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A New Class of Buyers for Industry 4.0

Godfrey
Godfrey
GodfreyGodfrey

You can’t just market to engineers anymore. The Industrial Internet of Things (lloT) is rapidly transforming the manufacturing landscape. Today’s buyer might be a machine operator, a process engineer or a VP of manufacturing. The COO still matters, but IT professionals might sit at the table, too. Everyone in the enterprise will expect something different from your company and its products. Join us for new research on how you can reach this ever-expanding crowd of 21st-century buyers.

A New Class of Buyers for Industry 4.0

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April 3, 2017
A New Class of Buyers
for Industry 4.0
Copyright ©2017 Godfrey All Rights Reserved
Design Engineer
Copyright ©2017 Godfrey All Rights Reserved@godfreyb2b #M2E2017 #marketingtoengineers
@godfreyb2b #M2E2017 #marketingtoengineers
What design engineers care about
Better
ROI
Cost
Reduction
Increased
Productivity
Copyright ©2017 Godfrey All Rights Reserved
Isolated Interconnected
Copyright ©2017 Godfrey All Rights Reserved@godfreyb2b #M2E2017 #marketingtoengineers
Design Engineer IT Decision-Maker
Copyright ©2017 Godfrey All Rights Reserved@godfreyb2b #M2E2017 #marketingtoengineers
We are forcing our way into
the factory conversations
Copyright ©2017 Godfrey All Rights Reserved@godfreyb2b #M2E2017 #marketingtoengineers
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A New Class of Buyers for Industry 4.0

Editor's Notes

  1. Good afternoon and thank you to CFE for this opportunity to be here. INTROS We’re from Godfrey, a b2b marketing agency, where we have been working for decades to understand engineers’ challenges, drivers, and preferences-- to effectively communicate with them. And we are here, at an event about marketing to engineers, to announce to you that you should spend less time marketing to engineers. Because you need to focus a new class of buyers for Industry 4.0
  2. Successfully reaching this guy is essential to B2B marketers who need to get their product integrated into a system or specified as a solution. As our clients, particularly those in the automation and controls space, began selling solutions that were engineered for a more connected industrial environment, we realized that the traditional design engineer would need to work with a new audience: IT professionals. These Industry 4.0 connected offerings would not be adopted without IT buy-in and support; they were now a part of the decision-making and buying team. This shift would greatly impact our client’s companies and marketing programs. But how? We are an insight-driven agency, so we conducted research to confirm the trends we were seeing and answer questions we had about these changing dynamics. We’re here today to present those research findings and advice for how we, as marketers, need to adapt our programs to target these new, increasingly important IT decision-makers.
  3. ALISON Let’s set the stage for how different these new buyers are the from the one we know so well and review some important things we know about the design engineer and the buying process. We’ve talked to hundreds of design engineers over the years, learning about their challenges and opportunities, all backed by a real passion for what they do. What do they care about? Traditionally, their key drivers are cost reduction (including time savings), increased productivity, resulting in better ROI. But their world is changing rapidly, as IoT is providing opportunities for companies to connect machines, mine data and develop solutions for their customers that create a real impact in terms of productivity, efficiency and intelligence. They are under pressure to perform, and to keep up with the changing technology… Along with that, the buying team is changing… Not to say, as reference: Engineers include: Machine building OEM, systems integrator, end user – implementation strategies  
  4. ALISON The typical B2B manufacturing sale traditionally involves individual components, parts, machines or maybe a system sold to design engineers or production and process engineers on the manufacturing floor. But now, in the new world of the Internet of Things, these products, machines and systems are talking to each other. What was once isolated, is now interconnected.   A reading that once lived only on an analog dial now ripples across the enterprise, allowing a level of sharing and collaboration unlike anything we’ve seen before. What we are really talking about is listening to the flow of the factory – the machines, the people, and the materials – with analytics that give us the ability to optimize and make better decisions.
  5. ALISON This shift to the Internet of Things is bringing new faces to the process. Most notably the we’re starting to see more influence from decision-makers in Information Technology (IT). For the purposes of this presentation, these decisions makers can range from CIOs, to IT Directors, to those in charge of security, hardware or software. As soon as your machine, component or system starts to share data with something else – a machine, component or system — it’s a different game with different players. So the world of the engineer, of operations in manufacturing, is being more closely examined by IT Decision-makers.
  6. ALISON In fact, one CIO told us recently in an interview for a new business opportunity, “We are forcing our way into the factory conversations.”   We thought, “Can they do that?’   They can, and they are. And as we heard in the Marketing to Engineers report by CFE this morning, 25% of all purchase decisions, not just IoT-related ones, have IT involvement. Based on our research, that number will continue to rise.
  7. ALISON And there’s good reason why IT is involved. One of the CIOs we talked recently explained it this way:   His company has 50 factories.   Each factory has at least 100 machines.   Each machine could have 100 sensors. At least. So the number of inputs he could be dealing with could, over time, number 500,000. All that data would have to be integrated, stored, secured.   If IT isn’t involved, the situation could become unmanageable very quickly.   And that’s why IT has to be involved. But their perspective, their drivers, are different than our traditional engineering audience.   (brief pause)
  8. ALISON So how many of you currently have marketing efforts focused on reaching IT decision makers? (comment on response) We recognized this need, but had nothing to base new recommendations on. So we decided it was time to take a closer look at this changing landscape. Jennifer is going to talk about how we went about answering some of our questions. 
  9. In January 2017, we partnered with AMG Research, a Pittsburgh-based global market research company specializing in industrial markets, to conduct an independent survey.  The purpose was to identify key decision-makers and roles, responsibilities and challenges related to implementing Internet of Things (IoT) initiatives within industrial and manufacturing environments. We wrote a web survey and turned to AMG to recruit the participants and gather responses.
  10. A mix of industries were surveyed, mostly based in heavy industry and manufacturing. Here is the breakdown of the participants. We had responses from 70 key executives from a mix of regions in the US.  Over half or 54% (38) had an IT Director title. The rest was divided among the C-suite, VP or Biz Director roles. And with these titles, comes experience: the participants had an average of 16 years experience CIO 17% (12), CTO 10% (7), VP 11% (8)
  11. We are going to cover key highlights of the research you need to know then share some advice on adapting your marcom efforts in response. At the end, we will let you know how you can get the full research report.  
  12. Given the many different definitions and applications of IoT, we started by asking what the Internet of Things meant to them as it relates to their business or industry.
  13. Most respondents mentioned connectivity between devices, networked machines and interconnected systems, and indicated that their whole environment would be changing but that it would present opportunities.
  14. Opportunities that one respondent described as a “Transformation to a digital enterprise, improved efficiency…improved accuracy of production estimation…and better competitiveness”
  15. Participants described it impacting they way people work together, the way solutions are developed, implemented, maintained, the value that they will deliver to their customers, how they use data to evaluate and even prevent problems. 
  16. Essentially, with IoT solutions everything would change.
  17. But what is the reality, how are they actually doing reaching the potential success from implementation of Internet of Things initiatives.  We asked, How satisfied they were with their company’s success in capitalizing on IoT’s advantages. 
  18. Only 14% (9) said they were “extremely satisfied”  34% (33) reported being “satisfied”  51% (22) said they were “moderately satisfied”  There was only one person who was not satisfied.
  19. Among those who said they were merely “satisfied,” we asked what, if anything, was holding their company back.
  20. We accepted more than one answer in these questions on the stages, so the total will add up to more than 100%. Understanding/knowledge 55% (12) Limitations 36% (8) Strategy 32% ( 7) Other: funding (23%), internal divisions/silos (14%)  The majority response, a lack of understanding within their companies, presents an opportunity for marketers, which we will talk more about later but right now Alison shares is going to share some key insights.
  21. ALISON With this survey, we confirmed two very important things. The first is that there are new roles joining the existing buying team and the second is about the way we must communicate with them in new and different ways. The new players from IT are entering in an unprecedented way and we’re going to show an illustration of how.
  22. ALISON The current buying process for a machine or a component can look like this, starting with a process engineer requesting a part, and the request moving up the chain through his line supervisor, the plant manager and the VP of manufacturing. The COO may be involved, but, in most cases, would not be. A similar process occurs with maintenance and repair. And even for new product development… In those cases, the decision criteria are tactically-based…Prod, Perf, TP In the past, when the buying team expanded,   For example … Maintenance teams were added to review ongoing maintenance requirements …   Purchasing people were added to negotiate contract details …   Environmental Health and Safety (EHS) people added to assess environmental and safety concerns.   And so on.
  23. ALISON In the IoT environment, connectivity brings a whole new cast of characters – IT decision-makers that are ADDED to the mix. But they aren’t coming in simply to review or recommend or advise. The new players bring both money and authority. Even more importantly, a whole new set of criteria are added. Like how the data will be used, stored and secured. And what we might learn about customers from that data. They will evaluate how ANY machine or even a part will generate data that the organization can use to advance their goals. These new team member’s decision criteria may differ, including issues like: Is it compatible with our systems? How will it provide data? Who will they use the data for and how will they use it? How will it fit into our existing IT infrastructure? How will we store and secure the data? How will it advance our corporate IT goals? What will it tell us about customer use and behavior? This is a pretty big shift, and a lot of new requirements.
  24. ALISON So we mentioned that the new team brings money & authority, we asked our survey participants whose budget would fund IoT initiatives …
  25. ALISON 61% of the panel members who responded said that expenses would come out of the IT budget 23% said they would come out of the operations budget … And 16% said they would be a capital investment If we assume that the owner of the funding drives the final decision, this could decrease the influence and impact of the Operations Decisions-makers. With budget comes power.
  26. ALISON So next we asked who from their companies are involved in IoT decisions and at what stage in the process?   We asked about three stages of involvement: Initiation, advocacy and approval…
  27. ALISON Again, we accepted more than one answer in these questions on the stages, so the total will add up to more than 100%. Here you can see the breakdown. The roles within Initiation and Advocacy are similar – IT Director with the largest percentage, followed by CIO, CTO and Manufacturing Operations. The IT Director changed only slightly from stage to stage and was consistently at or near the top at all three stages. Only the CIO eclipsed the IT Director in the approval stage, 40 to 39%. The CIO only becomes more important at the approval stage. Others play a role in the early stages of the process. Who initiates a project? 49% say the IT Director is involved 30% say the Chief Information Officer 26% say the Chief Technology Officer And 23% say Manufacturer operations (Engineering/Operations, this is where our traditional design engineer lives) Who advocates for it, once it’s being actively considered?   46% say the IT Director 26% say the CIO 23% say the CTO And 14% say Manufacturer Operations   And finally, who approves a project?   39% say the IT Director 40% say the Chief Information Officer 24% say the Chief Technology Officer 16% say Manufacturer operations
  28. ALISON The basic takeaway? The IT Director is the major player throughout the process.   Why does involvement at each stage matter? Because marketing messages need to be tailored not only to the person but also to the stage in the buying process.  
  29. JENNIFER Now, for the second key insight … The new IT decision-makers differ significantly from your traditional engineering team members.   They have vastly different priorities which impacts us as marketers.
  30. We know our typical engineering audience is focused on process improvements: delivering cost efficiencies, increasing operations productivity, and better ROI. 
  31. When we asked this new IT audience what their desired outcomes or goals would be for IoT implementations these were the responses: (Select more than one outcome, numbers more than 100%) Almost half, 49% (34) said improved access to customer data 47% (33) said improved operations and/or systems And 40% (28) said aligned IT initiatives with business goals Other: 37% was reduced costs, 33% increased connectivity, 29% biz model transformation, then 27% for improved uptime 
  32. So, if you’re sending your traditional marketing messages for this guy, to this guy, you will fail. These IT decision makers are being challenged to learn more about the plant floor, the operations side and how technology can support the company’s business goals. They need to maintain existing systems while driving digital transformation balancing innovation with operational efficiency. Provide increased connectivity while increasing data security.   Totally different challenges and pain points. And they are looking for help and information but in different forms and channels. 
  33. How and where to do you reach them?  We asked them where they are learning about IoT solutions, who they trust for information and types of content they prefer.
  34. Select up to 3. Top types: 50% said trade shows/industry conferences –probably referring to the educational track, but that’s still a little unexpected.  But if you combine this with the fact that Lack of Understanding was the #1 reason participants cited as a reason for not being where they want with their IoT strategies, then maybe they want to learn at shows and conferences.   46% said case studies 36% said long-form articles and white papers 30% said videos Other: blogs and webinars Then we asked the sources the turn to for IoT-related information.  53% said industry publications and websites 49%, said trade shows 41% said supplier websites and sales reps 39% said industry and professional organizations
  35. These audiences are content consumers. According to a Gartner study, they download an average of seven content pieces during the buying process. That study also cited that they want quality content that is credible and buzz-free, and they don’t like to feel that they are being sold to.
  36. ALISON But how would study participants go about choosing a partner to help them with their IOT initiatives.  We allowed them to pick up to three considerations they felt were most important in selecting a partner.
  37. ALISON Cost ranked first, with 27 responses – nearly 40% of our total group.   Reputation or experience was second at 26%.   Then security, prior success, reliability and integration followed. As far as the type of information they need to select you as a partner…   71% said content communicating overall experience 47%, industry-specific experience 39%, case studies 27% said financing And 21% said Technical White papers AND information on IT languages and compatibility
  38. ALISON Finally, they have different choices of companies they might consider as vendors. We ask if you were planning, designing and implementing an IoT project, which of the following companies would you likely consider working with? We did provide a set list of these companies, but left an option to add a company not on the list.
  39. Alison   Not surprisingly, IBM (largely familiar to the IT crowd) is right at the top with 60% of our respondents listing it. GE is second with 35% SAP third with 29% Siemens fourth with 26% As you move your way down, companies that are more familiar to operations or engineering, maybe on the plant floor, are ranking lower. So there is some work to do there, and a major opportunity to show lift with the IT audience, to be part of their decision set.   Honeywell, 24% Accenture, 18% Bosch Software, 18% Rockwell, 16% Emerson, 15% Schneider Electric, 10% Rexroth, 6% Parker, 1%
  40. ALISON Before we outline what you can do today to affect change as marketers, here is a summary of what we’ve just covered.
  41. ALISON So what does all this mean for you and your company’s marketing efforts? What you should consider to not fall behind this fast pace of change? We’ve come up with six recommendations to help you connect with and influence this new audience. We think they’ll help you take advantage of this exciting new opportunity for your marketing program.
  42. ALISON We’ve explained that this new buying process is populated by new players like the IT director or CIO. Let’s remember these people aren’t just recommenders or influencers. They are now key decision-makers. It’s their money, their initiatives and their reputation. Targeting this new audience requires a shift in marketing strategies, tied to business objectives. If your company is moving toward an offering that include IoT solutions, or making it a part of your growth plans, your marketing objectives and strategies must make that shift as well. If it’s a question of budget priorities, and you have to choose between this new audience and your existing operations audiences, you need to seriously consider marketing to these people first.  
  43. Jennifer Your traditional engineering personas – like a process engineer or VP of Manufacturing or Plant manager – may be joined by these new audiences in IT -- like the IT director, the CIO, or CTO. You’ll want and need personas for them.
  44. So you need to research this new buying dynamic as it relates to your company, learn about these new decision-makers and influencers.  As we saw, those people have much different concerns than your typical B2B industrial buyers. Need to identify what's important to them, their challenges, and pain points.  Create a new messaging and content strategy to address their needs.
  45. Alison Operations and IT come from different worlds, and are now being challenged to work together. One study cited that the COO’s relationship with the CIO is the least successful among executives, just 32% consider it strong. But that relationship can be mutually beneficial…we just have use marketing to build a bridge between the two.
  46. Try using your content strategies, your messaging, to start a conversation between the two around common goals. Example topics? Productivity. Quality. Faster time to market. Reducing downtime. Efficient operations. You can drive new revenue streams and new business models. You can reduce waste and cost, while improving quality and safety. Think Business drivers…what impacts the bottom line. Show IoT in action, to inspire innovation and new thinking around applications. Fill in this lack of understanding, especially in the early stages of the buying process. When all teams rallied around them, individual concerns like security, standards, and uptime are solved based on a different level of motivation. Talk about what problems these solutions can solve in the company’s operations. About what business value you can extract from this new data. You can also create capacity by having better real-time insights into your business flow.
  47. Which means you can't just repurpose existing content because it won’t resonate.
  48. Start building a large library of content in the multiple formats, tailored to audience concerns and topics Alison mentioned. An engineer might love to end up with a product data sheet. But an IT director? They want to know your experience. That’s hard to demonstrate on a data sheet. Broadcast regularly. Even if your company isn’t at the top of the vendor list, strong content that describes your solution and compares it to other vendors can help you break through. By the time CIOs and IT buying teams reach out to suppliers, they will be an average of 60% through the decision and will already have a good feeling of who they want to work with. Quality content can lead them to you. RobertHalf&Leadtail
  49. Alison You’ll need to rethink ROI.   Because the journey is different for these different types of buyers, you’ll need different metrics or analytics to measure your progress through the buyers journey. And you’ll need to measure ROI differently. Here’s why: you’re used to selling to OEM design engineers who will spec a device for their product designs. Or you were selling to manufacturing or process engineers who will be choosing your product for their machine or process. There’s usually a purchase at the end of the day.   But an IT director will be looking for products that will fit into their existing infrastructure. That will be compatible and integrate seamlessly across all their machines in all their locations globally.   He or she may not actually buy anything … but they could veto you on everything.   You’ll want to think carefully about what ROI means in a situation like that. Leads, for instance, might not be a relevant measurement because your product’s compatibility with a customer’s IT system may be a qualifying hurdle: receiving the IT director’s blessing might not, strictly speaking, be a lead. But not clearing that hurdle could make “leads” from other influencers irrelevant.
  50. And lastly, you need a consistent branding strategy, a solid positioning that drives all your communications. With this new audience, you'll want to elevate and explain your company’s vast experience and be aggressive in show casing. your differentiation.
  51. The traditional operations/engineering team may know your company and offer. The IT team may not know your company at all, or consider that you are a viable candidate. Even if there is an executive champion for your solution there will still be analysis and buy-in required from multiple stakeholders. If a brand is known—and trusted--at multiple levels of the organization there’s a better chance that a new provider will make it on the buyer’s short list. Your brand will need to connect with both audiences. Express value that resonates from the operations floor to the top floor. We’ve been talking about the IoT, this transformation enabled by technology. But it’s driven by people. And whether it’s a design engineer, IT director, COO or CIO,  B2b buyers want to be confident. We all want to be confident. We want to make the right decision for our companies and ourselves.   In many cases, feeling confident with a buying decision starts with trust in a strong brands. For Industry 4.0, will it be yours?
  52. Alison And there you have. Six ways to not just survive, but succeed in this emerging era of new buyers and new journeys in your space. Here are all six in case you missed one. Are there any questions?  
  53. ALISON Closing If you would like a copy of the full research report or would like to learn more about Godfrey, please visit Godfrey dot com slash engineers   We’re happy to answer any questions…
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