salesbrain llc b2b communications

SALESBRAIN LLC B2B COMMUNICATIONS

R. Chandrasekhar wrote this case under the supervision of Professor Dante Pirouz solely to provide material for class discussion.

The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have

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Copyright 2012, Richard Ivey School of Business Foundation

Version: 2012-02-17

In May 2010, Christophe Morin, chief pain officer of SalesBrain, a neuroscience-based marketing

research and coaching company located in San Francisco, California, had just concluded a meeting with

the marketing head of Digital Technology International (DTI), a provider of technology solutions to the

global publishing industry, based in Springville, Utah. DTI had been struggling with communicating the

core value proposition of its offerings to its customers, which were publishers of newspapers.

The end-users of DTIs offerings were businesses. Its customers were publishers of newspapers and

associated websites, which were either large news media corporations, family-owned enterprises or small

companies in the print media. Readers were not the end-users of DTIs offerings. DTI was operating in a

business to business (B2B) environment rather than in a business to consumer (B2C) environment.

COMPANY BACKGROUND DIGITAL TECHNOLOGY INTERNATIONAL

Digital Technology International (DTI) was founded in 1981 as a provider of software to daily

newspapers and magazines. At the time, desktop publishing was gaining ground among publishers who

had been working, for decades, with large machinery such as printing presses The software enabled

1

Based on personal interview July 15, 2011.

DTIs struggle is two-fold, remarked Morin.

Its frontline people are delivering messages which are technical, jargon-filled and

complex. The messages are, of course, in line with the technology-intensity of the

solutions that DTI provides. But, customers can get easily confused. They dont quickly

understand how the technology solutions being offered by DTI can help them. There is

lack of alignment between the sales messages of DTI and the needs of DTIs customers.

The second issue is that the sales messages are not consistent. Not all salespersons of DTI

are speaking the same language. The messages often fall short of a common frame of

reference among sales people themselves. There is lack of internal alignment.1

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publishers to save time, reduce costs and improve product quality. The companys focus had soon shifted

to helping publications integrate their databases into content management systems serving both offline

and online requirements.

By early 2000, DTI was delivering audience-centric web, print and mobile solution platforms to more

than 2,000 publishing companies worldwide. Its software covered not only the core needs of publishing

but also circulation, advertising and financial management. In 2006, DTI had been acquired by The

Riverside Company, a private equity firm with $2.5 billion in capital under management.

DTI had a history of technical innovations in the publishing industry. The company was at the cutting

edge of new technologies. It had not only kept pace with the rapid changes in media landscape but had

been preparing publishers for the changes that were yet to come, enabling them, in turn, to change their

business models.

One such innovation was DTI Cloud, a software-as-a-service (SaaS) platform that helped customers

generate new revenue, reduce costs, manage resources and thrive in an increasingly competitive digital

media world.2 DTI managed the software applications, servers and information technology (IT)

infrastructures that kept publishers capital investments intact in their core businesses, which enabled

publishers to focus on what they were best at gathering and publishing content. DTI offered a multi-

tenancy model in which data was not only separate but also secure from one client to another. More than

200 of DTIs customers had already switched to DTI Cloud.

Morin continued:

PUBLISHING INDUSTRY BACKGROUND

2

Since the 1990s, the print medium, consisting traditionally of newspapers and magazines, had been

increasingly fragmented worldwide. In addition to radio and television, consumers had access to a range

of online alternatives for getting news and features. News was available to consumers, almost at the

moment of generation, through the Internet, mobile devices (e.g., cellphones), social media (e.g.,

Facebook) and aggregator sites (e.g., Google News). News was also available in formats that the service

providers were able to customize to suit specific individual needs.

The fragmentation of the publishing industry helped online advertisers by offering them niche markets. It

also provided them with transparency and accountability for their advertising dollars. Advertisers could

It is evident from my interactions with its top management that DTI is facing strategic

challenges in closing new deals with its customers. DTIs customers are under pressure

to reduce their operating costs in an environment which has become extremely

competitive, particularly with new entrants like Google and Facebook taking positions

in the [news] market. Its customers are seeking help from DTI in holding on to their

existing customers and generating new streams of revenue. DTI must also facilitate their

transition towards the digital business model by transforming their IT architecture from

the traditional servers to SaaS which ensures better configurability, greater

customization and easier upgrades. It is in this context that DTI has realized that the

sales messages being delivered at its frontlines need to be changed.

Digital Technology International, Technologies, http://www.dtint.com/Technologies/ accessed September 10, 2011.



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track page views, monitor hits and gain access to customer usage patterns, which, in turn, enabled them to

better target their sales and marketing messages to the audiences that mattered.

Both readers and advertisers were turning toward digital platforms, which had led newspapers and

magazines to initiate new value propositions.

Print publishers had been creating new revenue streams by going digital. They were developing paid

online business models targeted to niche markets. Pricing innovations, on their part, included a monthly

access fee, a daily access fee, and micropayments for individual articles. Some media houses were

subsidizing their print business losses with the profits generated from other media formats to which they

were drawn with the primary view of mobilizing and monetizing their traffic. The main sources of

revenue for newspapers were advertising and circulation. Typically, these revenues comprised 80 per cent

and 20 per cent of revenue respectively. Circulation revenue consisted of subscription and newsstand

sales. Newspapers also generated revenue from online editions. Other sources of revenue included

commercial printing, electronic publishing and the selling of news generated by newspaper to other media

houses.

Direct mailers were newspapers major competitor for advertising dollars. Consisting of catalogues,

coupon packs and circulars, direct mailers were delivered directly to consumers homes on a weekly,

biweekly, or monthly basis through the medium of the post office. Their unique selling proposition was

their ability to target specific neighbourhoods, provide guaranteed delivery, eliminate duplication and

achieve nearly 100 per cent market penetration. Also competing with newspapers were dailies distributed

free of cost. Their news coverage was local, which appealed to the local audiences they addressed.

Some established newspapers responded to these challenges by publishing their own free-distribution

papers. Some acquired their own chains of direct mailers. They undertook subsidiary marketing programs

called total market coverage (TMC) and alternate distribution systems (ADS). The latter were designed to

attract advertisers with their guarantee of 100 per cent market coverage, higher than the average daily

newspapers market reach of less than 60 per cent. Adding a TMC or an ADS program helped a

newspaper to deliver its advertising to those people who were not part of its mainstream readership.

Subscriptions were usually a magazines largest source of circulation revenues. The subscription price

was approximately 40 per cent of the cover price. Newsstand sales were another important source of

circulation revenues. Subscription sales provided a stable circulation rate base while newsstand sales

generated more revenue per copy.

As a result of allegations of deceptive marketing, magazines in many parts of the world had discontinued

the practice of sweepstakes promotions, which once accounted for approximately one-third of all new

subscriptions. Magazine publishers had instead turned to using local and regional editions to boost

circulation and readership. They were also creating brand extensions. For example, a business magazine

might diversify into organizing trade shows, publishing business books, selling business information

services and custom publishing.

The advertising rates varied with each magazine and were based on the magazines average per-issue

circulation, usually stated as cost per thousand (CPM). The demand for advertising space in a magazine

was also based on reader response to products and services advertised in the magazine, the effectiveness

of the magazines space selling team and the quality of its customer service.



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The publishing business was labor-intensive. Outsourcing was common, particularly for the printing and

distribution functions.3

THREE-STEP PROCESS

SalesBrain had a three-step process in place to help B2B clients, such as DTI, get their sales messages

right.

The first step was pain research. Pain research was aimed at identifying what SalesBrain called the pain

points, which were experienced by its clients customers. Pain Research consisted of in-depth interviews

with a sample size (usually 12) of the clients leading customers. The interviews lasted about 45 minutes

each. They were recorded, transcribed and analysed for dominant pain points. This process normally took

five weeks. It was followed by an online survey involving a larger cross-section of the clients customers

(usually numbering in the hundreds). The purpose was to arrive at a typology of customers and to cluster

customers on the basis of pain points. DTI also undertook a competitor review to gain a sense of how the

clients competitors were dealing with their own customers pain points. The independent review was

conducted by DTIs own team.

The third step consisted of training. Training was aimed at using the claims to develop an appropriate

sales script for the clients front-line salespersons. Typically, the sales team would work in small group

sessions where individual salespersons would fine-tune their messages with the help of SalesBrains

coaches. This work would continue until the salespersons had perfected a script with which they were

confident and comfortable.

Morin commented:

3

Publishing and Advertising, industry survey, May 2010, Standard & Poors, http://www.netadvantage.standardand poors.

com.proxy1.lib.uwo.ca:2048/NASApp/NetAdvantage/showIndustrySurvey.do?code=pub&date=/pub_0510/pub_0510.htm;St

andard&Poors,CapitalIQ:IndustrySurveys,http://www.standardandpoors.com/products-

services/industry_surveys/en/us, accessed September 12, 2011.

The second step was claims development. Claims development was aimed at creating unique and

compelling claims about the clients products or services, which the client could then offer to its

customers. Claims development consisted of a one-day workshop in which the members of the clients

executive team interacted both with one another and with a team from SalesBrain. The objective was to

develop a set of claims that had three basic characteristics: they were easy for a DTI salesperson to

communicate, simple for the DTI customer to understand; and differentiated DTI from its competitors. At

the end of the workshop, the participants would reach a consensus on the focus of each sales claim and on

how to communicate it. Instead of being product-centric, as was the common practice in a B2B setting,

the sales message would be pain-centric. The tweak in approach, facilitated by SalesBrain, usually made a

difference to audience engagement, revenue expansion and cost performance of the clients customers.

As I get into the first step of the pain research process with DTI, I am facing a dilemma

in relation to conducting in-depth interviews with about a dozen of the leading

customers of DTI. We deploy two neuroscience-based marketing tools in a B2B

environment voice layering and facial recognition. Which of the two should we

choose for DTI? Which of them can best elicit the responses from DTIs customers?

Which of them can best analyse the responses for us at SalesBrain so that we understand



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the customers pain points? Which of them will be appropriate to the needs and

circumstances of DTI?

TRENDS IN MARKETING RESEARCH

Companies relied on marketing research for identifying a customer need, building a product or service

around that need, positioning the product or service to gain a competitive advantage and developing a

statement that clearly communicated the manner in which the product or service addressed the customer

need.

The American Marketing Association defined marketing research as follows:

Marketing research is the function that links the consumer, customer, and public to the

marketer through information information used to identify and define marketing

opportunities and problems; generate, refine, and evaluate marketing actions; monitor

marketing performance; and improve understanding of marketing as a process. Marketing

research specifies the information required to address these issues, designs the method for

collecting information, manages and implements the data collection process, analyzes,

and communicates the findings and their implications.4

Marketing research professionals had access to several traditional tools for collecting information. These

tools included not only secondary data published by private institutions (e.g., the World Bank) and

government agencies (e.g., Statistics Canada) but also primary data such as surveys, observations and

interviews (conducted by professional agencies such as AC Nielsen).

LAYERED VOICE ANALYSIS

The human voice comprises combinations of many frequencies, sorted into several groups known as

formants. The formants are duplicates of one another in different amplitudes but differ from one person to

the other. The normal range of frequencies in a male voice is between 100 hertz (Hz) and 3 kilohertz

(kHz). The female voice is typically higher and ranged between 200 Hz and 6 kHz.6

4

AmericanMarketingAssociation,DefinitionofMarketing,

http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx, accessed December 3, 2011.

5George Loewenstein, Scott Rick and Jonathan D. Cohen, Neuroeconomics, Annual Review of Psychology, 2008, 59:

64772, http://psych.annualreviews.org, accessed December 21, 2011.

6http://www.layered-voice-analysis-info.com/images/LVA_-_Technology_White_Paper.pdf Layered Voice Analysis (LVA)

Technology White Paper http://www.nemesysco.com/lva.html accessed August 18, 2011.

The evolution of marketing research was being influenced by the progress in medical technology, which

was giving rise to a range of tools based on neuroscience and psychophysical measures (see Exhibit 2).

While academic researchers had started to use brain-imaging techniques, such as functional magnetic

resonance imaging (fMRI) and electroencephalography (EEG),5 both researchers and practitioners had a

long-standing tradition of using psychophysical techniques such as biometrics. Other techniques, such as

layered voice analysis and facial action coding system, were also gaining ground. These techniques were

all being used in increasingly innovative ways by marketing research firms to offer insights on the

psychology of consumers (in a B2C environment) and employees (in a B2B environment).



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The speaking mechanism, which sets the human species apart from other living beings, is one of the most

complex biological processes. Speech involves a number of muscles moving in perfect harmony and

timing, in which the brain is the prime mover. The brain first apprehends a given situation and the

possible implications of what will be said. Then, when the person decides to speak, air is pushed upward

from the lungs into the vocal cords, causing the vocal cords to vibrate at a specific frequency to produce

sound. The vibrated air continues to flow toward the mouth where it is manipulated by the tongue, teeth

and lips to produce sound streams that are interpreted as words.

The brain monitors all these processes in three ways: it ensures that the sound emitted is the sound that

was intended, the speech is intelligible and the volume is sufficient to be heard by the intended listener.

As a result of such monitoring, every event that passes through the brain leaves a trace on the speech

flow.

The beginnings of layered voice analysis (LVA) technology lay in the recognition that by tracking the

changes in the brain activity as reflected in the voice, researchers could get a sense of the original

intention even while ignoring the specific content of what a person was saying.

The development of LVA had been preceded by systems such as the polygraph. Also known as a lie

detector, the polygraph had been used by law enforcement agencies since 1920.7

LVA utilized approximately 20 vocal parameters and thousands of mathematical processes to help a

trained interviewer read an interviewees voice by identifying such variables in the interviewees voice

as stress levels, cognitive processes and emotional reactions. LVA thus provided insight into the overall

psychological state of the subject being interviewed.8 It also showed subtle changes in stress levels when

the interviewee attempted to lie or deceive.

LVA tracked detailed interactions with a person, which could be used both in an online environment (for

an immediate analysis during an open-ended interview in real time) and offline environment (for an in-

depth analysis of pre-recorded material).9 The results were displayed both in graphic and text forms.

LVA was also able to distinguish between stress resulting from excitement and other emotional stress,

between confusion and other forms of stress, and between acceptable levels of stress and stress emanating

from attempts at deception.

7

Rebecca Kanable, The truth surrounding lie detection technology, Law Enforcement Technology Magazine, August 2010,

p. 2, http://www.officer.com, accessed August 18, 2011.

8Voice Analysis Technologies, What Will Voice Analysis Technology (VAT) Do for You? www.voiceanalysistech.com,

accessed August 18, 2011.

9Layered Voice Analysis Introduction, http://www.youtube.com/watch?v=4c6Md3TgGCE, accessed August 18, 2011.

A polygraph differed from LVA in several ways. First, the polygraph came with a bulky gear, whereas

LVA was a software program requiring a laptop and a microphone. Second, a polygraph measured

physiological stress by tracking respiratory and perspiration monitors. For example, it captured subtle

electrical charges arising from the filling up of sweat glands due to increased cognitive and emotional

activation. LVA measured psychological stress by analysing brain activity conveyed through the voice.

Third, a polygraph test asked close-ended questions, and the interviewee had to respond with a

monosyllable: yes or no. With LVA, the questions were open-ended. Fourth, although both took place in

real time, LVA took less time for data analysis and was less invasive for the interviewee than the

polygraph because the interview could also be conducted over the phone. Finally, a polygraph could only

say whether the interviewee was telling the truth or lying. LVA could discern layers of inaccuracy

between truth and lie.



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LVA was being widely used by security organizations, immigration authorities, police, military and

private investigators because of its high level of credibility.10

From the perspective of marketing communications, it was well known that what individuals said at one

point of time (e.g., as consumers, employees or vendors) did not necessarily match with their feelings at

that point of time. There was a disconnection. It prevailed even when the individual made no deliberate

attempt at deception. The major contribution of LVA was to provide quantitative data that reduced the

disconnection. LVA considered vocal cues as important inputs in drawing inferences about both positive

affective states (e.g., happiness, excitement and enjoyment) and negative affective states (e.g., anger, fear,

sadness tension, and anxiety).11

Companies specializing in analysing the recorded material did so for an average fee of $200 per hour. Ten

minutes of voice recording took approximately one hour to analyse and report.

FACIAL ACTION CODING SYSTEM

Charles Darwin was the first to note, in 1872, that the face was the primary medium through which both

primates and humans communicated their emotions to others. The face shows emotions in their raw state.

The human face contains 43 muscles, which together create approximately 5,000 unique expressions. The

expressions are generally universal although their intensity and duration often varies with culture. Most of

the expressions transcend nationality, race, gender and upbringing.

FACS categorized every facial movement, independent of intent, as an Action Unit (AU). The catalogue

thus comprised 43 AUs, each AU being anatomically separate and visually distinguishable. For example,

a wink involved the use of a single muscle; the wrinkling of the nose involved the use of two muscles;

and a smile had 19 versions, each engaging only slightly different combination of muscles.

The commercial applications of FACS included marketing research focused on measuring facial

expressions in consumers who were responding, for example, to a new product launch or a new

positioning statement. FACS was used to track real-time responses to television commercials, second by

second. It was also being used in call centres and online gaming. In addition, FACS was finding

applications in distance learning, product design, testing and usability feedback, and sales promotion.

Trained observers could identify, in addition to the AUs, larger motions of the head, such as a nod and a

shake. They could also recognize not only the positive and negative displays of emotions at the basic level

but also more complex states of mind, such as interest and confusion.

10

Voice Analysis Technologies, What Will Voice Analysis Technology (VAT) Do for You? www.voiceanalysistech.com

accessed August 18, 2011.

11William J. Mayew and Mohan Venkatachalam, The Power of Voice: Managerial Affective States and Future Firm

Performance, Journal of Finance July 2008, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1171102## accessed

August 15, 2011.

The first catalogue of human facial expressions was compiled by Dr. Paul Ekman of the University of

California and Dr. Wallace Friesen of the San Francisco School of Medicine. Their comprehensive

inventory of facial muscles and their movements, undertaken over the period 1965 to 1978, was called

Facial Action Coding System (FACS). It provided the physiological basis for emotions.



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The state of face-reading technologies was still evolving. The technologies were incomplete, and the

outcome was not yet accurate above chance levels. It was in this context that the participants sense of

comfort with the process was considered crucial. The issue of privacy was thus paramount, as indeed it

was in all other techniques of neuroscience-based marketing.

Five minutes of recording took an hour to code manually, depending on the amount of the participants

emoting and the degree of care taken with the coding, a process that could be done only by trained

professionals. The coding fee ranged from $5,000 to $50,000, depending on the requirements of the

client, the size of the sample and the amount of coding per participant, which varied depending on the

number of stimuli exposures and on the questions facially coded.

FACS analysed facial images under seven common categories of expressions: happy, sad, angry,

surprised, scared, disgusted and neutral. Some analysts viewed contempt as an emotional state, and some

looked at four different versions of happiness alone. Some examined emotional states, such as the mouth

open/closed, eyes open/shut, eyebrows raised/neutral/lowered in addition to head orientation and gaze

direction.

FACS required a personal computer and a webcam. The analysis could be done offline using videos, or

online through live analysis. The output could be shown as a bar graph or a pie chart or as a continuous

signal, depending on customer requirements.

According to Dan Hill, an authority on the role of emotions in consumer behaviour and the

founder/president of Sensory Logic, a Minneapolis-based marketing research firm specializing in FACS:

Facial coding enhances traditional research by ensuring the reliability of what subjects

are reporting. Facial coding captures a persons emotional buy-in while verbal input,

including verbal responses and ratings, best reflects the persons rationalized intellectual

alibi. When used together to gauge the degree of any target markets buy-in to a product

or service, the combination will, if in sync and positive, confirm that the target market is

on-board. But if the two sets of data conflict, then a business leader is always wiser to

make decisions based on the results of emotional responses. Thats because the rational

facts are malleable unlike peoples emotional gut reactions.12

COMPANY BACKGROUND SALESBRAIN

SalesBrain was among the first few companies to apply the principles of neuroscience-based marketing to

improve, in measurable ways, the business and communication practices in the corporate sector. It was

founded in 2003 by Patrick Renvoise and Christophe Morin who had just published a book entitled

Selling to the Old Brain, which was based on their work related to reaching the inner-most decision-

making part of the brain.13

The company had a mission of providing the benefits of the latest research in neuromarketing to

organizations using a scientific, yet simple method for reaching unsurpassed marketing, communications

and selling success. SalesBrain had a team of 12 certified trainers delivering workshops to managers

worldwide in industries like biotechnology, financial services, healthcare, retail and telecom.

12

13

Dan Hill, Emotionomics: Leveraging Emotions for Business Success, Kogan Page, Philadelphia, 2008, pages 67.

http://www.salesbrain.com, accessed November 1, 2011.



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SalesBrain had a licensing arrangement with VoicePrism, a Chicago-based firm, to access VoicePrisms

voice-layering software and services for a fee. It used VoicePrisms technologies to glean insights from

verbal communications. One of technologies was an interactive voice response (IVR) system wherein a

designated interviewee could call a 1-800 number from anywhere in the world to answer questions by

leaving verbal responses to prompts. The caller could also use the keypad to provide quantitative, closed-

end responses. The company then ran the audio files through its engines to show the interviewees various

emotions in the course of responding to each prompt.

For voice layering, SalesBrain charged $9,500 for six interviews and $18,000 for 12 interviews.

SalesBrain also had a strategic partnership with Sensory Logic, which specialized in quantifying

emotional response through the facial coding tools.

ISSUES BEFORE MORIN

The major dilemma before Morin was which medium should be used for the in-depth interviews with

about a dozen of DTIs customers. Should Morin use LVA or FACS? Which medium would better

ascertain the pain points of DTIs customers? Which medium would better meet the objectives of both

DTI and SalesBrain?

Reliability of outcomes, execution, client comfort, cost and time were the major issues that Morin needed

to keep in mind.



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Exhibit 1

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NEUROMARKETING RESEARCH TOOLS

Tool

Functional magnetic

resonance imaging

(fMRI)

Main features

A subject is exposed to stimuli in a magnetic

field and scanned to measure oxygen levels in

the brain. Functional magnetic resonance

imaging (fMRI) relies on the magnetic properties

of blood to provide images of blood flow. It

records the changing ratio of oxyhemoglobin to

deoxyhemoglobin in response to stimuli. Higher

levels of oxygen are an indication of increased

neural activity.

Electrodes are placed on the scalp to measure

electrical waves in the brain. The

electroencephalogram (EEG) provides images

of changes in electrical current and records

minute electrical signals produced by a

particular activity of the brain. Higher levels of

signals are an indication of increased neural

activity.

Biometrics measure physiological responses in

the body as a whole to the stimuli provided by

senses. The measures include galvanic skin

response, heart rate, hormone level and

respiration rate. Subjects use ready-to-wear

accessories, such as belts and hand monitors.

Eye tracking records the movements of the

retina at a rate of 30 to 60 readings per second.

It tracks what shoppers look at, how long they

look at it and whether they are distracted. It

monitors eye fixations and also eye movements

to identify not only what the viewers are paying

attention to but also what they are missing.

Layered voice analysis (LVA) utilizes 20 vocal

parameters and thousands of mathematical

processes to read an interviewees voice by

identifying variables in the voice, such as stress

levels, cognitive processes and emotional

reactions. It provides a sense of the intention

while ignoring the content.

The facial action coding system tracks 43

separate facial movements, known as action

units, independent of their intent. It analyses

facial expressions under seven common

categories to unearth emotional responses to

stimuli.

Electroencephalogram

(EEG)

Biometrics

Do

Compiled by case authors

Picturecredits:UniversityofWesternOntario,SchulichSchoolofMedicine&Dentistry;

http://commons.wikimedia.org/wiki/File:EEG_cap.jpg, accessed May 10, 2011; http://www.google.ca/search-biometric+

beltswww.neurosciencemarketing.comneurosciencemarketing.com/, accessed December 21, 2011; http://www.emotional-

engagement.com/about-foviance/partners/smi/ accessed December 22, 2011; Sensory Logic Inc.

No

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Layered Voice

Analysis (LVA)

Facial Action Coding

System

Eye tracking



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Source: SalesBrain, Vocal Pain Probes, http://www.salesbrain.com/are-you-targeting-the-top-pains/vocal-pain-probes/ accessed October 27, 2011.

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VOCAL PAIN PROBE

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Exhibit 2

Page 12

Exhibit 3

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Source: Sensory Logic Inc.

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FACIAL ACTION CODING SYSTEM

salesbrain llc b2b communications

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