Thursday, December 26, 2013

Our Most Popular Posts - 2013 Edition

This will be my last post in 2013, and I want to thank everyone who has spent some of his or her valuable time reading this blog. I hope that you have found the content here to be both thought-provoking and useful.

Thanks to analytics, I can see how many times each blog post has been viewed. I thought this would be an appropriate time to share which posts have been most widely read. This ranking is based on cumulative total reads, and therefore older posts obviously have a built-in advantage.

So, in case you missed any of them, here are our five most popular posts.

Use an Importance-Performance Matrix to Get Marketing and Sales Talking - This post explains how to use an importance-performance matrix to capture the degree of agreement or disagreement between marketing and sales regarding key demand generation activities. An importance-performance matrix won't tell you how to resolve conflicts between marketing and sales, but it will identify the issues you need to address.

Why Content Marketing is the Best Way to Build the Brand - Some respected marketing industry experts have argued that content marketing has made brand marketing or "building the brand" obsolete. This post argues that building the brand is still an essential marketing objective for B2B companies and that content marketing is now the best marketing tactic to use for branding. For another perspective on the importance of brand building, see Why B2B Branding Still Matters.

Why BANT No Longer Works for Qualifying Leads - One of the most widely-used methods for qualifying B2B sales leads is known by the acronym BANT, which stands for Budget-Authority-Need-Timeline. This post argues that BANT is no longer an effective way to qualify sales leads. In a later post - Rethinking the Value of BANT (It's Not as Outdated as Some Suggest) - I revisited this topic and argued that the BANT criteria can still be useful for qualifying leads if they are used at the right times to answer the right questions.

Stop Wasting Your Time on Superficial Personalization - For over two decades, experts have urged marketers to use personalized messages to boost the effectiveness of marketing communications. The most common way to personalize a marketing message is to include specific facts about the recipient in the message - what I call explicit personalization. This post discusses the findings of two research projects which demonstrate that explicit personalization alone has become an anemic tool for improving marketing effectiveness.

It's Time to Integrate Marketing and Sales - Marketing and sales "alignment" has been a hot topic among B2B marketing and sales professionals for some time. This post argues that it may be time to move beyond mere "alignment" and actually integrate the marketing and sales functions. In a later post - Four Key Ingredients in the Marketing/Sales Integration Recipe - I discussed four critical requirements for integrating marketing and sales.

Happy New Year, everyone!

Wednesday, December 18, 2013

What the Pleasure Paradox Can Teach Us About Great Marketing

(With Christmas Day only a week away, I wanted to write a post with a holiday theme. Unfortunately, I lack the creativity to write a clever (and poetic) post based on "'Twas the Night Before Christmas" or something similar. This post does, however, make the point that marketers can achieve great success by truly serving their customers and prospects. That message fits the season. Happy Holidays!)

In life and in business, some of our most important goals are best pursued indirectly. All of us want to be happy, but the reality is, we can't achieve happiness by trying to be happy. In the disciplines of philosophy and ethics, this principle is usually called the paradox of hedonism or the pleasure paradox. The pleasure paradox is the idea that happiness can only be acquired indirectly. In his autobiography, the philosopher John Stuart Mill described this principle in the following terms:

"But I now thought that this end [happiness] was only to be attained by not making it the direct end. Those only are happy (I thought) who have their minds fixed on some object other than their own happiness . . ."

Victor Frankl described the pleasure paradox even more succinctly:

"Happiness cannot be pursued; it must ensue, and it only does so as the unintended side effect of one's personal dedication to a cause greater than oneself . . ."

Business success is obviously different from personal happiness, but variations of the pleasure paradox also exist in the world of business. In Obliquity, John Kay called one of these variations the "profit-seeking paradox," which holds that the best way for a business to maximize profits is not to seek to maximize profits.

Although they never used the term, Jim Collins and Jerry Porras described the profit-seeking paradox in their best-selling book Built to Last. Collins and Porras compared the long-term performance of several pairs of companies in the same industry. In each pair, one of the companies (the "visionary" company) had achieved exceptional long-term financial performance, while the comparison company was just average. Collins and Porras found that profit-driven companies were less profitable than companies that were driven by other goals. The authors wrote:

"Visionary companies pursue a cluster of objectives, of which making money is only one - and not necessarily the primary one. Yes, they seek profits, but they're equally guided by a core ideology - core values and sense of purpose beyond just making money. Yet paradoxically, the visionary companies make more money than the purely profit driven companies."

By now, you're probably wondering what all this has to do with marketing. Most marketers would say that the ultimate goal of marketing is to drive revenue growth. But like profit, revenue growth is a goal that is best pursued indirectly. In today's marketing environment, there is a "revenue-seeking paradox," which holds that the best way for marketers to drive revenue growth is to stop focusing directly on revenue growth as the ultimate objective.

Jay Baer captures the essence of this paradox in his best-selling book Youtility. Baer argues that the key to successful marketing is to make marketing useful to the recipient. He defines "Youtility" as "massively useful information, provided for free, that creates long-term trust and kinship between your company and your customers." The underlying message of Youtility is that you will achieve greater long-term marketing success by intentionally promoting less at the point of customer interaction - that revenue growth is a by-product of the help and usefulness you provide.

The revenue-seeking paradox runs counter to the conventional wisdom of marketing that's existed for decades. So, it's not likely that most marketers or other business leaders will rush to embrace it. But those who can put helping above selling will achieve the greatest marketing success.

Sunday, December 15, 2013

Why B2B Branding Still Matters

Most of the content that's been published recently about B2B marketing has focused on demand generation topics such as lead generation, lead nurturing, and lead qualification. This is understandable because the providers of B2B marketing automation software have been prolific at developing and publishing content resources that are centered on those topics.

B2B brand marketing or "brand building" has received considerably less recent attention from marketing industry commentators. Some respected marketing experts have even asserted that branding is no longer important for most B2B companies and that new marketing techniques have made B2B branding largely obsolete.

Recent research by CEB and McKinsey & Company reveals that branding remains critical to the success of most B2B companies and that brand building is still an essential marketing function.

In a 2013 study titled From Promotion to Emotion, CEB studied the impact of a strong brand connection on various buyer behaviors. CEB compared the behavior of high brand connection customers with no brand connection customers. High brand connection customers were those who gave brands high scores for trust, image, and industry leadership. The CEB study found that high brand connection customers were:
  • 5 times more likely to give consideration to a brand
  • 13 times more likely to purchase from a brand
  • 30 times more likely to be willing to pay a premium for a brand's products or services
Research by McKinsey has also found that strong brands create significant value for B2B firms. For example, B2B companies with strong brands generate a higher operating profit (EBIT) margin than other firms. According to McKinsey, in 2012, strong brands outperformed weak brands by 20%, up from 13% in 2011.

A strong brand is critical for B2B companies because of the role it plays in a buyer's decision to make a purchase. Most marketers tend to view B2B buying as a rational process. We usually say that business buyers make purchase decisions by following a logical, step-by-step process and move through stages that we label something like awareness, consideration, evaluation, and purchase.

It turns out, however, that B2B buying behavior is often far from rational and that emotions play just as big a role in B2B buying as they do in consumer buying. More importantly, it's now clear that the most powerful emotion in B2B buying is fear. As Gord Hotchkiss wrote in The BuyerSphere Project, "B2B buying decisions are usually driven by one emotion - fear. Specifically, B2B buying is all about minimizing fear by eliminating risk."

A strong brand alleviates some of the fear that business buyers inevitably experience (even if only subconsciously) when they're facing a major purchase decision. The power of a brand to reduce the perception of risk is captured in the old saying:  "Nobody was ever fired for buying from IBM."

The marketing techniques used for brand building have certainly changed. Traditional brand building methods and tactics are far less effective today than they once were. Business buyers are quick to tune out promotional marketing messages, so what companies need is a more effective method for building the brand and communicating the brand promise. As I argued in an earlier post, content marketing is now the best way to build the brand for most B2B companies. The tactics may have changed, but B2B branding is as important today as ever.

Sunday, December 8, 2013

Two Keys to More Effective Marketing in 2014 - How Marketing Content Must Change

With 2014 now less than a month away, most B2B marketers are well into their planning for next year. For most marketers, the ultimate question is:  What can we do to boost the effectiveness of our marketing efforts in 2014?

This is the second of two posts that are describing two key actions that marketers can take to improve marketing effectiveness in 2014. In my last post, I discussed why most B2B companies need to implement marketing automation and CRM technologies. In this post, I'll describe how marketing content needs to change in 2014.

More than nine out of ten B2B marketers now say they are using some form of content marketing, according to research by the Content Marketing Institute and MarketingProfs. The irony is that the popularity of content marketing is creating a new challenge for marketers. As more companies implement content marketing and publish more content, it's becoming more difficult to make your content stand out.

The key to content marketing success in 2014 will be to make your content useful. The concept of utilitarian marketing - marketing that is truly useful to the recipient - has gained increased attention in recent months largely due to the publication of two books - Youtility by Jay Baer, and Ctrl Alt Delete by Mitch Joel.

In Youtility, Jay Baer argues that there are only two ways for companies to break through the marketing and advertising clutter that engulfs today's consumers and business buyers. They can be amazing or they can be useful. Being amazing works, Baer says, but it is more difficult to do and provides less predictable results than being useful.

Being useful is what Baer means by "Youtility," which he defines as follows:

"Youtility is marketing upside down. Instead of marketing that's needed by companies, Youtility is marketing that's wanted by customers. Youtility is massively useful information, provided for free, that creates long-term trust and kinship between your company and your customers."

In Ctrl Alt Delete, Mitch Joel contends that what he calls utilitarianism marketing will be the "next great business disrupter." Joel describes utilitarianism marketing as follows:

"What is utilitarianism marketing? It's not about advertising, it's not about messaging, and it's not about immediate conversations. It's about providing a true value and utility:  something consumers not only would want to use - constantly and consistently - but would derive so much value from it that it would be given front-and-center attention in their lives."
 

In the CMI/MarketingProfs study mentioned earlier, 73% of B2B marketers surveyed said they are currently producing more content than they were twelve months earlier. There is every reason to think that companies will produce more content in 2014 than they did in 2013. With so much content available, potential buyers have little patience for content that doesn't provide real value and utility. If they don't see value in your content, they'll simply move on to someone else's.

There are several actions you can take to improve the effectiveness of your marketing in 2014, but nothing is more important than producing content that is truly useful to your customers and prospects.

Read Part 1 of the series here.

Sunday, December 1, 2013

Two Keys to More Effective Marketing in 2014 - Part 1

Two years ago this month, I published a post here titled Five Ways to Improve Your Marketing in 2012. With the end of 2013 now only a month away, I thought it would be a good time to revisit this topic with 2014 in mind. How much of what I wrote in 2011 is still relevant, and what would I change about (or add to) my 2011 post.

In my earlier post, I made five recommendations:
  • Develop a marketing strategy
  • Shift primary responsibility for lead generation from sales to marketing
  • Increase the number of leads you acquire via inbound marketing
  • Develop and implement a sound lead management process
  • Implement a content marketing strategy
These recommendations are as valid today as they were two years ago, although I believe that the number of B2B companies using some or all of these practices has increased substantially over the past two years.

So, what are the most critical actions that B2B marketers should take in 2014 to boost marketing performance? There are several plausible answers to this question, but I suggest that two actions stand out in importance. In this post, I'll discuss why technology has become all but essential for effective B2B marketing in 2014, and my next post will describe how marketing content must change in 2014.

Why Marketing Technology is Essential

I don't write frequently in this blog about marketing technology for a couple of reasons. First, there are many other good sources of information on that topic. In addition, the hype surrounding marketing technology can easily create the erroneous impression that technology is a "silver bullet" that will automatically improve marketing and sales performance.

It's clear, however, that marketing and technology are deeply entwined and that it's now practically impossible to build and execute effective marketing programs without the use of technology. For example, unless you're working with a very small number of prospects, it's extremely difficult and highly inefficient to run sophisticated lead nurturing programs without the right technology tools.

B2B marketing automation (aka lead management) software enables companies to execute personalized and behavior-driven lead nurturing programs. These technologies also typically enable extensive data collection regarding lead behavior and the use of automated lead scoring systems. B2B marketing automation solutions are typically integrated with CRM solutions, and this combination of technologies can significantly improve the effectiveness and efficiency of both marketing and sales efforts.

The good news is, both marketing automation solutions and CRM solutions are now widely available as hosted solutions, they are relatively easy to use, and they are affordable for most B2B companies. These factors, combined with the pressing need to improve marketing performance, have made B2B marketing automation software extremely popular. David Raab, a widely-respected marketing automation industry analyst, estimates that revenues from the sale of B2B marketing automation software will reach $750 million in 2013, and the market has been growing at about 50% per year for the past several years.

If you don't have the internal skills needed to successfully implement a marketing automation solution, you should consider working with a marketing services firm that can use these technologies to execute marketing programs on your behalf.

Marketing technology is not a panacea, but it will be essential for effective B2B marketing in 2014.

Read Part 2 of the series here.

Sunday, November 24, 2013

Is Account-Based Marketing Right for Your Business?

One of the hot topics in B2B marketing circles today is account-based marketing (ABM). ITSMA (the Information Technology Services Marketing Association) led the development of account-based marketing about a decade ago. Although it started in the technology sector, ABM is now used by many kinds of B2B companies.

ITSMA defines account-based marketing as:  "A structured approach to developing and implementing highly customized marketing campaigns to markets of one, i.e. accounts, partners, or prospects." (emphasis added) By this definition, the distinguishing characteristic of account-based marketing is that it entails the development of a unique marketing strategy and communications program for each target account.

Recently, some marketing consultants and software companies have been arguing for a broader view of account-based marketing. For example, SiriusDecisions has identified four varieties of ABM - large-account marketing, named-account marketing, industry-account marketing, and customer marketing. For a description of these four varieties of ABM, read this post at the SiriusDecisions blog.

Firms that advocate the broader view use the term account-based marketing to describe marketing programs that focus on a specific group of named accounts, but do not necessarily involve the implementation of a unique marketing program for each target account. While these programs are often based on solid marketing principles and can be very effective, they are not true account-based marketing, at least in the original sense of the concept. In this post, I'm using the term account-based marketing as it was defined by ITSMA.

It's now clear that account-based marketing can be highly effective in the right circumstances, but is ABM right for your business?

Your answer to this question largely depends on the attributes of your universe of existing and potential customers. True account-based marketing is typically used only for very high-value customers and prospects because it's expensive to execute. For example:
  • ABM requires both marketing and sales personnel to be deeply involved in the development and execution of each account plan.
  • Many of the activities involved in ABM cannot be automated because they require the exercise of human judgment.
  • Account-based marketing will usually require the development of unique marketing and sales content resources for each target account.
Because of the costs associated with account-based marketing, most companies that use ABM do so selectively. The diagram below illustrates how account value and the diversity of account needs influence which approach to marketing is most appropriate.
























The lower left corner of the diagram represents accounts (existing customers and prospects) with relatively low value and relatively homogeneous needs. A mass marketing approach (i.e. "one size fits all") is probably most appropriate for this group of accounts. Note, however, that this group represents a small part of the total universe of accounts.

The top portion of the diagram represents very high-value accounts. These are the types of accounts that are suitable for account based marketing, even when their needs are fairly homogeneous. In most companies, these accounts also represent a fairly small portion of the total account universe.

As the diagram illustrates, targeted marketing (which may, in fact, focus on a specific group or set of named accounts) is the most appropriate marketing approach to use for most accounts. As I'm using the term, targeted marketing refers to the use of customized marketing messages for market segments and buyer personas, but not for individual accounts. When targeted marketing is done correctly, it enables a company to obtain many of the benefits of account-based marketing at a significantly lower cost.

So what's the bottom line? If you're a B2B company with a few existing customers who are "too big to lose," and/or if you can identify a small number of potential customers who would provide exceptionally high value to your company, then consider implementing account-based marketing for those selected accounts, and use targeted marketing programs for the rest.

Sunday, November 17, 2013

How to Know if Your Marketing Strategy is Working

The foundation of all effective marketing efforts is a sound marketing strategy. Most marketing leaders feel fairly comfortable formulating strategy, but many find it difficult to measure how well their marketing strategy is actually working. The solution for this perennial challenge is a marketing Balanced Scorecard.

When Robert Kaplan and David Norton introduced the Balanced Scorecard in the early 1990's, they saw it as simply a better way to measure organizational performance. However, many early adopters started using the Balanced Scorecard as a tool for implementing business strategy. They recognized that if the objectives and measures included in their Balanced Scorecard were derived from their strategy, the scorecard would become an effective tool for describing the strategy in
measurable terms. Therefore, the Balanced Scorecard quickly evolved from a pure performance measurement system to a tool for managing strategy.

This is my third post about using a Balanced Scorecard to measure and manage marketing performance. In my last post, I described the four "perspectives" used in a Balanced Scorecard. In this post, I'll describe how a Balanced Scorecard can help you determine how well your marketing strategy is working.

The key to using a Balanced Scorecard to manage marketing strategy is something called a strategy map. A strategy map is essentially a set of linked strategic objectives that are organized using the four Balanced Scorecard perspectives. The diagram below depicts a high-level, generic version of a Balanced Scorecard strategy map for marketing.





Each of the rectangles in a Balanced Scorecard strategy map will contain objectives that are derived from your company's marketing strategy. In the above diagram, the rectangles contain descriptions of the kinds of objectives that would be included. For example, in the internal process perspective, one set of objectives will relate to the campaigns or programs that marketers design and execute.

In a Balanced Scorecard strategy map, the lines connecting the rectangles represent the cause-and-effect relationships that exist among your company's strategic marketing objectives. These causal relationships define the "logic" of your marketing strategy, and they tie the objectives together to create a cohesive strategy. Describing these cause-and-effect relationships is one of the most critical steps in building a sound marketing strategy, and using a strategy map forces you to make these relationships explicit and visible.

In a Balanced Scorecard strategy map, the cause-and-effect lines indicate that achieving one objective is what enables another objective to be achieved. For example, the above diagram is indicating that if a company successfully achieves its customer value proposition objectives, the company will achieve its objectives relating to customer acquisition and customer loyalty. And, if the company achieves its customer acquisition and customer loyalty objectives, it will be able to reach is revenue growth objectives.

The most powerful argument for using a Balanced Scorecard to measure and manage marketing performance is that it provides a mechanism for demonstrating and documenting how individual marketing activities fit into and support your marketing strategy, and for connecting individual marketing activities and programs to ultimate business outcomes. The objectives and measures used in the customer, internal process, and learning and growth perspectives are leading indicators of the business outcomes that define marketing success. So, by monitoring your progress toward achieving all of the objectives included in your strategy map, and by testing the validity of the cause-and effect relationships you've defined in your strategy map, you are also measuring the effectiveness of your marketing strategy.

Sunday, November 10, 2013

How a Balanced Scorecard Measures Current and Future Marketing Performance

In my last post, I argued that marketers should use a Balanced Scorecard to measure and manage marketing performance. The Balanced Scorecard was introduced by Robert Kaplan and David Norton in the early 1990's, and it's become one of the most popular and effective business management tools. In the Management Tools and Trends 2013 survey by Bain & Company, business leaders from around the world ranked the Balanced Scorecard as the fifth most widely-used management tool.

The Balanced Scorecard was created to address the deficiencies of performance management systems that rely exclusively on financial performance metrics. One of the main shortcomings of financial accounting measures is that they are lagging indicators. They measure the financial consequences of actions taken in the past, but they can't measure how today's activities will affect future performance.

To address these deficiencies, a Balanced Scorecard uses both financial and non-financial metrics, and it includes measures of both leading and lagging performance indicators. This framework enables company leaders to monitor both current performance and the factors that drive future
performance.

These capabilities make the Balanced Scorecard a powerful tool for measuring and managing marketing performance. A Balanced Scorecard measures marketing performance across four perspectives - financial, customer, internal process, and learning and growth. The financial perspective measures the current performance of the overall marketing function, while the other three perspectives measure the drivers of future performance. The diagram below shows the basic architecture of a Balanced Scorecard.







































A thorough explanation of how the Balanced Scorecard is used for marketing would require a book, not a blog post. In this post, I'll briefly describe the four perspectives of a marketing Balanced Scorecard. In my next post, I'll describe how you can use a Balanced Scorecard to measure the effectiveness of your marketing strategy.

The Four Perspectives of a Balanced Scorecard

Financial Perspective - As noted earlier, the financial perspective of a Balanced Scorecard measures the current financial performance of the marketing function. When a Balanced Scorecard is used for marketing, the ultimate financial measure is usually return on marketing investment.
This perspective will also typically include objectives and measures relating to revenue growth and the operational efficiency of the marketing function. For example, most marketing Balanced Scorecards will measure overall revenue growth. Depending on a company's growth strategy, this perspective may also contain specific objectives and measures pertaining to certain sources of revenue growth, such as growth from specific customer groups, products, or geographic market areas.

Customer Perspective - The customer perspective of a marketing Balanced Scorecard will contain a set of objectives and measures relating to customer acquisition and to customer retention, growth, and satisfaction. This perspective will also typically include objectives and measures that focus on the most important aspects of your customer value proposition. Some of the measures commonly found in this perspective include number of new customers acquired (or number of new customers of a particular type) and average deal size. The "logic" of a Balanced Scorecard is that if a company achieves the objectives included in this perspective, the company will achieve the revenue growth objectives in the financial perspective.

Internal Process Perspective - This perspective will contain objectives and measures relating to the internal activities and processes that are critical to (a) understanding your current and potential customers, and (b) communicating your value propositions to prospects and customers. Some of these processes relate to how you gather and use data from and about your customers and prospects, and some will relate to how you design and execute marketing campaigns and programs. So, for example, this perspective is where you track the performance of lead generation and lead nurturing programs. The internal process perspective will also include objectives and measures relating to the operational processes in the marketing function that affect efficiency and productivity.

Learning and Growth Perspective - The fourth and final perspective of a Balanced Scorecard is the learning and growth perspective. This perspective measures the intangible assets that your company must posses in order to perform your critical internal processes with a high level of competence. This perspective will typically contain objectives and measures relating to three types of intangible assets - human capabilities, technological capabilities, and organizational/cultural attributes.

So, how do you determine what objectives and measures should be included in a Balanced Scorecard? In my next post, I'll explain why objectives and measures should be derived from your marketing strategy. When this is done, the Balanced Scorecard becomes a powerful tool for managing your strategy and measuring its effectiveness.

Saturday, November 2, 2013

Why Marketing Needs a Balanced Scorecard

Earlier this year, ITSMA, VisionEdge Marketing, and Forrester Research surveyed marketing leaders about how they demonstrate marketing's value to the business. The survey revealed that marketers are producing more performance data than ever, but that most of the data doesn't resonate with senior company leaders. For example, the survey found that only 9% of CEO's and 6% of CFO's rely on marketing data to make business decisions.

The study authors contend that most marketing metrics don't do a good job of communicating the value of marketing for three reasons.
  • They measure marketing activities, but not important business outcomes.
  • They measure operational efficiency, but not the effectiveness of marketing.
  • They measure past performance, but they don't provide predictive insights about future outcomes.
Measuring the impact that marketing has on company revenues and profits is a critical aspect of managing marketing performance, but an effective performance management system for marketing must also perform several other functions. For example:
  • It must measure the performance of individual marketing activities and programs so that marketers can make investment and marketing mix decisions that will maximize results.
  • It must enable marketers and other business leaders to evaluate how well their company's marketing strategy is working.
  • It must support both strategic and tactical decision making.
  • It must enable marketing leaders to measure the efficiency and effectiveness of operational marketing activities and processes.
In order to perform all of these functions, a performance management system for marketing will necessarily include several types of metrics, including some of the kinds of metrics that are now being criticized. Specifically, a comprehensive marketing performance management system will include:
  • Financial and non-financial measures
  • Metrics for leading and lagging performance indicators
  • Measures that focus on the strategic impact of marketing and metrics that support tactical decision making
  • Measures of ultimate business outcomes and measures of activities, outputs, and intermediate outcomes
  • Revenue and cost metrics
To prove the value of marketing to C-level executives and manage the marketing function effectively, marketing leaders need a balanced scorecard for marketing. Since its introduction by Robert Kaplan and David Norton in the early 1990's, the balanced scorecard has become one of the most widely-used and effective tools in the business management arsenal.

In my next post, I'll describe what a balanced scorecard for marketing looks like.

Sunday, October 27, 2013

How to Build a Better Profile of Your Ideal Customer

Most readers of this blog are probably familiar with ideal customer profiles. An ideal customer profile is a description of the kinds of companies that would make the best customers for your business. The goal of creating and using an ICP is to focus your marketing and sales efforts on those prospects with the greatest likelihood of becoming good customers and to avoid wasting valuable resources on prospects that aren't a good fit.

Most companies base their ideal customer profile(s) on the characteristics of their existing customers. They first identify their "best" customers (which usually means their largest and/or most profitable customers), and then they identify what those "best" customers have in common. Most ideal customer profiles use "firmographic" attributes such as:
  • Annual revenues
  • Number of employees
  • Industry vertical
  • Location
Some companies will also include other attributes when possible, such as:
  • The "footprint" of the organization (local, regional, national, global)
  • The most relevant organizational unit or department
  • The business situation (for example, is the company in growth or decline)
While this process for creating an ideal customer profile is used by many companies, it doesn't go quite far enough. When I work with clients to develop ICP's, I ask them to consider three additional questions as we go through the process just described. Answering these questions will add depth and context to your ICP and ultimately make your ICP more insightful and useful.

Here are the three questions I add to the conventional process:
  • What kinds of companies have derived significant (i.e. above-average) value from using our product or service, and why have these companies obtained greater value?
  • What kinds of companies will be receptive to our marketing and sales efforts and thus be more likely to buy from us?
  • What kinds of companies can we acquire as customers at an acceptable cost?
Of these three questions, the first is the most important. Companies that have derived exceptional value from using your product or service are likely to be among your largest and most profitable customers. Common sense says that similar types of companies will make your best prospects.

Understanding what is driving the exceptional value may enable you to expand the definition of your ideal customer. For example, you may find that the companies deriving exceptional value are primarily found in one industry. However, when you identify why those companies are obtaining greater value, you may find that the same issue or challenge also exists in other types of organizations that you do not currently serve. So, by answering the why question, you may well uncover an entirely new group of "ideal" prospects.

Saturday, October 19, 2013

Why There's Still So Much Bad Content

In a recent article at LinkedIn, Joe Pulizzi, the Founder and Executive Director of the Content Marketing Institute, observed that most of the marketing content produced by companies is "flat out awful." He wrote, "In many cases, the content is self-serving, not useful and, maybe the worst, pointless."

Pulizzi argues that companies produce bad content for three reasons.
  • The vast majority of companies do not have a formal content strategy.
  • The content marketing efforts at most companies lack focus. Many marketers feel compelled to develop content around all of the products and services they offer. The result is often content that is too broad (and too shallow) to be effective.
  • In many companies, no one is accountable for the overall content marketing program.
I agree that the lack of strategy, focus, and/or accountability can result in "awful" marketing content. I also believe, however, that there's a more fundamental problem contributing to the continuing use of bad content.

We now know that most effective B2B marketing content is primarily educational and non-promotional. The goal of content marketing is to provide potential buyers information that is insightful, useful, and valuable, and thereby demonstrate your company's expertise, credibility, and trustworthiness.

The problem is, this approach runs counter to the basic paradigm of marketing that's existed for decades. For years, we've been trained to think that the best way to sell more stuff is to effectively promote our brand and our products or services. In the traditional paradigm of marketing, content is primarily about us - our company or our products or services.

Shifting from promotional content to content that's primarily educational and non-promotional is a difficult and counterintuitive change to make for most marketers.

In his new book, Ctrl Alt Delete, Mitch Joel provides an example that illustrates just how entrenched the traditional marketing mindset still is. Joel writes:

"Last year, I was in a business meeting when the idea for an iPhone app came up. It was a smart idea (you know, the kind of idea that you wish you had thought of). The chief marketing officer smiled during the presentation, put his hand up to ask a question, removed the glasses from his eyes and placed them on his notebook, folded his hands, leaned forward, and said, 'It's genius. . . but can we put our four key brand messages in there as well, because if we don't force people to look at them, what's the point of this app?'"

Companies are still producing "awful" content primarily because many marketers can't resist the urge to "always be promoting." Strategy, focus, and accountability are all important to building an effective content marketing program, but the starting point is adopting a different mindset about what constitutes good content and what role content plays in the marketing function.

Sunday, October 13, 2013

What Content Marketers Can Learn from French Cooking

Research shows that producing enough content is now the greatest challenge facing B2B content marketers. (B2B Content Marketing:  2013 Benchmarks, Budgets, and Trends - North America) More than producing engaging content. More than lack of budget.

The volume of content that's required to fuel effective marketing programs is growing exponentially for several reasons, including:
  • The need to make content relevant for individual buyers at every stage of the buying process
  • The short lifespan of content resources (particularly social media content)
  • The need to publish content on a frequent basis
To create enough content on a timely basis, you need an approach to content development that will  maximize the results you get from your content creation efforts. Believe it or not, B2B content marketers can boost the efficiency of content development by taking a lesson from French cooking.

In classic French cuisine, there are five mother sauces - B├ęchamel, Veloute, Espagnole, Hollandaise, and Tomate (tomato). These five mother sauces provide the foundation for virtually all the sauces used in traditional French cooking. To create other sauces, you simply add the appropriate ingredients to one of the mother sauces. For example, you make Mornay sauce by adding Gruyere and Parmesan cheese to a B├ęchamel sauce, and you make Bearnaise sauce by adding white wine, shallots, tarragon, and peppercorns to a Hollandaise sauce.

The same concept can be used to manage B2B content development. Here's how the "mother sauce" approach to content development works.

Identify Value Propositions

As with most important marketing issues, the process starts with identifying the value propositions that are essential to your company's go-to-market strategy. Value propositions describe how your products or services create value for customers, and they provide the foundation for your content marketing efforts. Most of the content resources you develop should be based on the value propositions you offer. If you work for a small or mid-size company, you should be able to identify four to eight value propositions that encompass the significant ways that your solutions create value.

Develop the "Mother" Resources

Once you have identified your critical go-to-market value propositions, the next step is to develop one or two substantial content resources for each value proposition. These core resources are the content equivalent of the mother sauces. They will usually be longer-form resources such as white papers or e-books, and they will provide a thorough description of each critical value proposition. In some cases, these mother resources may be more like "working papers" than finished content assets. For example, you may decide to create versions of your mother resources for specific industries or buyer personas, and if you do, you may never actually publish the mother resources in their original form.

Make Each Mother Resource the Matriarch of a Large Content Family

Each mother resource should provide a fertile source for many "child" content assets. For example, with a little creativity, you should be able to use a mother white paper or e-book as the basis for:
  • A full-length webinar or 2 to 3 shorter webcasts or videos
  • 2 to 3 (or more) articles for online or offline publications
  • 3 to 6 (or more) posts for your blog
  • A dozen or more social media updates (Twitter, LinkedIn, Facebook, etc.)
This approach won't eliminate all of the work relating to content development. It doesn't constitute an "Easy" button. However, it will focus your work and enable you to get the biggest possible "bang" from your content development efforts.

Image By:  Dinner Series (www.flickr.com)

Sunday, October 6, 2013

Rethinking the Value of BANT (It's Not as Outdated as Some Suggest)

Last fall, I published a post here titled Why BANT No Longer Works for Qualifying Leads. In that post, I argued rather strongly that BANT (the acronym for Budget-Authority-Need-Timeframe) is no longer an effective way to qualify sales leads because of changes in how B2B buyers make purchase decisions.

My post was neither the first nor the last discussion of BANT to appear in the blogosphere. Here are a few of the blog articles that have been published this year.
As you can tell from these titles, the weight of opinion in the blogosphere is clearly anti-BANT.

While I stand by what I wrote last fall, I also now believe that my criticisms of BANT were probably too broad and that the BANT criteria are still relevant and useful for evaluating sales leads if they're used at the right times to answer the right questions. In the typical demand generation process, there are three major points at which you need to evaluate the quality of a sales lead.

Qualification of New Leads

The first is when you initially acquire a lead, and the issue is whether the lead should be added to your nurturing program. BANT criteria have little role to play in this decision. At this stage, the only information about the lead that you're likely to have is a name, a company affiliation, and a job title. Company affiliation and job title may allow you to infer something about potential need, financial ability to purchase, and buying authority, but that's it. For this decision, the primary criteria should be that the lead is affiliated with an organization that fits your company's target market and has a job title that indicates a reasonable connection with the products or services you sell.

Identification of Sales-Ready Leads

The next point at which you need to evaluate lead quality is when you are deciding whether a lead is ready to engage with a sales rep. A modified version of BANT should be part of the criteria you use to make this decision. For example:
  • Need - A sales-ready lead will have acknowledged the existence of a need that your product or service can address.
  • Authority - A sales-ready lead will be a member of the buying group that will make the purchase decision. The lead doesn't need to be the classic "economic buyer" or have sole buying authority, but he or she should be a member of the decision-making group.
  • Timeframe - A sales-ready lead will be actively evaluating possible solutions for the recognized need. Your lead may not have a firm schedule for making a purchase decision, but he or she should have acknowledged that addressing the need has become a priority for his or her organization.
  • Budget - A lead doesn't need to have an established budget to be considered sales ready. As I wrote in my earlier post, research by DemandGen Report has shown that between 70% and 80% of business buyers evaluate potential solutions, build a business case for immediate adoption, and then obtain spending approval. However, you should be fairly confident that the prospect organization has the financial wherewithal to purchase your product or service.
Identification of Sales Opportunities

The third point at which you need to evaluate lead quality is when you are determining whether you have a legitimate sales opportunity. By sales opportunity, I mean a potential deal that has progressed far enough to be included in your revenue forecast. For this decision, the focus of lead qualification is on the prospect organization rather than on an individual "lead" within the organization, and the BANT criteria are particularly relevant. For example:
  • Need - To qualify as a sales opportunity, your sales rep should have confirmed that the prospect has a need that your product or service can address and that all members of the buying group have acknowledged the need.
  • Authority - Your sales rep should have identified and established relationships will all members of the buying group. In addition, you sales rep must understand what process will be used to make the buying decision and what role each "buyer" plays in that process.
  • Timeframe - To qualify as a sales opportunity, the buying process must have progressed to the point that the prospect is committed to making a purchase decision within a defined period of time.
  • Budget - While it is not essential to have a specific budget line item for the proposed purchase, your sales rep should have confirmed that the prospect's buying group has access to sufficient funds to make the purchase and the ability to commit those funds when the purchase decision is made.
BANT should never be the only criteria used to qualify sales leads. As noted earlier, BANT is not appropriate for qualifying early-stage leads, and it provides only some of the criteria for identifying when a lead is sales ready. However, BANT is not nearly as useless or outdated as some of us may have thought.

Sunday, September 29, 2013

Why Third-Party Content Should Be Part of Your Content Marketing Mix

Two recent research studies have caused me to rethink my views regarding the role and value of third-party content in the marketing efforts of B2B companies. I have always argued that most of the marketing content resources used by a company should be developed internally or with the assistance of outside professional content developers. Either way, the "authorship" of the content is attributed to the company or to an executive or other internal expert. With third-party content, another person or firm creates the content and is shown as the author.

The ultimate objective of content marketing is to cause potential customers to view your company as a trusted resource for valuable information and insights and as a capable and reliable business partner. To accomplish this objective, most of the content you publish should be "yours." It must communicate your company's expertise and capabilities. As a general rule, third-party content just isn't as effective for those purposes.

While I still say that companies should rely primarily on content they create, I also now believe that many companies can benefit from using third-party content on a selective basis. My reasoning is based on two recent research studies that provide important insights regarding the types of content that B2B buyers trust.

The CMO Council recently published a white paper - Better Lead Yield in the Content Marketing Field - that is based on a survey of more than 400 B2B content consumers. When survey participants were asked what types of content they most value and trust, vendor-created content came in last.

As the table below shows, survey respondents said they value and trust professional association research reports and white papers, research reports and white papers created by industry groups, customer case studies, reports and white papers written by analysts, and independent product reviews more than vendor-created content.

















The 2013 B2B Content Preferences Survey by DemandGen Report showed similar results. In this survey, B2B buyers were asked which of four types of content they give more credence to. The table below shows that vendor-branded content doesn't fare as well as third-party content.












It seems clear that potential buyers are inclined to trust third-party content more than content created by potential vendors, and B2B marketers should take advantage of this inclination. Content authored by a third-party expert and sponsored by your company can be particularly effective for persuading a potential buyer to begin a relationship with your company. This type of sponsored content can include white papers, eBooks, and research/analytical reports. It could also include a webinar sponsored by your company and presented by a third-party expert.

Content that you develop should always play the predominant role in your content marketing efforts. There are several ways to make your content more trustworthy and credible to potential buyers, and I discussed this topic in an earlier post. However, the right third-party content used in the right ways can be a powerful addition to your content marketing program.

Sunday, September 22, 2013

How to Make the Cost of Delay Visible to Your Prospects

Keeping prospects moving through the buying process is a perennial challenge for B2B marketing and sales professionals. I suspect that all of us have faced this issue in one form or another. We acquire a new lead who seems to be a good fit for our solution, and for a few weeks, she responds to our lead nurturing offers and consumes our content. Then activity just stops. Or perhaps we've made a great presentation to the buying group and delivered a compelling proposal only to be told that our prospect has decided not to move forward "at this time."

When prospects don't keep moving through the buying process, the result is longer sales cycles, stalled deals, and the dreaded "no decision." Research from several sources shows that keeping prospects moving has become a difficult job. For example:
  • In the 2013 Sales Performance Optimization survey by CSO Insights, 40% of respondents said that their sales cycles for new customers were seven months or longer. In the 2012 survey, only 33% of respondents reported sales cycles of that length. Research by SiriusDecisions, IDC, and others has also found that sales cycles are getting longer for B2B companies.
  • The CSO Insights survey also revealed that the number of no decisions is increasing. In the 2013 survey, respondents reported that 26.1% of forecast deals resulted in no decisions. That's up from only 17% of forecast deals in 2002.
Longer sales cycles, stalled deals, and "no decisions" can be caused by several factors, some of which are beyond your control. However, you can alleviate one of the primary reasons that prospects stop moving through the buying process.

Today's business buyers are incredibly busy, and like the rest of us, they spend most of their working time dealing with issues or problems that they perceive to be important and urgent. If they don't see a problem as both important and urgent, they won't give it much attention. That's why the status quo is usually your toughest competitor. In most cases, doing nothing is the easiest choice your prospect can make.

The key to breaking the grip of the status quo is convincing your prospect that the problem your product or service will solve is worth his or her time and attention. In essence, you must help your prospect answer two questions: Why is it important for me to address this problem or issue, and why should I deal with the problem or issue now?

One of the most effective ways to demonstrate the importance and urgency of a problem is to make the cost of delay visible to your prospect. That's why I include a cost of delay calculation in every ROI calculator I develop. Most ROI calculators focus on the traditional ROI metrics - the basic ROI percentage, the payback period, net present value, and possibly internal rate of return. These metrics should be included in any ROI estimate, but they won't necessarily communicate a sense of urgency to your prospect. That's what a cost of delay calculation does really well.

The basic cost of delay formula is:

Average Solution Benefits - Average Solution Costs

When calculating the cost of delay, you can use daily, weekly, or monthly average values. I typically choose the unit of measure based on the size of the benefits and cost values. The larger the values, the shorter the unit of measure.

To illustrate how the cost of delay calculation works, let's assume that your company offers marketing asset management/web-to-print solutions to corporate customers. For a particular prospect, you've determined that your solution will produce the following financial benefits during the first twelve months after the solution is fully implemented.
  • Reduction of request processing costs - $46,791
  • Increase in gross profits - $25,000
  • Reduction of obsolescence waste - $18,000
  • Reduction of materials customization costs - $16,000
  • Reduction of inventory management costs - $7,404
The annual cost of your solution is $75,000, and you will need one month to implement your solution for this prospect.

Based on these facts, the monthly cost of delay would be calculated as follows:

Monthly CoD = Average Monthly Solution Benefits - Average Monthly Solution Costs

Monthly CoD = ($113,195 / 13) - ($75,000 / 12)

Monthly CoD = $8,707.31 - $6,250.00

Monthly CoD = $2,457.31

To make the cost of delay even more compelling, I will typically include a cumulative cost of delay chart somewhere in my ROI calculator. For this example, that chart would appear as follows:













Making the cost of delay visible to your prospects won't cure all of your sales cycle problems, but it can create the sense of urgency that will keep your prospects moving through the buying process.

Saturday, September 14, 2013

Stop Wasting Your Time on Superficial Personalization

For more than two decades, experts have urged marketers to use personalized messages to boost the effectiveness of marketing communications. Many marketers have heeded this advice, and they are now using various technology tools to create personalized marketing messages in a variety of media and formats, including web pages, e-mail messages, and printed materials such as direct mail documents.

The most common way to personalize a marketing message is to include specific facts about the recipient in the message. Some examples would include the recipient's name, her job title, company affiliation, the industry in which she works, or information about a recent purchase.

The reality is, this type of explicit personalization no longer has much impact with potential buyers, largely because so many marketers are using similar personalization tactics. Two recent research projects have confirmed that explicit personalization alone has become an anemic tool for improving the effectiveness of marketing communications.

Earlier this year, the Economist Intelligence Unit (EIU) conducted two concurrent surveys sponsored by Lyris. One of the surveys was directed at consumers, and it asked survey participants about the effectiveness of various marketing channels and tactics, how they prefer to engage with brands, and what influences their purchase decisions. You can obtain an executive summary of the EIU survey report here.

The major findings from the EIU consumer survey regarding personalization include the following:
  • More than 70% of survey respondents said that the volume of personalized messages they receive has increased over the past five years.
  • Seventy percent of the respondents said that many of the personalized messages they receive are annoying because the attempts at personalization are superficial.
  • Sixty-three percent of respondents said that personalization is now so common that they have grown numb to it.
  • Only 22% of respondents said that personalized offers are more likely to meet their needs than mass market offers.
Research by the CEB Marketing Leadership Council also shows that explicit personalization has lost much of its impact. In July of this year, CEB surveyed 1,500 consumers from the United States, the United Kingdom, and Australia regarding how, why, and what they buy, and about their attitudes regarding the tactics brands use to engage them. One of the survey questions asked participants how they felt about some of the more common forms of explicit personalization. The table below shows how the survey participants responded.














The lesson here is that explicit personalization alone is not sufficient to make marketing messages more effective. The real key to improving the effectiveness of your marketing messages is to use what you know about your potential buyers to craft messages that will be more relevant and useful to those buyers. Relevance and usefulness (what Jay Baer calls "Youtility"), not mere personalization, are the real drivers of better marketing results.

This doesn't mean that you should stop personalizing marketing messages. It does mean that the personalization should be contextually appropriate (not just a gimmick) and that personalization shouldn't be the core component of your messaging strategy.

Sunday, September 8, 2013

Why You Need Customer Success Content

In my last post, I discussed why most B2B companies need content marketing programs that are specifically designed for existing customers, and I described three specific business situations that make marketing after the initial sale particularly important.

The ultimate objective of marketing to existing customers is to retain and, where possible, expand the business you do with profitable customers. The most direct and effective way to achieve this goal is to help your customers successfully implement and use your solutions. Therefore, most of the content you use with existing customers should be focused on providing information and insights that will help them maximize the value they derive from your solutions and from their relationship with your company. A number of thought leaders are beginning to call this kind of content "customer success content," and it plays a vital role in the emerging field of customer success management.

Obviously, existing customers have different content needs than prospects, but many content marketing principles are the same for both audiences. Suppose, for example, that you sell a complex product such as an enterprise software solution or some kinds of industrial equipment. In these circumstances, your new customers will likely face a significant learning curve to become proficient with your product. Most of your customers will progress through multiple stages in the process of learning how to use your product, as illustrated by the following diagram.



















We now know that when we're marketing to potential buyers, it's critical to have content resources that are specifically designed for each stage of the buying process. That's because the issues that are important to prospects change as they move through the process. The same principle applies when developing content for existing customers. The information needs of a power user are different from those of a new user, and the same content won't be equally effective for both.

Another similarity is the need to provide content in a variety of formats. For example, "how-to" content for existing customers is usually presented in written form (online help articles, answers to FAQ's, etc.). Today, many companies are using instructional videos to convey the same information and provide customers an alternative way to access the information.

Finally, while it's true that you usually need different content for prospects and existing customers, there are important exceptions. Some content that is designed for customers can be very effective with late-stage prospects. For example, a case study that provides a detailed description of how one of your customers used specific features of your product to accomplish an important business objective would be useful and valuable to other customers and to late-stage prospects.

So far in this post, I've haven't discussed the issue of using content to sell new, related, or ancillary products to an existing customer. Content can play a valuable role in expanding your relationships with existing customers, but you need to use the right approach. As with new prospects, the best approach is to start with content that focuses on the business issues that your new, related, or ancillary products can address. Once the foundation is in place, you can move to more product-focused content.

Content marketing shouldn't stop when the initial sale is closed. For many companies, marketing to existing customers is just as important as marketing to potential buyers, and content is critical to your success with both audiences.

Sunday, September 1, 2013

When Marketing to Existing Customers Really Matters

Most of the conversation about content marketing has focused on its role in acquiring new customers. For example, we often hear or read about the use of content to attract new prospects and about how content provides the "fuel" for lead nurturing programs.

What is discussed less frequently is the critical role that content plays in building and sustaining relationships with existing customers. Marketing to existing customers is part of what is often called customer lifecycle marketing, and it is also a major component of most account-based marketing strategies. Although the principle isn't new, a growing number of companies are recognizing the value of maximizing their relationships with existing customers.

This is the first of two posts that will discuss content marketing for existing customers. In this post, I'll describe three circumstances that make marketing after the initial sale particularly important. My next post will describe the type of content that helps build strong relationships with existing customers.

Creating and maintaining strong relationships with existing customers will produce major benefits for virtually all kinds of companies. Research going back to the early 1980's has shown that it's usually much more expensive to acquire a new customer than it is to retain and grow an existing customer. In most companies, existing customers account for a large percentage of total company revenues (up to 80% in some companies), and those revenues tend to be more stable than revenues from new customers. Highly satisfied customers are also more likely to recommend your company to other potential customers.

These broad benefits are important for most B2B companies, but there are three circumstances that elevate the importance of building strong customer relationships, particularly with newly-acquired customers.

When Customer Profitability Requires Multiple Purchases

In several types of businesses, most customers make multiple, relatively small purchases over time. For example, some commercial printing companies and firms that sell MRO supplies have this type of business model. From an economic perspective, software companies that provide their products on a subscription (or SaaS) basis have the same model.

In this situation, the first sale to a customer is rarely sufficient to make that customer profitable because of the marketing and sales costs that must be incurred to acquire the customer. If your company has this model, it's obviously critical to persuade newly-acquired customers to make several purchases.

When the Purchase of Ancillary Products are a Major Component of Customer Profitability

In this situation, the first sale to a customer may be sufficient to make the customer marginally profitable, but over the lifetime of the relationship, most of the profits will result from the customer's purchase of ancillary products. For example, Epson probably earned some profit when I purchased my new printer about a year ago, but they've almost certainly realized even more profits from the several ink purchases I've made over the past year.

When the Potential to Expand "Share of Wallet" is High

In some cases, your first sale to a customer may cover only a portion of the customer's actual requirements for the product or products that your company can provide. Perhaps the customer is "testing" your company or is reluctant to move all of their category spend to a single supplier. Whatever the cause, you may have the opportunity to significantly increase the revenues and profits you earn from the customer by increasing your "share of wallet," and that will require you to entice the customer to move more of its business to your company.

All three of these circumstances elevate the importance of having marketing programs for existing customers. In most cases, content marketing will be the most effective way to nurture relationships with your existing customers. In my next post, I'll describe the kind of content that you need for this purpose.

Sunday, August 25, 2013

B2B Marketers, Be Careful What You Ask For

For the past few years, B2B marketing thought leaders and practitioners have been advocating that marketing should play a larger role in the demand generation process. Proponents of this view argue that marketing should have the primary responsibility for acquiring new sales leads via inbound and outbound marketing programs and for nurturing and qualifying leads until they are ready to begin a meaningful engagement with a sales rep.

According to its advocates, this model of demand generation is more consistent with how today's business buyers learn about issues and possible solutions and make buying decisions, and it also uses a company's demand generation resources more effectively and efficiently.

While the arguments supporting this demand generation model are compelling, implementing it will constitute a major change for many B2B companies. To understand how just big the change is, we only need to look at where leads are coming from today.

The following table is based on the annual Sales Performance Optimization surveys conducted by CSO Insights and includes data from the survey results published in 2011, 2012, and 2013. The survey question asked respondents to specify what percentage of their sales leads are self-generated by sales reps, what percentage are generated by marketing, and what percentage originate from other sources. As the table shows, B2B companies are still relying on salespeople to generate almost half of all new sales leads.













 

The distribution of lead sources shown in the above table has been fairly stable now for several years. The following chart is also based on data from the Sales Performance Optimization surveys and shows the percentage of total leads generated by marketing from 2005 through 2013. As the chart shows, marketing has been producing between 24% and about 30% of total leads for the past seven years.






 
The CSO Insights data makes two important points. First, it clearly shows that B2B marketers will need to "step up their game" if they want marketing to take the lead in lead generation. They must be ready to demonstrate to senior company leaders that they have a strategy that will produce enough sales-ready leads to enable their company to achieve its revenue goals.
 
Perhaps more importantly, the CSO Insights data makes it clear that successful lead generation will require the involvement of both marketing and sales (and other business functions as well), at least for the foreseeable future. Even if marketing significantly increases its lead generation results, it is likely that, for the next few years anyway, between 40% and 50% of leads will still be produced by sales reps and other sources.

Sunday, August 18, 2013

Alice, the Red Queen, and Content Marketing

In Lewis Carroll's classic, Through the Looking Glass, the Red Queen takes Alice on a run in a forest. Alice and the Queen run very fast, but they never seem to leave the place where they started. When Alice wonders why, the Queen explains, "Now, here, you see, it takes all the running you can do, to keep in the same place."

I suspect that many marketers today feel like they're running alongside Alice and the Red Queen. The pace of change in marketing has accelerated dramatically over the past few years, and the watchword in marketing today is more - more tactics to use and master, more channels to incorporate in the marketing mix, more demanding prospects and customers, and more marketing content to create and distribute. So even if you're working as hard as possible, you can find yourself just barely keeping up with ever-increasing demands.

The "Red Queen effect" can be found in all aspects of marketing, but it's particularly potent in content marketing. Marketers are now tasked to create more marketing content than ever before, and it's not an easy job. In the B2B Content Marketing:  2013 Benchmarks, Budgets, and Trends - North America study by the Content Marketing Institute and MarketingProfs, producing enough content surpassed producing engaging content as the greatest challenge facing B2B content marketers.

The volume of content that's required to fuel effective marketing programs is growing exponentially for several reasons.

An Increased Need for Relevance

To create engagement with today's potential buyers, marketing content must be relevant to the interests and concerns of individual buyers, and it must be aligned to where the buyer is in his or her decision-making process. In the B2B world, most significant purchases will involve several buyers, and it's often necessary to develop content for each type of buyer. The need to have content for multiple types of buyers for each stage of the buying process multiplies the number of content assets that marketers must create.

The Lifespan of Content is Getting Shorter

The half life of content, particularly social media content, is shorter than ever. For example, the effective lifespan of a tweet or a Facebook or LinkedIn update is measured in hours. This means that marketers must constantly be adding new content to replace what falls off the radar screen.

Frequency Still Matters

The third reason that the need for content is exploding is that frequency indisputably drives increased results. Seth Godin recently wrote a blog post titled The curse of frequency, and he stated the principle very clearly:  "If you promote something twice to one hundred people it will lead to more sales than it you promote it once to two hundred people."

Marketers have long understood the value of frequency for traditional advertising and marketing programs. It now appears that frequency also improves the results you get from "new" marketing channels such as blogs and social media. So, with more marketing channels than ever, you need more content than ever to achieve the desired level of frequency.

Dealing with the Red Queen Effect

So, what can marketers do to combat the Red Queen effect in content marketing? I'm planning to deal with this question in a future post, but here's a sneak preview.

Start by identifying the value propositions that are essential to your company's go-to-market strategy. If you work in a small or mid-size company, you should be able to identify four to eight core value propositions.

Then, develop one or two substantial content resources for each core value proposition. By substantial, I mean longer-form resources such as white papers or e-books.

Finally, use these "base" content resources as the "parents" of multiple other pieces of content. For example, with a little creativity, you should be able to use a white paper as the basis for:
  • A full-length webinar or 2 to 3 shorter webcasts
  • 2 to 3 articles for online or offline publications
  • 3 to 6 posts for your blog
  • A dozen or more social media updates (Twitter, LinkedIn, Facebook, etc.)
This approach won't completely eliminate the Red Queen effect, but it will help make it manageable.

Image by:  Playing Futures:  Applied Nomadology (www.flickr.com)

Sunday, August 11, 2013

How to Avoid Lead Genocide

Several days ago, I came across a great blog post by Jill Konrath. If you're not familiar with Jill's work, she is a well-respected sales consultant/trainer and the author of SNAP Selling and Selling to Big Companies.

In her post, Jill describes an experience with a provider of CRM software. You can read Jill's post to get the full flavor of the experience, but I'll provide an abbreviated version.

Jill received an e-mail from the CRM provider offering an ebook on the social sales revolution. Jill registered to obtain the ebook because she was interested in the topic. She had zero interest in acquiring a new CRM solution.

Just a few minutes after downloading the ebook, Jill received an e-mail from the CRM provider suggesting a "brief 10 minute call" to answer questions and "explain how our different products and services could bring value. . ." This call would help "shorten your evaluation process" and provide "exactly the information you need to help make any comparisons or decisions."

Exactly 34 minutes after this message, Jill received a second e-mail. The second message indicated that the sales rep had been unable to reach Jill by telephone and asked Jill to "let me know if it makes sense to connect." Two minutes later, Jill received a third e-mail asking her to answer nine questions regarding her CRM environment, including what she wanted her CRM system to do for her business, how many users she would have, and what other solutions she was evaluating.

Jill's post provoked numerous comments, and many of the people who commented said they had experienced something similar. One person said that she called this kind of marketing lead genocide rather than lead generation. I've had several experiences similar to Jill's, and I suspect many of you have also.

Practices like this are the epitome of bad marketing. In some cases, these aggressive practices may be the result of an honest, but mistaken, belief that just because a prospect has downloaded one white paper or ebook or attended one webinar, he or she is actively evaluating a potential purchase and is ready for a sales-level engagement.

More often, though, these kinds of practices result from an erroneous belief by sellers that they can push or drive or advance prospects through the buying process. The reality is, prospects control the buying process, and they determine how quickly they will move through the cycle. As I wrote in an earlier post, the only way you can consistently accelerate the buying process is to eliminate the friction that slows prospects down. Anything else is, at best, wasted effort, and it will usually do more harm than good.

To avoid the kind of marketing malpractice described in Jill's post, resist the urge to treat a prospect's first interaction with your business as an invitation to begin a late-stage sales conversation. And remember that, while you can facilitate your prospects' decision-making process, they ultimately decide when and to what level they will engage with your business.

Sunday, August 4, 2013

An Inconvenient Truth About B2B Demand Generation

If you're a B2B marketer, describing the major attributes of your lead-to-revenue funnel and measuring the dynamics of your funnel are critical to understanding how well your demand generation system is performing. Funnel metrics will help provide the answers to three basic questions:
  • Volume - Are our marketing programs generating a sufficient number of raw leads (sometimes called responses or inquiries) to produce the revenues that marketing is responsible for?
  • Conversion - What percentage of leads are "converting" from each lead stage to the next across the entire lead-to-revenue cycle?
  • Velocity - How long is the overall revenue cycle? In other words, now much time does it take, on average, for an initial response or inquiry to result in a closed sale?
Many B2B companies use the Demand Waterfall model developed by SiriusDecisions to describe and measure the lead-to-revenue funnel. The graphic below shows the major stages in the Demand Waterfall and the conversion rates achieved by average B2B companies, according to SiriusDecisions. (Note:  SiriusDecisions recently revised the Demand Waterfall to add several lead stages, but the framework shown below is still widely used by B2B companies.)





















Now for the inconvenient truth. Research strongly suggests that the demand generation system in many B2B companies is horribly inefficient. Based on the conversion rates identified by SiriusDecisions, the average B2B company needs to generate 351 inquires to acquire one new customer. That equates to an overall lead-to-revenue conversion rate of only 0.3% (4.4% x 66% x 49% x 20%).

Forrester Research has found similar levels of demand generation performance. According to Forrester, the average overall lead-to-revenue conversion rate is 0.75%. What makes this issue important is that your overall lead-to-revenue conversion rate has a big impact on your company's overall cost of sales, which obviously affects company profitability.
 
The good news is that companies can significantly improve the performance of their lead-to-revenue funnel. In addition to identifying the lead conversion rates achieved by the average B2B company, SiriusDecisions has also studied the conversion rates achieved by Best Practice companies, and their research shows that Best Practice companies perform substantially better across the board. The table below shows how the higher conversion rates achieved by Best Practice companies impact lead-to-revenue funnel performance.
 
 
 











As this table shows, Best Practice companies must generate only about 70 inquiries to acquire one new customer, while average firms need five times as many. Best Practice companies also achieve an overall lead-to-revenue conversion rate of 1.4%, which is about five times higher that the rate achieved by average firms.

The performance of your lead-to-revenue funnel will tell you a great deal about the effectiveness of your marketing and sales efforts. So, if you aren't currently using funnel metrics, now would be a good time to start.