Sunday, December 4, 2016

The Key to Managing Customer Experience Success

Over the past few years, it's become abundantly clear that delivering outstanding experiences to existing and potential customers is critical for competitive success. There's a widespread recognition among marketers and other company leaders that customer experience has become a new basis of competition for B2B companies.

Numerous research studies have shown that company leaders now view customer experience as an important driver of revenue growth and competitive advantage. For example, in the B2B Digital Trends 2016-2017 report by Econsultancy (in association with Adobe), which was based on a survey of 1,141 B2B marketing, digital, and e-commerce professionals, respondents identified optimizing the customer experience as their most exciting opportunity in 2016 and for the next five years.

Several research studies have also clearly demonstrated that delivering great customer experiences drives superior financial performance. For example, annual research by Forrester has found a strong correlation between superior customer experience and superior revenue growth across more than a dozen industry groups.

But despite the undeniable importance of customer experience, and all of the recent attention it's received, there is compelling evidence that most B2B companies are still struggling to provide the kinds of experiences that their customers increasingly expect.

  • A recent report by Gallup stated that only 29% of B2B customers are strongly committed to the companies they do business with, which means that B2B companies are at some risk of losing 71% of their customers.
  • A 2015 survey of 1,350 B2B executives by Accenture found that only 23% of B2B companies excel at delivering great customer experiences, while the majority of B2B companies are "idling in customer experience mediocrity."
Part of the problem is that managing customer relationships is still a fragmented process in most B2B companies. In a recent survey of marketing professionals in 750 mid-size B2B companies, Gleanster Research divided the customer experience lifecycle into five stages and asked survey participants who "owned" each stage. Survey respondents said that marketing owned two stages (awareness and acquisition), sales owned two (conversion and expansion), and service owned one (retention).

The reality is, consistently providing great customer experiences is a complex, multi-faceted undertaking that involves several business functions in a company. But it's also true that if a company wants to achieve customer experience success, it must have a person (or function) who is responsible for coordinating the work involved in customer experience delivery.

In many ways, marketing is best suited to orchestrate the overall customer experience, but this will be a new type of role for most marketing leaders. To succeed, he or she must coordinate the work of several business functions that have operated more or less independently in the past.

In an earlier post, I discussed how marketing leaders can eliminate silos within the marketing function by building a team of teams. That strategy becomes essential when you need to tear down the walls that usually exist between marketing and other business functions that must work together effectively to achieve customer experience success.

Illustration courtesy of The United States Army Band via Flickr CC.

Sunday, November 27, 2016

Solving the Real-World Challenges of ABM

A few years ago, the noted behavioral economist and best-selling author Dan Ariely described big data in a rather memorable way. He said, "Big data is like teenage sex:  everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it."

With a few minor tweaks, Ariely's description of big data can be applied to account-based marketing:

  • ABM has been one of the hottest topics in the B2B marketing and sales world for the past couple of years. Virtually all B2B marketers are aware of ABM, and the odds are that most are thinking, if not actually talking, about it.
  • Most B2B companies are just beginning to learn how to do ABM. In the 2016 State of Account Based Marketing Study by SiriusDecisions, 42% of survey respondents said they had been using ABM for less than six months.
  • A large and growing number of B2B marketers claim they are doing (or planning to do) ABM. In a survey last fall by Demand Metric, 71% of respondents said they are using ABM, testing ABM, or interested in adopting ABM.
The allure of account-based marketing is easy to understand. According to research by ITSMA, most B2B marketers believe that ABM produces a higher ROI that any other approach to marketing. Users of ABM claim that it provides several important benefits. In the Demand Metric survey mentioned earlier, a majority of ABM users said that it produces increased engagement with target accounts (83%), better sales/marketing alignment (69%), better qualified prospects (66%), more pipeline opportunities (55%), and increased conversion rates (55%).

There's a great deal of hype surrounding account-based marketing, and much of it is justified. However, the hype also tends to obscure or minimize some of the real-world challenges associated with doing ABM well. Successful account-based marketing requires a sound strategy, sufficient financial resources, the right mix of human skills, appropriate technology tools, a high level of cross-functional teamwork, and a long-term commitment.

Beginning in January, I'll be devoting several posts here to the challenging - and often under-appreciated - issues that can make or break an ABM program. In these posts, I'll discuss how to select and prioritize ABM target accounts, how to identify what resources you'll need to build and sustain a successful ABM effort, how to develop the insights regarding target accounts that are required for effective ABM, and how to create the level of customized/personalized content that's needed for ABM success.

These discussions aren't designed to dissuade anyone from adopting ABM. On the contrary, my goal is to provide insights that will help companies become ABM success stories.

Illustration courtesy of Rob Lee via Flickr CC.

Sunday, November 20, 2016

The Most Effective Personalization is Invisible

Delivering outstanding experiences to existing and potential customers has become the prime strategic objective for most B2B and B2C marketers. In the 2016 Digital Trends Quarterly Intelligence Briefing by Econsultancy (in association with Adobe), surveyed marketers identified optimizing the customer experience as their most exciting opportunity.

Most marketers now recognize that the ability to personalize marketing messages and other marketing content is an essential requirement for providing great customer experiences. The authors of a 2016 report by the Economist Intelligence Unit (EIU) used a quotation from Kristin Limkau, the CMO of JPMorgan Chase, to highlight the importance that marketers place on personalization:  "Achieving personalisation at scale is the biggest and most important challenge for us to get right."

But despite the recent focus on personalized marketing, it's clear that marketers have more work to do to make it truly effective. Research has shown that many customers aren't particularly impressed by the personalization efforts they encounter. For example:

  • In a survey by Adobe, 71% of consumers said they like receiving personalized offers, but 20% reported that offers are not done well, and another 20% said that personalization efforts are too intrusive.
  • In other research by EIU, 70% of survey respondents said that many of the personalized messages they receive are annoying because the attempts at personalization are superficial, and 63% said marketing messages that use their name are so common that they have grown numb to the practice. In addition, only 22% of the respondents said that personalized offers are more likely to meet their needs than mass market offers.
Clearly, most of us want companies to provide personalized messages and content, but many of us are becoming more concerned about our privacy, and we feel that some personalization efforts are just plain creepy. When CEB recently asked a panel of nearly 400 consumers how "online ads that use details about what I have done" make them feel, almost three-quarters (73%) of the responses were negative, and almost half (49%) used synonyms for "creepy."

To avoid the "creepy" element and make personalized messages and content more engaging and effective, marketers must keep one critical principle in mind:  The most effective personalization is usually invisible. By invisible, I mean that the personalization is undetectable by the customer or prospect.

Since the early days of personalized marketing, the most common way to personalize a marketing message has been to include specific facts about the recipient in the message. Some examples would be the recipient's name, her job title, company affiliation, or information about a recent purchase. I call this practice explicit or overt personalization.

It's as if we marketers believe that the effectiveness of personalization comes from telling the customer or prospect what we know about him or her. There may have been some truth to this belief several years ago when personalization was still novel, but today, most types of overt personalization are ineffective at best, and can actually be seen as "creepy" by customers or prospects.

What our customers and prospects really want are offers, messages, and content that are relevant to their interests and needs - in other words, something that is useful or valuable. So, we marketers need to stop telling our customers and prospects what we know about them and start using that knowledge to craft marketing content that provides them real value and utility.

Image courtesy of Lisa Lowan via Flickr CC.

Sunday, November 13, 2016

If a Prospect Fits, You Must Not Quit

The most critical component of a successful account-based marketing program is focusing your marketing and sales efforts on the right target accounts. Working with the right accounts isn't the only thing you need for success, but it will be impossible to build a successful ABM program if you target the wrong accounts.

Selecting target accounts is obviously an essential step when you are initially implementing ABM, but managing your list of target accounts is an ongoing task. Over time, it's inevitable that you'll need to add companies to, and remove companies from, your target account list. To make these decisions wisely, it's important to remember what makes a company an attractive target for ABM in the first place.

Most ABM practitioners select their target accounts by identifying businesses that resemble their best existing customers, an approach that's commonly called look-alike modeling. Look-alike modeling is usually effective because it will identify companies with the attributes that make them good targets for ABM.

The following diagram depicts the factors that make a prospect organization attractive for account-based marketing. At the most basic level, attractiveness is a function of high value potential and high buying potential. In other words, does the prospect have the potential to become a large and profitable customer for your company, and is there a strong likelihood that the prospect will purchase your product or service?

As the diagram illustrates, high buying potential is a function of two factors - fit and buying interest. The underlying idea of fit is suitability. Does your product or service effectively address a need or a challenge that the prospect is likely to have, and can your company effectively market to, sell to, and serve the prospect?

The second component of high buying potential is buying interest, which refers to whether a prospect has engaged in behaviors that show an inclination to evaluate or purchase the kind of product or service that your company offers. Indicators of buying interest include direct interactions between a prospect and your company, and other behaviors - usually online - that indicate the prospect may be interested in the kind of product or service your company provides.

Fit and buying interest are both important "markers" of high buying potential, but fit is far more important for ABM purposes, and here's why.

At any given moment in time, a large majority of your most attractive prospects - those with high potential value and good fit - will not be involved in an active buying process for the kind of product or service that you offer, and won't score well on buying interest. Therefore, if you put too much emphasis on buying interest when initially selecting your ABM target accounts, you will omit prospects that you should be targeting.

The same principle applies when you're managing your list of target accounts. At any given point in time, many of the companies on your list may not show significant indications of buying interest. That may mean they're not likely to buy in the near-term future, but it doesn't mean that they are unlikely to buy in the longer term. If you remove such companies from your target account list, you'll be abandoning the opportunity to influence the perceptions and preferences of future buyers.

Successful account-based marketing requires long-term thinking and consistency. The objective is to focus your marketing and sales efforts on those prospects that are likely to become large and profitable customers. Identifying prospects with a high level of buying interest can be valuable because it enables you to use a more appropriate mix of marketing and sales tactics. But when high potential value and good fit exist, an apparent lack of immediate buying interest doesn't justify removing an account from your ABM program.

Top illustration courtesy of Jason Taellious via Flickr CC.

Sunday, November 6, 2016

Creating Content that Cultivates Consensus

It's now widely understood that most B2B purchases are made by groups of people. According to CEB, the average B2B buying group now includes 5.4 individuals. SiriusDecisions says that B2B buying groups range in size from 1-2 decision makers to 6-10 or more decision makers, depending on the dollar value of the purchase.

In virtually all cases, these buying groups must reach a consensus before a purchase will be made, and that doesn't come easily or quickly in many cases. Recent research by CEB found that B2B buying groups now typically include diverse stakeholders whose goals and interests can conflict, which can make consensus difficult to reach.

The CEB research also found that while reaching consensus decisions is hard at all stages of the buying process, the greatest challenge is getting consensus on the type of solution to acquire and implement. The second most difficult challenge is reaching a consensus on the definition of the problem that needs to be addressed.

This means that buying groups have the greatest difficulty achieving consensus during the early stages of the buying process, when they are more likely to be performing research on their own and relying on content to help them define their problem and identify possible solutions. Therefore, it's important for B2B marketers to develop content resources that will help buying groups reach a consensus on these essential issues.

Developing content that supports the consensus-building process requires a deep understanding of buyer goals and interests. To lay the foundation for creating consensus-friendly content, you will need to take three steps:

  • First, identify the relevant goals and interests of each member of the buying group.
  • Second, identify which goals and interests are shared by multiple members of the buying group.
  • And finally, identify which goals and interests are in conflict (actually or potentially).
CEB has recently argued that the use of personalized marketing messages and content can actually make it more difficult for buying groups to reach consensus decisions. I don't completely agree with this view, but it is clear that most major content resources, such as white papers, e-books, and longer videos, should contain material that supports the consensus-building process. 

For example, suppose that you are developing a white paper for a specific buyer persona. The overall objective of the paper is to describe the benefits provided by a type of technology solution. In most cases, you'll want the white paper to provide answers to two questions:
  1. How will this type of solution help me [the target persona] achieve my goals and protect my interests?
  2. How will this type of solution help my colleagues in the buying group achieve their goals and protect their interests?
Obviously, the primary focus of the white paper will be on answering Question 1. But if you also address Question 2, you can help your target buyer contribute to the consensus-building process.

Image courtesy of Daniel Orth via Flickr CC.

Sunday, October 30, 2016

Why Marketers Shouldn't Go All In on In-Market Buyers

Some providers of B2B predictive analytics solutions are describing the benefits of their technologies in rather effusive ways. Consider, for example, the following language in a content resource from a leading PA vendor:

"Imagine a world where you can find buyers early in the sales cycle and predict who your next customer will be with 85% accuracy. [XXX's] predictive intelligence engine gives you the ability to see your entire universe of potential buyers at every stage of their buying journey. We uncover net-new, in-market prospects based on powerful data science and billions of time-sensitive intent interactions."

This is heady stuff because the ability to know which prospects are engaged in an active buying process could enable fundamental changes in the practice of B2B marketing. For example, suppose that your company uses account-based marketing. With predictive analytics, you could select ABM target accounts based on both fit (how closely a prospect resembles your best existing customers) and interest (whether a prospect is "in-market"). You could also use your PA solution to frequently update your list of target accounts, so that you have a near real-time view of which accounts are engaged in an active buying process.

This sounds like marketing nirvana, right? When you know which of your prospects are actively in-market, you can focus your marketing programs on this "low-hanging fruit," which should result in higher conversion rates, greater marketing efficiency, and lower customer acquisition costs.

There Be Dragons Here

Focusing marketing efforts on in-market prospects has undeniable benefits, but this strategy also carries some less obvious hazards. If taken to the extreme, it can lead marketers to ignore prospects who don't make the "in-market" cut. This is a dangerous approach because of changes in how business decision makers consume information.

A B2B buying process usually begins when a company's leaders or managers recognize a need or a problem, and decide to do something about it. These "buyers" then gather information about the need or problem, evaluate possible solutions, and may or may not decide to buy a product or service to address the problem or need.

So, our traditional view of buyer behavior is that most information gathering and learning occurs after an intentional buying process is underway. Today, however, information is so readily available that many business leaders and managers routinely consume information about business issues long before they've formed anything close to "buying intent." I've used the term casual learning to describe learning and information-gathering activities that occur before an intentional buying process has started, and it's clear that this type of "low-intensity" learning is becoming more and more prevalent.

What marketers need to remember is that casual learners will form impressions and embryonic preferences based on the content they consume, and that those impressions and preferences will remain influential when they get involved in an actual buying process. Therefore, marketing to casual learners is important, even though most casual learners probably shouldn't be characterized as "in-market."

As predictive analytics solutions get better and better at identifying companies that are in an active buying process, it will be very tempting for marketers to focus more and more of their marketing efforts on active buyers. That's not a bad strategy, so long as you remember that you must continue marketing to prospects who aren't currently "in-market."

There's nothing wrong with harvesting the low-hanging fruit, so long as you continue to tend the immature fruit that's higher on the tree.

Illustration courtesy of Andreas Fischler via Flickr CC.

Sunday, October 23, 2016

The Unfinished Business of Marketing-Sales Alignment

A little over six years ago, I published a blog post that discussed the need for a more collaborative relationship between marketing and sales. Since 2010, I've written about various aspects of marketing-sales alignment 22 times.

I certainly wasn't the first person to discuss the disconnect that frequently exists between marketing and sales or the need for better marketing-sales alignment. For example, the July-August 2006 issue of the Harvard Business Review contained an article by Philip Kotler, Neil Rackham, and Suj Krishnasvamy titled "Ending the War Between Sales and Marketing."

For at least the past decade, both B2B marketing and sales professionals have recognized the importance of forging a closer relationship between marketing and sales. Over the past ten years, many B2B companies have made marketing-sales alignment an important business priority, and some companies have made significant progress in improving the quality of this critical relationship.

Despite the gains, however, two research studies from earlier this year clearly show that marketing-sales alignment is still a work-in-progress for many companies.

The CallidusCloud Research

The 2016 Sales and Marketing Sentiment Study by CallidusCloud was based on a survey of B2B marketing and sales professionals that produced 227 responses. The responses were nearly evenly split between marketers and sales pros. Sixty-two percent of the respondents were based in North America, and 22.7% were based in Europe.

Over two-thirds of the respondents (67.1%) said their company's sales and marketing teams are fully or somewhat aligned. In the 2015 edition of this survey, 71.9% of respondents reported full or partial alignment.

This research also found that both marketers and sales pros are less satisfied with their counterpart's performance in 2016 than they were in 2015. CallidusCloud asked survey participants this question:  "How satisfied are you in the performance of marketing (if you're in sales) or of sales (if you're in marketing)?" In 2016, 26.7% of all respondents said very satisfied or satisfied, down from 38.7% of respondents in 2015.

The CallidusCloud research pointed to several factors that may be making alignment more difficult to achieve. For example:

  • Only 29.8% of respondents said that lead data is fully shared between sales and marketing.
  • 41.9% of respondents said their company uses separate technology solutions to manage marketing and sales. Only 28.3% said their company uses a single integrated technology solution.
The Marketing Advisory Network Research

The 2016 B2B Sales & Marketing Collaboration Study by The Marketing Advisory Network was based on a survey of business, marketing, and sales professionals that produced 123 responses. More than 95% of the respondents were with B2B or hybrid B2B/B2C companies. This study also found several areas of "misalignment" between marketing and sales. For example:
  • 50% of sales respondents (but less than 20% of marketing respondents) said that sales follows up with 95% or more of the leads supplied by marketing.
  • Over 50% of sales respondents (but less than 20% of marketing respondents) said that sales reps regularly use virtually all of the sales assets and tools that their company makes available.

One reason that many companies are still struggling with marketing-sales alignment is that the two functions are still managed separately. I've long argued that optimizing demand generation in today's business environment requires the integration of marketing and sales for operational management and planning purposes. For an in-depth discussion of why such integration is needed, take a look at my earlier post titled Why Marketing-Sales "Alignment" Is No Longer Enough.

Image courtesy of Steven Guzzardi via Flickr CC.