Sunday, January 19, 2020

Three Critical Steps for Thought Leadership Success


It's now abundantly clear that compelling thought leadership content has become a vital component of effective marketing for most B2B companies. Numerous research studies have demonstrated that business buyers are relying on thought leadership content and that it has a significant impact on purchase decisions.

The 2020 B2B Thought Leadership Impact Study by Edelman Business Marketing and LinkedIn provides more convincing evidence that good thought leadership content has become essential for successful B2B marketing. This research involved a survey of 3,275 global business executives across a wide range of industries and company sizes.

The survey was fielded in September - October of last year, and respondents were drawn from the United States, the United Kingdom, Australia, France, Germany, India, and Singapore. Nearly 1,200 of the respondents were located in the United States.

The Edelman/LinkedIn study clearly shows the importance and value of compelling thought leadership content. For example:

  • Nearly half of the survey respondents (48%) said they spend at least one hour per week consuming thought leadership content, and 17% reported spending four hours or more per week.
  • 69% agreed that consuming thought leadership content is one of the best ways to get a sense of the caliber of an organization's thinking.
  • 48% said that thought leadership content had led them to award business to a company.
It's also clear, however, that thought leadership can be a double-edged sword. In the Edelman/LinkedIn survey, only 17% of the respondents rated the quality of the thought leadership content they consume as very good or excellent, while 28% rated the quality as mediocre or very poor. One in four of the respondents (25%) said that consuming a company's thought leadership content had directly led them not to award business to the company.
What Makes Thought Leadership Content Effective
Several research studies have identified the attributes that make thought leadership content persuasive. While the exact descriptions used in these studies vary somewhat, the research findings demonstrate that three attributes are critical.
  1. It must address a topic and provide information that is relevant and important to the target audience.
  2. It must provide information that is novel (not previously available).
  3. It must be authoritative (supported by credible evidence).
Laying the Foundation for Thought Leadership Success
Producing thought leadership content that will earn and keep the attention and respect of your target audiences is not an easy task, but there are three preliminary steps you can take to lay a sound foundation for your thought leadership effort.
Step 1:  Set high standards for your thought leadership content. Remember that thought leadership content must address subjects that are relevant and important to your target audience, it must provide novel information or insight, and it must be authoritative. Don't make compromises regarding these standards.
Step 2:  Be realistic about the volume of thought leadership content you can produce. Effective thought leadership content almost always requires original research, and original research takes time. Therefore, you need to set realistic goals for the amount of thought leadership content you will produce during any given period of time.
Step 3:  Before you start, conduct sufficient research to get a clear understanding of the "knowledge landscape" that's relevant for your business, and keep that understanding up to date. You can't identify topics that will be appropriate for thought leadership content until you know what subjects have already been addressed. To develop thought leadership content that is novel, you will usually want to avoid topics that have already been discussed. However, there are three notable exceptions to this general rule.
  • First, a broad topic may have been previously discussed, but specific aspects of the topic may not have been thoroughly covered. These particular aspects can be good subjects for thought leadership content if they are relevant and important to your customers and/or prospects.
  • Second, if a topic has not been addressed for a significant amount of time, it can be appropriate to take a fresh look at that topic.
  • And third, if a topic has already been addressed but the existing treatment is flawed or incomplete, that can be an appropriate subject for thought leadership content.
Obviously, these three steps are not all that's needed for a successful thought leadership program. You will also need to conduct any required original research, produce the thought leadership content resources, and implement activities to distribute and promote those resources. But these three preliminary steps will provide a solid foundation for an effective thought leadership effort.

Sunday, January 12, 2020

Moving Beyond Mere Sales-Marketing "Alignment"


In my last post, I discussed some of the findings of a 2019 survey about sales and marketing alignment by LeadMD and Drift. In this survey, over 90% of the respondents described their marketing and sales functions as well aligned or very well aligned. However, 60% of those respondents also reported that their company had not performed well in terms of revenue and pipeline growth.

This research also found a strong correlation between positive perceptions about the quality of sales-marketing alignment and the use of key performance indicators that are shared by marketing and sales. Ironically, the survey found that the mere existence of shared KPIs is sufficient to engender positive feelings about alignment. The survey report states, "It's critical to note that lack of achievement around these KPIs did not negatively influence alignment perceptions - the presence of the shared KPI was enough."

This finding helps explain why many companies have found it difficult to create the kind of sales-marketing relationship that will actually drive improved business outcomes. Many of the widely-touted "best practices" for improving sales-marketing alignment focus on three primary objectives:

  1. Creating a shared understanding among marketing and sales team members regarding the key elements of the company's go-to-market strategy, including the definition of the target market, the ideal customer profile, core value propositions, and customer buying processes;
  2. Establishing an agreed-upon lead management process ("who does what and when"); and
  3. Shared performance measures that collective show how well the company's revenue generation strategy and processes are performing.
These objectives are certainly important, but they aren't sufficient to create the kind of sales-marketing alignment that is needed to produce significant improvements in important business outcomes. In fact, the term "alignment" does not adequately capture the real sense of what is required. A better term for what is needed is operational integration. By operational integration, I mean that marketing and sales work as a single, cohesive team on a day-in, day-out basis, even though they are separate functions on the organizational chart.

From Alignment to Operational Integration
To move from conventional "alignment" to operational integration, sales and marketing leaders need to focus on two additional objectives.
Recognized Interdependence - The operational integration of sales and marketing requires a widespread recognition among both marketing and sales professionals that the two functions are now deeply interdependent. In other words, both marketing and sales professionals must recognize that they need each other, and that an integrated approach to revenue generation is essential for success.
Ongoing, Self-Directed Collaboration - Operational integration also requires marketing and sales professionals to work collaboratively on an ongoing basis, and this collaboration needs to occur naturally and spontaneously, at all levels of both functions, whenever and wherever it's needed. In other words, working collaboratively must become the normal way of getting things done.

How Leaders Nurture Operational Integration
Nurturing operational integration is primarily the responsibility of the chief marketing officer and the chief sales officer. The CEO must be supportive, but the CMO and the CSO must lead the effort on a day-to-day basis. In addition to implementing mechanisms designed to achieve the conventional alignment objectives, CMOs and CSOs need to take three other steps.
Reinforce the Narrative - The CMO and the CSO must constantly communicate the importance of having marketing and sales work together seamlessly - that the company's revenue generation efforts can't produce maximum results unless marketing and sales work as a cohesive team. In addition CMOs and CSOs should make it clear that informal, self-directed collaboration among marketing and sales professionals is not only acceptable, but expected. This narrative needs to be reinforced every day in some way.
Conduct Regular Sales-Marketing Forums - CMOs and CSOs should conduct joint sales-marketing forums on a regular basis. The cadence of these forums is determined by individual company needs, but they probably should occur at least monthly at most companies. The primary objective of these forums is to provide a venue for marketing and sales professionals at all levels to interact, exchange information, and discuss problems and opportunities.
Leverage Cross-Functional Teams - The CMO and the CSO should always be looking for opportunities to use cross-functional teams to deal with meaningful problems, challenges, or opportunities. Whenever possible, these teams should be composed of individuals who don't normally work together. Not only are cross-functional teams usually the best way to address major issues, they also foster the development of personal relationships that span functional and departmental boundaries.

The Bottom Line
Creating a high-performing revenue generation system is ultimately an exercise in team building. It's essential for marketing and sales professionals to have a shared understanding regarding the major elements of their company's go-to-market strategy. And they also need an agreed-upon lead management process, and a well-designed set of shared performance measures.
But these factors aren't sufficient to create the level of sales-marketing cohesiveness and coordination that are needed for high-performance revenue generation. In addition, marketing and sales leaders must nurture a "culture of collaboration" that transforms marketing and sales into a team of teams.

Image courtesy of Tatinauk via Flickr CC.

Sunday, January 5, 2020

Why Superficial Sales-Marketing Alignment Isn't Enough


Astute B2B marketing and sales professionals have long recognized the importance of having a productive relationship between marketing and sales, and many B2B companies have been working to build such relationships for more than a decade. So it's understandable that sales-marketing alignment has been a hot topic in B2B marketing and sales circles for the past several years.

Overall, there's no doubt that most companies have made at least some progress toward creating a more productive relationship between marketing and sales. It's also clear, however, that most companies still have work to do to turn their marketing and sales organizations into a cohesive, high-performing team.

A research report published late last year by LeadMD and Drift provides several important - and somewhat surprising - insights about the state of sales-marketing alignment, and about what business leaders need to do to reap the maximum benefits from a productive marketing and sales relationship.

The LeadMD Sales and Marketing Alignment Survey Benchmarking & Insights Report was based on a survey of 350 sales and marketing executives. Forty-four percent of the respondents were sales executives, 26% were marketing executives, and 30% were executives with responsibility for both functions. The respondents were drawn from several industries, and all were with companies having at least $25 million in annual revenue.

One primary objective of this study was to develop an evidence-based and actionable description of "meaningful" sales and marketing alignment. The researchers decided that alignment should be called meaningful if it is correlated with two business outcomes:

  1. Growth in revenue, wins, and lead quality over a 3-year period
  2. Pipeline health (growth and sustainability in predictable revenue)
The study report categorized survey participants as leaders or laggards in meaningful sales-marketing alignment based on how respondents answered survey questions related to these two business outcomes. The survey then identified what specific alignment actions distinguished the leaders from the laggards.

Perception Versus Reality
One remarkable finding from this survey is that perceptions about the quality of sales-marketing alignment are not strongly correlated with above-average business outcomes. Over 90% of the survey respondents said their sales and marketing functions are well aligned or very well aligned. However, 60% of those respondents also reported poor performance on the revenue growth and pipeline health outcomes.
The authors of the report attributed the positive feelings about alignment to two factors:
  1. The use of key performance indicators that are shared by sales and marketing. Ironically, the survey found that the mere existence of shared KPIs is enough - a lack of achievement around such KPIs did not negatively influence perceptions about alignment quality.
  2. Overall, the surveyed executives had positive feelings about both functions. In other words, sales and marketing leaders generally respect each other.
Keys to Meaningful Alignment
The LeadMD/Drift research identified two key attributes of companies that lead in meaningful sales-marketing alignment. First, leaders put greater emphasis than laggards on customer-focused KPIs, and they were more likely to have members of their marketing team interact directly with customers. The following table shows the differences between leaders and laggards on these issues:













The second distinguishing attribute of leaders is that they are more likely than laggards to take specific actions to foster ongoing collaboration between their marketing and sales teams, as the following table illustrates:














The Takeaway
The LeadMD/Drift study is a particularly valuable piece of research because it confirms that superficial sales-marketing alignment isn't sufficient to drive improved business performance. In my next post, I'll expand on the concepts found in this study and describe what marketing and sales leaders need to do to nurture sales-marketing alignment that is truly meaningful.

Top image courtesy of Ted Sakshaug via Flickr CC.

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Sunday, December 29, 2019

Our Most Popular Posts of 2019


This will be my last post of 2019, and I want to thank everyone who has spent some of his or her valuable time reading this blog. My goal for this blog has always been to provide content that readers will find informative, thought-provoking, and useful, and I've been immensely gratified by the attention and engagement this blog has received.

For the past several years, I've used my last post of the year to share which posts have been most widely read. For this list, I'm only considering posts that were published in 2019. I've ranked the posts based on cumulative total reads, so posts published early in the year have an advantage.

So in case you missed any of them, here are our five most popular posts for 2019:
  1. Have Marketers Fully Embraced the Growth Challenge?
  2. Both Market and Customer Expertise are Needed to Drive Growth
  3. Three Ways to Make Your Case Studies More Persuasive
  4. A Fresh Look at Millennial B2B Buyers
  5. How to Identify Revenue Growth Opportunities
Happy New Year, everyone!

Image courtesy of Republic of Korea via Flickr CC.

Sunday, December 22, 2019

Four Keys to Strong Customer Relationships


A recent report by Accenture Interactive provides several interesting insights on both the fragility of B2B seller-buyer relationships and what B2B companies need to do to strengthen long-term customer relationships. Service is the new sales was based on interviews with 748 business buyers and 1,499 B2B sellers across 10 countries and 16 industries.

All of the study respondents were directly involved in (or had oversight of) their company's buying or selling strategy or processes. About 75% of the respondents were manager-level or above, and about 25% were C-level. All the companies represented in the research had annual revenues of at least $25 million.

Accenture's report opens with some rather disconcerting statistics. The research found that 44% of B2B buyers had switched sellers in the 12 months preceding the study. The percentage was even higher among buyers who made weekly B2B purchases. Sixty-two percent of those study respondents said they had switched sellers in the previous 12 months. Another 36% of these frequent buyers said they plan to switch sellers in the coming 12 months.

When Accenture asked buyers why they had switched (or plan to switch), the three top reasons - each identified by 25% of the study respondents - were:

  • Uncompetitive pricing
  • Long lead times for delivery/fulfillment
  • Missed delivery dates
This finding indicates that business buyers are a pragmatic group, and it suggests that, before anything else, B2B sellers need to be sure they are getting the basics right.
On a more positive note, half of the buyers interviewed by Accenture said they had increased their average number of items per purchase and grown average purchase values with those sellers who met their needs and helped them succeed.
The Accenture research also sought to identify important attributes and behaviors of B2B "leaders," as compared with "laggards." The report does not provide a precise definition of "leaders" and "laggards," but it does describe how Accenture made the distinction:
"To discern the leaders from the laggards, we weighted responses to 12 questions from the sellers' survey across three key pillars of B2B transformation:  organizational strategy, activities, and infrastructure. To give a robust and accurate picture of the global state of buyer-seller relationships, greatest weighting was given to questions reflecting the objective and measurable elements of B2B sales and service."
With this "definition" in mind, here are some of the major differences between leaders and laggards that the Accenture report highlights.
Personalization - Leaders were twice as likely as laggards to track buyer behavior and more likely to make personalized offers based on "the sum of all behaviors." The Accenture study found that leaders consistently offered greater personalization at all stages of the customer journey.
Digital and Human Interactions - Laggards tended to prioritize digital sales channels over channels with a human touch. Leaders, on the other hand, emphasized interaction channels that provide a dialogue with buyers. This includes digital channels such as chatbots and traditional sales reps and call centers.
Organizational Commitment - Leaders were more likely than laggards to view customer experience as an ongoing work-in-progress rather than as a one-time effort. Seventy percent of leaders said that providing good service and experiences had been a top or high priority in their company for at least three years.
Functional Integration - Forty-eight percent of leaders said they had fully integrated marketing functions across channels, compared to only 19% of laggards. Leaders were also more likely than laggards to have partially or fully integrated their sales and marketing teams.

The Accenture report also highlighted the benefits of being in the leader category. Ninety-seven percent of the leader respondents said they had gained market share, 96% reported higher profitability, and 90% said they had won a greater share of their customers' wallets.

This research also confirmed the importance of blending digital and human-to-human interactions to build and sustain strong customer relationships.

Sunday, December 15, 2019

Think "Close and Deep" to Maximize Growth


During the Cold War, U.S. Army leaders in Europe faced a disconcerting situation. Their mission was to defend NATO member nations in the event of an attack by the Soviet-led Warsaw Pact. The problem was, U.S./NATO ground forces were greatly outnumbered. During this period, Soviet army doctrine was to throw wave after wave of forces at defenders until they were overcome, and U.S. military leaders weren't confident they could win that kind of war.

To address this problem, the U.S. Army developed a warfighting doctrine that reintroduced the idea of depth to the battlefield. Under this doctrine, U.S./NATO forces would extend the battlefield deep on the enemy's side of the front lines and attack rear-echelon forces, while simultaneously engaging front-line forces. The objective was to break up the enemy's momentum and deplete enemy forces before they can get into the main fight. The principle of fighting close and deep at the same time remains a basic tenet of U.S. Army operational doctrine.

Some of you may be wondering what this brief foray into military history has to do with revenue growth. Quite a bit, actually. To generate consistent revenue growth over an extended period of time, business and marketing leaders must design and execute their activities so as to maximize performance in the present (fighting close), while simultaneously investing in activities and capabilities that will lay the foundation for success in the future (fighting deep).

In many ways, this challenge comes down to a question of resource allocation. Regardless of company size, the available resources are rarely sufficient to enable senior business leaders to do everything they'd like to do. Therefore, resource allocation is an intrinsic part of every significant business decision, and the challenge for senior company leaders is to spend their finite resources on those activities and capabilities that will produce maximum results.

Deciding where and how to invest finite business resources has never been simple or easy, but these decisions have become more complex because today's business leaders have more options and more factors to consider then ever before. Resource allocation decisions are made even more complicated by the need to address both current and longer-term needs. As Jack Welch, the former Chairman and CEO of GE once said, "You've got to eat while you dream. You've got to deliver on short-term commitments, while you develop a long-range strategy and vision and execute it."

Fortunately, there's a good rule of thumb called the "70-20-10 rule" that business leaders can use to address the current vs. future aspect of the resource allocation challenge. The 70-20-10 rule has been used for a variety of business purposes. For example, Google has reportedly used it to manage the innovation process, and Coca Cola has reportedly used a version of the rule to guide marketing investment decisions.

Below is a brief overview of how the 70-20-10 rule can be used to guide resource allocation decisions in marketing. Keep in mind, though, that the rule can also be used for several other kinds of resource allocation decisions.

The 70%

The marketing version of the 70-20-10 rule says that about 70% of your marketing resources should be devoted to capabilities and programs with a proven track record of acceptable performance. These will include marketing channels, techniques, and technologies that your company is currently using successfully.

The 70-20-10 rule does not mean that companies should simply "keep on doing what we're already doing." It means that marketers should evaluate how well their "bread and butter" programs are performing and continue to invest in those that are delivering acceptable results.

The primary goal of these capabilities and programs is to drive incremental performance improvements in the present and over the near-term future.

The 20%

According to the 70-20-10 rule, about 20% of your marketing resources should be invested in "new" but promising capabilities and techniques. This category would typically include channels and techniques that a growing number of other companies are using successfully. In many cases, these channels and techniques will be approaching mainstream adoption.

Investments in this category are not quite as safe as those in the 70% group, but they often relate to capabilities or technologies that will become critical to your success in the near-term future.

The 10%

The remaining 10% of your marketing resources should be invested in truly new capabilities and techniques that have just emerged on the scene. Obviously, these are high-risk investments that aren't likely to produce short-term benefits.

For small and mid-size companies, the investments in this category may consist primarily of learning about the new techniques or capabilities - e.g. sending members of the marketing team to conferences or other educational events. Larger companies may also decide to launch small pilot programs to experiment with a new capability or technique.

Caveats

As with other rules of thumb, marketers should view the 70-20-10 rule as a general guide rather than a precise prescription. The specific percentages in the rule may not be appropriate for every business in every competitive situation. The benefit of the rule is that it leads marketers to give appropriate consideration to both current and future needs and thus increases the odds of successfully producing consistent revenue growth.

Image courtesy of winnifredxoxo via Flickr CC.

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Sunday, December 8, 2019

How to Identify Revenue Growth Opportunities


Driving consistent, profitable revenue growth is one of the most persistent challenges that business and marketing leaders face. The key word in that sentence is "consistent." Many companies can produce substantial revenue growth sporadically or over a short period of time. But it's exceptionally difficult to consistently generate above-average growth over the long term.

In my last post, I wrote that business and marketing leaders must perform two distinct but related tasks to maximize revenue growth:

  1. They must identify what growth opportunities are (or can be) available to them and determine which of those growth opportunities are most attractive.
  2. They must find the right balance between short-term and long-term growth opportunities.
In this post, I'll focus on how business and marketing leaders can identify growth opportunities. I'll cover balancing short-term and long-term opportunities in my next post.
Structural Sources of Growth
The first step in identifying potential growth opportunities is to understand the dynamics of revenue growth - how it happens or, more accurately, where it originates. There are, in fact, several distinct sources of growth. These structural sources of growth are not dependent on how a company is organized or the types of products or services it sells. Instead, they are based on the business and marketing strategies that a company uses to tap into each source.
This topic has been discussed in management and marketing literature for a long time. In a 1957 article for the Harvard Business Review, Igor Ansoff identified four structural sources of growth and four related types of growth strategies:
  1. Sales of existing products in existing markets (market penetration strategy)
  2. Sales of existing products in new markets (market development strategy)
  3. Sales of new products in existing markets (product development strategy)
  4. Sales of new products in new markets (diversification strategy)
In a 2004 article in the Harvard Business Review, Michael Treacy and Jim Sims identified five structural sources of growth:
  1. Continuing sales to existing customers (base retention)
  2. Sales won from the competition (market share gain)
  3. New sales in an expanding market (market positioning)
  4. Sales from expanding into related markets (adjacent market expansion)
  5. Sales from expanding into new, unrelated lines of business (diversification)
I've used both of these models when working with clients to frame our discussions about how to grow. But over the years, I've expanded on these models to create a more detailed framework of the alternative ways to generate growth. The current version of my framework is shown in the diagram at the top of this post.
This framework is a good tool for stimulating your thinking about how to grow your business and for identifying the growth opportunities that are (or can be) available to your business. When using this framework, it's important to keep several things in mind.
First, the good news is that these structural sources of growth are always present, at least to some degree. Their existence isn't dependent on the market conditions a company is facing at a particular moment in time. However, the volume of revenue that a company can obtain from each source is greatly influenced by the market and competitive environment. So the framework identifies potential sources of revenue growth, but it doesn't tell you about the relative attractiveness of those sources. To perform that evaluation, you'll need to use traditional market and competitive analysis tools and techniques.
Second, no single source of growth is likely to provide all the revenue you need to reach your growth objective.
And third, each source of growth has distinctive attributes and dynamics. So you'll need a specific strategy and game plan for each source of growth you choose to pursue.
In my next post, I'll discuss the importance of balancing short-term and long-term growth opportunities.