts decision to recommend a product, or ultimately (and perhaps directly) a consumer’s decision to purchase a product, in favor of another vendor’s product. Ideally, this influence should be subtle enough to allow the analyst or consumer to feel that they have made the correct choice themselves, as a result of their own empowerment and selection process.

Here are a few things to think about – questions that are worth answering as we begin to consider just how much influence vs “connective ability” Analysts and Analyst Relations people actually have, and how they can improve it:

  • Can “empowerment” actually be used to shape an Analyst’s opinion of a vendor’s product?
  • Can a vendor’s Analyst Relations team go directly to an end-user, bypassing an Analyst, to both help shape an Analyst’s opinion AND drive direct sales results? And does this violate the separation of AR & Marketing?
  • Is there value in a vendor’s Analyst Relations team working directly with Marketing and Public Relations to help shape the way that a vendors customers (believers) can become connectors, and increase a vendor’s brand awareness
  • Can basic outreach techniques (blogging, speaking, etc.) be used by a vendor’s Analyst Relations team to help create a larger group of “connectors” (and thus influence) in a market?

Note: Image courtesy of the band Under the Influence of Giants self-titled album released 2006 on Island Records

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Vendor/Analyst Influence: A 3-way Street

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In any given industry, there exists a symbiotic relationship between vendors, analysts and customers. Each one is vying for their piece of nirvana: the best value for their dollar spent. In an industry, such as the IT industry, where analysts play a significant role, it is assumed that they are the “influencers” in the market, but in reality, it doesn’t always, and shouldn’t, work that way.

Earlier this year, Steve Loudermilk (@loudyoutloud) and I started the #ARchat group on Twitter to discuss issues involving the Analyst/Influencer Relations industry: essentially an open forum to discuss how vendor-based Analyst Relations (AR) professionals and Industry Analysts interact (I use the term “industry” here to differentiate from financial or other types of analysts). Through the course of the year, we’ve covered many topics that have yielded some very interesting discussions.

Throughout all of these discussions, however, I’ve been noticing a common thread involving “influence” and the fact that not everybody views the influencer:influencee relationship in the same manner. The most common mis-perspective is the traditional viewpoint that the Analyst is the market’s influencer (since their role is to be a trusted advisor to their client  – the Vendor’s consumer – by providing advice regarding technologies, trends, implementation strategies, etc. that “influence” their clients actions). However, that is an incomplete view, that leaves out the more complicated relationships with Vendors and Clients/Consumers.

In this view (Perspective A), the Analyst sits atop the influence model as the sole provider of guidance to both Consumers and Vendors. Sorry, but this just isn’t how it works. Perspective B provides a bit more clarity, demonstrating that a good Vendor “educates” an Analyst about their product capabilities, and the Analyst then provides the the appropriate advice/guidance to their Client (the Vendor’s Customer) who can then make their own choice, based on what is right for their needs (features, budget, availability, scalability, etc.). But even this viewpoint, while better, is still incomplete.


Hopefully, as shown in Perspective B, the Vendors and Analysts learn to share information in a two-way manner. But more importantly, there are, in fact, three distinct influencers in any given market, the Vendor, the Analyst AND the Client/Consumer. Perspective C shows a more complete “sphere of influence”, and how symbiotic each of the three different groups are (note here that there is a tangential sphere of influence that exists solely within the Consumer community, a great example being Trade Associations, who tend to have their own collaborative exchange and discussions about best practices when it comes to Vendor products & implementation strategies).

But the most complete picture of how a market sphere of influence works is when you take a look at Perspective D.  In this influence model, you can see that the entire market is driven by a series of multi-directional channels of communication, where each of the three players (Vendors, Analysts, Consumers) have their own way of providing influence (in the form of information, requirements, capabilities, etc.) that get communicated to the other two players in the market.

In this way, the best possible product offerings can be designed and deployed, giving each of the three participants what they need – the best value for their dollar spent. Note too that in Perspective D I have placed the Consumer at the top of the circle, since they ultimately control what is purchased, and their needs and requirements should be what ultimately influences the market.

Unfortunately, this isn’t always how the system works. And, of course, there are a series of other methods that dictate how information and requirements (and thus influence) are distributed through the group. But in the basic world of Vendors, Analysts and Customers, this sphere of influence is definitely a 3-way street with the Customer directing traffic.