Sunday, September 15, 2019

B2B Highlights From the August CMO Survey

The findings of the August edition of The CMO Survey by Duke University's Fuqua School of Business, the American Marketing Association, and Deloitte were published a few days ago. The latest results are based on responses from 341 marketing leaders at U.S. B2B and B2C companies. Sixty-four percent of the respondents were affiliated with B2B companies, and 95% were VP-level or above.

The CMO Survey is conducted semi-annually, and it's a valuable resource for capturing the views of U.S. marketing leaders about the overall economic and competitive environment, and about major trends in marketing. In addition to overall results, survey findings are reported by four economic sectors - B2B product companies, B2B services companies, B2C product companies, and B2C services companies.

In this post, I'll review a few of the major findings in the August 2019 edition of the survey. Unless otherwise indicated, the results discussed in this post are based exclusively on the responses of B2B marketers.

Marketing Spending

On average, marketing expenses amount to 9.8% of total company revenues across all survey respondents, up from 7.3% in the August 2018 survey. The percentages were slightly lower for B2B companies - 8.6% for B2B product companies, and 8.7% for B2B services companies.

Survey respondents were optimistic about the growth of marketing budgets in the near-term future. On average, respondents from B2B product companies expect their marketing budgets to increase by 7.1% in the next 12 months. For B2B services companies, the average expected increase is 10.1%.

Paid Media Spending Allocation

The survey asked participants to indicate how their spending on paid media is allocated across seven specific channels and a "Paid Other" category. The following table shows the mean allocation for respondents from B2B product companies and B2B services companies:

What stands out to me in these findings is the size of the "Paid Other" category. B2B product companies are devoting nearly 40% of their total paid media spending to the "other" category, while B2B services companies are devoting nearly half of their spending to that category. According to the survey report, when participants were asked to clarify which "Paid Other" media they meant, the respondents most frequently identified trade shows, sponsorships, and direct mail.

Social Media Marketing

One of the more fascinating topics addressed by The CMO Survey is social media marketing. For the past several years, survey respondents have been consistently predicting that their spending on social media marketing will increase substantially. In the latest survey, respondents from B2B product companies predicted that their social media spending will more than double in five years. Respondents from B2B services companies predicted a spending increase of about 83% in five years.

Survey respondents have also consistently said that the use of social media is not making a significant contribution to company performance. The survey has been asking participants to rate the contribution of social media marketing on a seven-point scale, where 1=not at all, and 7=very highly.

In the latest survey, the mean overall score was only 3.3, and that score has remained almost unchanged since 2016. Among respondents from B2B product companies, the mean score was just 3.05, and for respondents from B2B services companies, the mean score was 3.48.

On the face of it, these results don't seem to be logical. Why would marketing leaders substantially increase spending on an activity that is not making a significant contribution to company performance?

One possibility is that actual spending on social media marketing has not increased as rapidly as survey respondents were forecasting. An analysis in an earlier edition of the survey indicates that this has been true in the recent past, and I think it's likely still true today. Therefore, I would argue that spending on social media marketing will not increase as rapidly or by as much as respondents in the August survey have predicted.

Top image source:  The CMO Survey (

Sunday, September 8, 2019

How to Address the Marketing Measurement Paradox

One of the marketing thought leaders I pay close attention to is Mark Schaefer. Mark is the author of several highly-regarded books and the principal author of the widely-read {grow} blog.

Last month, Mark published a blog post arguing that today's marketers are working in a world dominated by malignant complexity. Mark wrote that malignant complexity means "that the insane complications and unintended consequences of rapid technological change makes it difficult to understand our world, let alone predict what's next."

In the future, Mark wrote, the most successful marketers will have to relax their expectations for "predictable outcomes and reliable measures." He summed up his view this way:

"In an age of malignant complexity and unrelenting change, some aspects of marketing measurement will become a leap of faith. In some cases, the speed of business will outstrip our ability to forecast and measure. Perhaps non-measured, speed-driven marketing management will become the norm, a best practice."

Mark's post is sure to raise the eyebrows of many marketing leaders because the conventional wisdom in the marketing community is that measuring the performance of marketing is now more achievable than ever. But then, Mark has always been willing to tell us when he believes "the emperor has no clothes." If you need proof of that, go back and read his 2014 blog post about "content shock."

Expressions of the conventional wisdom are easy to find. For example, I took the following quotation from the website of a major provider of marketing technologies:

"Building analytics into your marketing strategy empowers your marketing and sales teams by giving you the ability to measure the impact of each marketing investment. Data enables marketers to confidently identify which parts of the marketing efforts deliver the optimal return on investment (ROI), including the performance of channels, specific calls-to-action (CTAs), and individual pieces of content, such as blog posts or gated resource guides."

A more skeptical view is captured in the following quotation from a recent article published at the Harvard Business Review website:

"Marketing's environment is typically much 'noisier' that the factory floor in terms of unknown, unpredictable, and uncontrollable factors confounding precise measurement. Marketing activities can also be subject to systems effects where the portfolio of marketing tactics work together to create an outcome . . . Marketing actions may also work over multiple time frames . . . Finally, it is often difficult to attribute financial outcomes solely to marketing, because businesses frequently take actions across functions that can drive results."

Which of these views is correct? The answer is, both are accurate, at least in part. Some aspects of marketing performance are more measurable now than ever, largely because of the explosion of available data about customers and the expanding capabilities of marketing and analytics technologies. At the same time, however, measuring the impact of marketing on business financial outcomes is just as difficult and challenging today as ever.

So how should marketing leaders deal with the measurement challenge? The first step is to accept the measurement paradox part of the reality of marketing. F. Scott Fitzgerald once said, "The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function."

Marketing leaders must also effectively communicate the realities of marketing to other senior business leaders. This means the senior marketing leader needs to have evidence-based conversations with other senior executives about what aspects of marketing can be measured precisely, and what aspects will always require the use of assumptions, correlations, and probabilities.

These discussions will help establish reasonable expectations for marketing measurement and simultaneously enhance the credibility of the marketing leader in the C-suite.

Illustration courtesy of Zeev Barkan via Flickr CC.

Sunday, September 1, 2019

Think Beyond Surveys for More Effective Research

In my last post, I discussed some of the major findings from the State of Original Research for Marketing 2019 survey by Mantis Research and BuzzSumo. This research found that a substantial number of companies have made original research an integral part of their marketing efforts.

Sixty-one percent of the survey respondents who had conducted research reported that it had met or exceeded their expectations, and 88% said they plan to conduct additional research in the next 12 months.

I also argued in my post that for most large and mid-size B2B companies, and for many smaller B2B firms, original research has now become essential for effective marketing. The shorthand version of my argument is this:

  • Effective B2B marketing requires the development and use of real thought leadership content.
  • Real thought leadership content must be both novel and authoritative.
  • The only way to consistently develop novel and authoritative content is by conducting original research.
Original Research is More Than Surveys
When most marketers think about original research, surveys are usually the first thing that comes to mind. In the Mantis Research/BuzzSumo study, surveys were the type of research most frequently used by respondents for marketing purposes.

Surveys are popular because they can provide compelling data and because they have become easier and less expensive to use. Several firms now offer free or inexpensive tools for conducting surveys. (Note:  If you need advice on selecting a survey tool, check out this excellent blog post by Clare McDermott with Mantis Research.)
It's important to recognize, however, that original research encompasses more than quantitative surveys, and that other methods of original research can also be highly effective in the right circumstances. The following diagram shows the major categories of original research and the research methods that fall in each category:

As the diagram shows, there are two major categories of original research - secondary and primary. Secondary research involves the review and analysis of data or research that has been published by others. This includes data published by governmental entities,  and data and/or research published within academia and by other private organizations (consulting firms, research firms, other business organizations, etc.).
Primary research, on the other hand, is research that you conduct yourself (or hire someone to conduct for you). It involves going directly to a source to gather or compile information. The diagram shows several of the most common methods or types of primary research. In addition to surveys, three of these methods can be particularly powerful when used in the right circumstances.
Interviews can be used on a stand-alone basis or in conjunction with other primary research methods. The major advantage of interviews is that they enable the use of open-ended questions and therefore can produce more in-depth and nuanced answers.
When used on a stand-alone basis, the interviewees essentially take the place of the survey panel. In my experience, however, one of the best ways to use interviews is as a preliminary step in a research project that will ultimately include a survey. In this case, the interviews are used to identify what topics may be important to potential survey participants, and to help determine how to formulate survey questions.
Analysis of Proprietary Data
This method involves the analysis of data that is proprietary to your company. For example, if your company provides some type of SaaS software application, this research method could be used to compile and analyze data regarding how your customers are using the application. A good example of research featuring this method is the 2019 State of B2B Content Consumption and Demand Report for Marketers produced by NetLine Corporation.
Experiments or Tests
This research method is widely used in social sciences such as psychology and behavioral economics. When you conduct an experiment, you expose participants to alternative versions of a hypothetical situation, and then ask them a set of questions regarding their experience. The objective is usually to measure differences in certain aspects of the alternatives. A field test is similar to an experiment except that the alternatives are presented in a real-world setting. An "A/B test" is a good example of a type of field test used frequently in marketing.
Corporate Visions is a company that uses experiments and tests fairly extensively. For example, the firm has used this research method to test the effectiveness of various levels of personalization and to evaluate what types of sales/marketing messaging is most effective at persuading business executives to move forward with a purchase.
Expand Your Research Palette
Don't misunderstand my point here. Surveys will always be an important and valuable method for conducting primary research. But diversifying the research methods you use can have several benefits. Each research method has strengths and weaknesses, and each excels at eliciting certain kinds of information. By using a variety of research methods, you can consistently produce thought leadership content that is novel, authoritative, and compelling. And that, in turn, will make your marketing more effective.

Top image courtesy of versionz via Flickr CC.

Sunday, August 25, 2019

Effective B2B Marketing Demands Original Research

A few days ago, Mantis Research and BuzzSumo published the results of their latest survey regarding the use of original research in marketing. The State of Original Research for Marketing 2019 survey was fielded in May and June of this year and produced 644 responses from global marketers. Forty-seven percent of the respondents were from the United States, and 70% were affiliated with B2B companies.

Both Michele Linn with Mantis Research and Chris McCormick with BuzzSumo have written excellent summaries of the research results. You can find Michele's summary here and Chris' summary here. If you're a B2B marketer, I encourage you to read both of these articles, and even better, take the time to review the full survey report.

In the 2019 survey, 39% of the respondents said they had published the results of original research within the 12 months preceding the survey. The comparable percentage in the 2018 version of the survey was 47%. Chris McCormick believes this drop is primarily due to a shift in the demographics of the survey pool rather than a decline in research use, and I tend to agree with his view.

The survey also found that users of original research for marketing are generally satisfied with its performance. Sixty-one percent of the respondents who had conducted research reported that it had met or exceeded their expectations, and 88% said they plan to conduct additional research in the next 12 months.

So overall, this study indicates that a substantial number of companies have made original research an integral part of their marketing efforts.

The use of original research in marketing is not a new phenomenon. However, I would argue that for most large and mid-size B2B companies, and for many smaller B2B firms, original research has now become essential for effective marketing. Here's why.

Effective B2B Marketing Requires Real Thought Leadership Content

For most B2B companies, effective marketing now requires the development of compelling thought leadership content. Numerous research studies have confirmed that business buyers highly value thought leadership content, and that it impacts B2B purchase decisions at every stage of the buying process.

For example, in a 2018 survey of 1,201 business decision makers by Edelman and LinkedIn:

  • 58% of respondents said they spend one hour or more per week consuming thought leadership content
  • 55% said thought leadership content is a important way to vet potential suppliers
  • 58% said good thought leadership content caused them to award business to a company
  • 61% of C-level respondents said good thought leadership content made them more willing to pay a premium to work with a company
Real Thought Leadership Content Must Be Novel and Authoritative
The explosive proliferation of content over the past several years had made it difficult for marketers to create content that will cut through the noise. Thought leadership content can do just that, but only if the constitutes "real" thought leadership. There are two attributes that define real thought leadership and distinguish it from other types of marketing content.
Real thought leadership is novel - Real thought leadership content provides information and insights that are genuinely novel. Merriam-Webster defines novel as "new and not resembling something formerly known or used." Therefore, to qualify as real thought leadership, content must provide information or insight that adds something new and meaningful to the body of knowledge about a topic.
Real thought leadership is authoritative - It's important for all types of marketing content to be credible, but thought leadership content must meet a higher standard. Because thought leadership content advocates new and novel ideas, it's essential for content developers to support those ideas with sound and persuasive evidence.
Real Thought Leadership Content Requires Original Research
The only way to consistently develop novel and authoritative content is by conducting original research. Original research actually plays two central roles in the development of real thought leadership content. First, original research is required to capture the new information and develop the new insights that make thought leadership content novel. And second, original research is critical for thought leadership content because it provides the evidence that makes the content authoritative.

So the bottom line is, effective B2B marketing requires compelling thought leadership content, and original research is the only viable source for such content.

Image courtesy of Vall d'Hebron Institut de Recerca VHIR via Flickr CC.

Sunday, August 18, 2019

Expert Advice on How to Communicate Marketing's Value

In the February 2019 edition of The CMO Survey, senior marketing leaders were asked what marketing leadership activities they find most challenging. The top challenge identified - by a wide margin - was demonstrating the impact of marketing activities on financial outcomes to other senior company leaders.

Measuring the performance and financial impact of marketing has been a persistent challenge for marketing leaders. In the 2019 Marketing Measurement & Attribution Benchmark Survey by Demand Gen Report, 58% of surveyed marketers said their ability to measure and analyze marketing performance and impact needs improvement or is poor/inadequate. The comparable percentage was 54% in the 2018 edition of the survey, and 49% in the 2017 survey.

Last month, an article published at the Harvard Business Review website described concrete steps that marketing leaders can take to improve their ability to demonstrate the value of marketing. "8 Ways Marketers Can Show Their Work's Financial Results" was written by Paul Magill, Christine Moorman, and Nikita Avdiushko.

Paul Magill is a Managing Director with Deloitte Consulting and the former CMO for Abbott. Dr. Moorman is the T. Austin Finch, Sr. Professor of Business Administration at Duke University's Fuqua School of Business and the Director of The CMO Survey. Nikita Avdiushko is a recent MBA graduate from Duke.

Eight Steps for Demonstrating Value

This article provides valuable advice for marketing leaders, and I would like to see the authors address this vital topic in a longer, more in-depth version of the article. In the meantime, here's a very abbreviated version of the eight steps described in the already brief article.

1.  Start with business value - "Marketing leaders should frame their impact broadly, to include all the ways marketing benefits the organization."

2.  Understand what business value means to each function - "Marketing leaders should translate the definitions of their value creation for the different [business] functions they interact with."

3.  Know your own metrics - Most marketing leaders have a set of KPIs they use to demonstrate impact on financial outcomes, and it's critical to be thoroughly knowledgeable about them."

4.  Explain the inherent uncertainties of marketing measurements - "Deep knowledge of the metrics can build your credibility when you're discussing them with other executives, but it helps to explain marketing's inherent uncertainties."

5.  Emphasize validity over precision - "CMOs should emphasize that their metrics are valid when evaluating whether marketing activities are working as expected, and that the inherent imprecision in measuring marketing's financial outcomes does not undermine their validity."

6.  Have a budget strategy - "Provide visibility on total spend, show how spend is aligned with business strategies and key priorities, and demonstrate how working spend has been optimized and non-working spend streamlined."

7.  Have a marketing transformation story - "Further credibility can come from demonstrating ongoing improvements in marketing effectiveness and efficiency."

8.  Meet one-on-one - "Marketing leaders usually attend monthly meetings of the senior management team . . . Our observations suggest these are often poor environments for demonstrating the impact of marketing on the bottom line . . . That work should happen one-on-one, with the CMO investing considerable time in educating their functional counterparts about these points above."

First Among Equals

All eight of these steps are important, but I suggest that Steps 4 and 5 stand out as "firsts among equals."

Over the past two-plus decades, various technologies have significantly enhanced our ability to track and measure some aspects of marketing performance. Today, for example, most forms of digital marketing are highly "trackable." We can know who has opened our emails and who has viewed our content. We can even know how much time was spent with our content.

In addition, technology is now enabling marketers to develop and use more comprehensive revenue attribution models that leverage the strengths of both marketing mix modeling and multi-touch attribution.

But as the authors of the HBR article observed, marketing involves "unknown, unpredictable, and uncontrollable factors confounding precise measurement." Unfortunately, much of the hype surrounding marketing performance measurement makes the job seem to be easier and capable of more precision than is actually the case.

So it's important for marketing leaders to have open and frank discussions with other C-suite executives about what aspects of marketing performance can be measured precisely, and what aspects inherently require the use of assumptions, correlations, and probabilities. Such discussions will help set reasonable expectations regarding marketing performance measurement and ultimately enhance the credibility of marketing leaders in the C-suite.

Illustration courtesy of GotCredit via Flickr CC.

Related Articles

Measuring the Maturity of Marketing Operations

McKinsey on How CMOs Can Effectively Lead Growth

B2B Highlights From the Latest CMO Survey

Marketers Are Embracing Advanced Marketing Measurement

Sunday, August 11, 2019

Have the Differences Between B2B and B2C Marketing Disappeared?

Recently, it's become popular to downplay the differences between B2B and B2C marketing. Some industry analysts and commentators have forcefully argued that all marketing should be viewed as "business-to-human," "human-to-human," or something similar.

It's certainly accurate to say that virtually all forms of marketing involve the communication of messages to human beings. It's equally true that business decision makers are also consumers, and that the attributes and preferences they have as consumers don't evaporate when they're acting in a professional capacity. But have all the meaningful differences between B2B and B2C marketing really disappeared?

The findings in two recent research reports - one by Marketo (now part of Adobe), and one by Forrester Consulting (commissioned by Adobe) - suggest that some of the lines between B2B and B2C marketing have become blurred. These two studies used different research approaches, and they emphasize different aspects of B2B and B2C marketing, but both raise issues that merit consideration.

The Marketo Study

For this study, Marketo partnered with Loudhouse, an independent research firm, to survey 910 B2B buyers and interview 305 B2B marketing professionals. All of the study participants were located in the UK, Germany, or France, and the surveyed buyers represented a range of company sizes and job functions, including IT, Finance, HR, and Operations.

The survey found that, like consumers, B2B buyers are very concerned about privacy. More than 80% of the survey respondents said it is important for their prospective vendors to be serious about protecting their business and personal data and to always conform to best practices for handling their data and sensitive information.

Marketo's survey also found that many B2B buyers, like many consumers, are placing importance on the social values and practices of the companies they do business with. The following table shows the percentage of buyer survey respondents who rated six social practices as important:

This study also revealed two other emerging similarities between business buyers and consumers. First, 30% of the surveyed buyers said they would disengage from a vendor whose values don't match their own. And second, it appears that B2B buyers, like consumers, are becoming less loyal. Forty-three percent of the surveyed buyers said they are always looking for a better deal.

The Forrester Consulting Study

The principal objective of the Forrester Consulting study was to explore the similarities between business and consumer purchase journeys. For this research, Forrester surveyed 552 B2B and B2C marketers (manager level and above) representing a wide range of industries and company sizes. Survey respondents were drawn from a total of nine countries. Because of the composition of the survey panel, this research actually captures the perceptions of marketing professionals regarding the convergence of business and consumer buying behaviors.

In the Forrester survey, marketers identified three attitudes or behaviors that business buyers and consumers share:
  • "The desire to remain anonymous"
  • "The tendency to seek input and opinions from other users before making a purchase"
  • "The amount of emotions involved in the decision making"
More specifically, Forrester asked marketers how certain elements of their customers' buying journey have changed over the past two years. The following table shows the percentage of B2B and B2C marketers who reported that these journey attributes had increased significantly or somewhat:

My Take
There is little doubt that the expectations and behaviors of business buyers are being influenced by their experiences as consumers. But this doesn't mean that all meaningful differences between B2B and B2C marketing have disappeared.
Most B2C marketing still involves the communication of relatively simple messages to a large or very large audience. Most B2B marketing, on the other hand, still involves the communication of more complex messages to a relatively small audience. This difference alone requires the use of different marketing strategies, channels, and tactics.

Top image courtesy of George Redgrave via Flickr CC.

Related Articles

The Differences Between B2B and B2C Marketing That Still Matter

Sunday, August 4, 2019

What Communication Channels Do Customers Prefer? It Depends!

Last month, the CMO Council in partnership with Pitney Bowes published the results of a study that sought to identify what communication channels consumers prefer to use when interacting with the companies they do business with.

The Critical Channels of Choice report is based on a survey of more than 2,000 consumers with nearly equal representation from five generational cohorts - the Silent Generation, Baby Boomers, Gen Xers, Millennials, and Gen Zers. Eighty-one percent of the survey respondents were from the United States, and the balance were from Canada, the UK, Ireland, and Australia/New Zealand.

This research focused on all forms of communication except advertising. While this study involved the channel preferences of consumers, it is likely that many of the research findings will also apply to business buyers.

The core finding from this study is that today's consumers across all generations want and expect the companies they do business with to provide multiple engagement channels. Eighty-five percent of the survey respondents said they expect companies to offer a blend of physical and digital communication channels. More specifically, when survey participants were asked what communication channels they expected companies to provide, the top five channels identified were:

  • Email (86% of respondents)
  • Telephone (65%)
  • Website (53%)
  • Text (52%)
  • In person (48%)
Interestingly, when survey participants were asked what communication channel they couldn't live without, the two channels most frequently identified by respondents - telephone (28%) and in person (17%) - were both non-digital.
What this research also shows clearly is that consumers prefer communication channels that provide value, and that the most important elements of value are pragmatic. When survey participants were asked what makes a channel indispensable, the top three attributes identified were convenience (50%), reliability (45%), and speed (41%).
Several other recent research studies have found that consumers place most importance on the utilitarian aspects of customer experience. For example, in an earlier study by the CMO Council and SAP Hybris, survey participants were asked to identify the attributes of an exceptional customer experience. The top three choices were:
  1. "Fast response times to my needs and issues" (52% of respondents)
  2. "Knowledgeable staff ready to assist wherever and whenever I need it" (47%)
  3. "Rewards for my loyalty and recognition of how long I have been a customer" (42%)
It's also revealing to see what these survey respondents put at the bottom of their list of important CX attributes:
  • "Always-on automated service" (8% of respondents)
  • "Brand-developed social communities to connect with other customers" (9%)
  • "Multiple touchpoints that add value to my experience" (10%)
Participants in this study were also clear about what types of customer experiences are valuable. They want experiences that save them money (77% of respondents), save them time (49%), or make their lives easier (47%).
PwC's Future of Customer Experience 2017/18 study produced similar findings. This research consisted of an online survey and in-field interviews of a representative sample of 15,000 global consumers, 4,000 of whom were from the United States. Almost 80% of the U.S. respondents rated speed, convenience, knowledgeable and helpful employees, and friendly service as the most valuable aspects of a great customer experience.
So what does this research tell us about how customers form channel preferences. I contend there are two important points. First, the findings of the new CMO Council study make it clear that customers want the option to communicate with companies via a variety of channels. Second, customers will prefer different channels depending on what they are trying to accomplish and the other circumstances surrounding the interaction, and their preferences and choices will be driven by convenience, speed, and reliability in most circumstances.

Image courtesy of Mike Lawrence ( via Flickr CC.

Related Articles

Despite Challenges, Marketers Remain Committed to CX Technologies

New Research Highlights Personalization, Privacy, and Customer Experience Performance

Where Customer Experience Stands in 2019

Sunday, July 28, 2019

Why One Strategy for the Status Quo Isn't Enough

B2B purchases come in all shapes and sizes, and B2B buying decisions are made under a wide variety of circumstances. The context of a buying decision includes - among other things - the cost of the product or service, the complexity of the product or service, how familiar the buyers are with the product or service, the amount of internal change the purchase will require, and buyers' current or past experiences with a prospective vendor.

Collectively, these circumstances largely dictate the psychological factors that will influence buyers and the shape of their decision-making process. The result is, most B2B marketing and sales professionals must be ready to deal with multiple buying scenarios that usually call for different strategies, content, and messaging.

For example, acquiring a new customer presents marketers and sales reps a very different scenario than retaining an existing customer (at the current level or scope of business). And expanding your business with an existing customer presents a third scenario that has some elements of both customer acquisition and customer retention.

The Central Role of the Status Quo

Some marketing and sales pundits say that one vital key to success in all three of these scenarios lies in how marketers and sales reps address the status quo bias, which is typically defined as a cognitive bias that causes humans to prefer the status quo for non-rational reasons. If you think about it for even a few moments,  it should become obvious that customer acquisition and customer retention call for dramatically different approaches for dealing with the status quo bias.

When your objective is to acquire new customers, the status quo is often your toughest competitor, and no sale can be made unless potential buyers first become willing to change their status quo. In this scenario, the first thing that marketing and sales content and messaging need to do is to weaken the grip of the status quo and convince prospects to make a change. Today, the most effective customer acquisition content and messaging uses disruptive insights to encourage prospective buyers to think differently about some aspects of their business.

The circumstances completely change with your objective is to retain existing customers. In this scenario, your company is the incumbent and part of the customer's status quo. Therefore, the first thing that marketing and sales content and messaging need to do is to reinforce the status quo bias and use it to your advantage.

Customer Expansion is More Complex

The situation becomes more complex when your objective is to expand your business with existing customers. As noted earlier, customer expansion scenarios usually have elements of both acquisition and retention. Therefore, marketing and sales content and messaging will need to reinforce some aspects of the status quo and weaken others.

Corporate Visions has developed a content and messaging framework for addressing customer expansion scenarios. The framework is based on research conducted by Corporate Visions in partnership with Dr. Nick Lee, Professor of Marketing at the Warwick Business School in the UK. The study consisted of a test simulation or "experiment" of the kind widely used in academic psychological research.

This research tested five types of customer expansion messaging, and one message type proved to be more effective than the other four across several performance dimensions. The framework of the willing message has five components that are used sequentially. The following table shows the five message components and how Corporate Visions describes each component:

As the table shows, the winning message is a "hybrid" that both reinforces and challenges the status quo. It begins by documenting the value of your relationship with the customer (part of the status quo). But from that point on, it emphasizes the need for change and the positive results that the right kind of change will produce.

Key Takeaway

The bottom line is, most B2B companies derive revenue from multiple buying scenarios, and the impact of the status quo is different in each scenario. Therefore, marketing and sales professionals need to develop and use content and messaging that embodies an approach to the status quo that's appropriate for each scenario.

Top image courtesy of Nichole Burrows via Flickr CC.

Related Articles

How to Persuade Prospects to Leave the Status Quo

How to Show Buyers That Inaction Has a Price

How to Reinforce the Status Quo

What to Do When the Status Quo is Your Friend

How to Weaken the Grip of the Status Quo

Sunday, July 21, 2019

Measuring the Maturity of Marketing Operations

A recent survey conducted by Econsultancy in partnership with Sojourn Solutions provides several valuable insights regarding the state of marketing operations (MOPS) at large and mid-size B2B companies.

The 2019 Marketing Operations Maturity Benchmarking Report was based on a survey of 171 senior executives at B2B companies with 2018 revenues of more than $250 million. Thirty-eight percent of the respondents reported 2018 revenues of more than $1 billion.

Sixty-three percent of the survey respondents were located in North America, and 32% were based in the U.K. All respondents were manager level or above, and all described themselves as either a member of their company's marketing operations team (45%) or very familiar with its operations (55%).

The objective of this research was to benchmark the performance of the marketing operations function along several dimensions and to identify what aspects of marketing operations companies are doing well, and where there is room for improvement.

Econsultancy broke survey respondents into two groups, and the survey report provides data for each of these groups. Top Performers were the respondents who reported that their marketing function exceeded it top business goal in 2018. Top Performers accounted for one-third of the total survey panel. The remaining two-thirds of the survey sample were called Mainstream respondents.

The differences between Top Performers and Mainstream respondents revealed by the survey results are both significant and consistent. The following table contains nine of the performance benchmarking statements Econsultancy included in the survey. The table also shows the percentage of Top Performers and Mainstream respondents who said that each statement was fully or mostly true for their marketing operations function.

As the table shows, there is a gap of at least 24 percentage points between Top Performers and Mainstream respondents on all nine of the performance benchmarks, and a gap of at least 31 percentage points on seven of the benchmarks.

Econsultancy captured the essence of the difference between Top Performers and Mainstream organizations in these terms:

"Relative to their mainstream peers, top performers are further along in the marketing operations evolution in every measure. This striking consistency reflects the interconnected nature of modern marketing; few disciplines within MOPS can exist independently. Top performers are far more likely to have reached a point of marketing-led change, effective implementation or cultural acceptance across a variety of measures."

The Econsultancy survey provides several interesting insights about the maturity of MOPS at B2B companies, but there are a couple of things to keep in mind about this research. First, the survey only produced 171 total responses, which means that the Top Performers group contained fewer than 60 respondents. We should be cautious about giving a great deal of weight to data derived from such a small survey sample.

My second point relates to how Econsultancy divided the survey panel for analysis and reporting purposes. As I indicated earlier, Econsultancy classified respondents who reported that their marketing function had exceeded its top business goal in 2018 as Top Performers. This group represented about one-third of the total respondents. Econsultancy classified the remaining two-thirds of the respondents as Mainstream.

About one-third (35%) of the total respondents reported that their marketing function had met its top business goal in 2018. These respondents were included in the Mainstream group along with those who said their marketing function had not achieved is top 2018 business goal.

I wish Econsultancy had divided these respondents into separate groups for reporting purposes because that would have provided a good picture of the attributes of "average" performers. I suspect that the gaps between the "average performers" and the Top Performers would be narrower, while the gaps between the Top Performers and the laggard group (those who missed their top 2018 goal) would be even wider.

Top image courtesy of Personal Creations via Flickr CC.

Sunday, July 14, 2019

New Research on the Attributes of Complex Buying Decisions

Demand Gen Report recently published the findings of its eighth annual B2B Buyers Survey. The 2019 survey received responses from more than 250 B2B executives representing a variety of industry verticals. Fifty-four percent of the respondents said they predominantly made software/technology purchases. Another 19% said they primarily purchase IT hardware. So about three-fourths (73%) of the respondents were involved in purchasing some type of technology. Virtually all of the respondents were manager-level or above.

The 2019 research shows a continuation of trends that appeared in earlier editions of the buyers survey. For example, a majority of survey respondents have been reporting that the length of their buying cycle is increasing for at least the past four years, as the following table shows:

Demand Gen Report presented the survey panels with several statements describing various aspects of their purchasing process. The following table shows the percentages of respondents in the 2019 and 2018 surveys who said they strongly agreed with five of these statements:

The 2019 survey indicates that a growing number of buyers have become more willing to engage with vendor reps early in their buying process. For example:

  • 42% of the respondents said they spoke to and engaged with vendor reps in the first month of their buying process (up from 33% in the 2018 edition of the survey).
  • 33% said they accepted outreach from prospective vendors for calls and demos in the first month (up from 23% in 2018).
  • 25% said they asked for RFx's, competitive bids, or pricing information in the first month (up from 20% in 2018).
Demand Gen Report also asked survey participants about several factors that distinguished winning vendors from others. The following table shows the percentages of respondents in the 2019 survey who rated six characteristics of winning vendors as very important:

The 2019 B2B Buyers Survey provides important insights regarding the attitudes and behaviors of business buyers, but it's important to recognize that this research doesn't really cover the entire spectrum of B2B buying. The first sentence of the survey report makes this clear when it says:  "Over the course of eight years, Demand Gen Report's annual B2B Buyers Survey has spotlighted the ever-changing needs and expectations of the different stakeholders in complex purchasing decisions." (Emphasis added)
The Demand Gen Report survey, like most of the published research about B2B demand generation, deals with "high consideration" purchases that feature large buying groups, complex decision-making processes, and long buying cycles. But high consideration purchases have never represented all B2B buying.
Many B2B purchases are fairly routine, where the buying decision is made quickly by a small group of people, or even a single individual. In a 2018 survey of 114 "industrial buyers" by Thomas, over half (56%) of the respondents said they make buying decisions in less than one month.
While not much recent data is available, it's likely that more routine purchases account for a significant part of total B2B buying. In a landmark study of more than 3,000 B2B buyers conducted in 2009 by Enquiro, survey respondents estimated that 50% of their budget was spent on "Repeat" purchases - low-risk purchases that are made frequently and involve familiar products or services.
The reality is, most B2B companies derive revenue from multiple types of buying scenarios, and these scenarios will differ in significant ways. Understanding how these scenarios differ and what causes the differences is important because they call for different marketing and sales strategies. I'll provide a framework for analyzing buying situations in a future post.

Top image courtesy of ITU Pictures via Flickr CC.

Sunday, July 7, 2019

McKinsey on How CMOs Can Effectively Lead Growth

Last month, McKinsey & Company published an article that discussed the evolving role of marketing - particularly the role of the CMO - in driving business growth. Marketing's moment is now:  The C-suite partnership to deliver on growth was based in part on a 2019 study that included interviews with 60 C-level executives and quantitative surveys with another 200.

In the McKinsey study, 83% of global CEOs said that marketing can be a major driver of business growth. However, 23% of the CEOs do not believe that their marketing organization is delivering on the growth agenda. Other C-level executives are even more skeptical. For example, only half of the CFOs surveyed by McKinsey said that marketing delivers on the promise of driving growth.

The central theme of the article is that "a marketing organization's ability to drive growth depends heavily on the strength of the partnerships the CMO can forge across the organization."

Three CMO Archetypes

The authors of the article contend that CMOs fall into one of three categories.

Unifiers - Unifier CMOs are very good at developing cross-functional partnerships with other C-level executives. They speak the language of their C-suite peers and possess a results-oriented mindset. Unifier CMOs often play an important role in developing the company's strategy. McKinsey estimates that about 24% of CMOs are Unifiers.

Loners - Loner CMOs are often capable marketers, but they don't typically have close relationships with their C-suite peers. These CMOs usually focus on tactical marketing activities, and they aren't likely to be involved in designing the company's business strategy. McKinsey estimates that about 27% of CMOs are Loners.

Friends - According to McKinsey, about half (49%) of CMOs are Friends, and these CMOs fall somewhere between Unifiers and Loners. A Friend CMO may have a solid relationship with the CEO and may be responsible for driving growth through normal marketing channels and tactics, but they usually haven't extended their sphere of influence across the organization.

According to McKinsey's analysis, high-growth companies are seven times more likely to have a Unifier CMO than a Loner.

Where Unifier CMOs Excel

The McKinsey consultants wrote that Unifier CMOs excel in four areas that enable them to effectively drive growth:

  • They ensure that the CEO fully understands how marketing is driving growth and contributing to the company's overall goals and objectives, and they leverage the CEO's support to extend marketing's influence over growth-related activities across the entire organization.
  • They win support from the CFO by using metrics and analytics to quantitatively demonstrate how marketing impacts growth and business value.
  • They work collaboratively with the CIO or CTO to leverage data to better understand customers, personalize interactions, and predict customer behavior.
  • They work with the head of human resources to ensure that marketing can acquire, develop, and retain the human talent that is necessary to support marketing's growth responsibilities.
My Take
The McKinsey article embodies a theme that I've seen discussed with increasing frequency over the past couple of years. A growing number of marketers and other business leaders are recognizing that no one department or business function can single-handedly deliver great end-to-end customer experiences or drive maximum business growth.
Both great end-to-end customer experiences and maximum growth require the efforts of multiple business functions across the organization that are aligned around a common business strategy and are working in a collaborative and coordinated way. McKinsey says that the CMO should be primarily responsible for driving business growth, and this view has also been advanced by Deloitte and Forrester.
But there are alternative approaches to managing growth. Over the past few years, many companies (mostly B2C firms) have appointed chief growth officers to lead and coordinate growth efforts. In 2017, Culture App, an employee engagement and analytics software firm, reported that 455 U.S. companies have chief growth officers. That number is almost certainly higher now.
Meanwhile, many B2B companies - particularly technology start-ups and those operating in the SaaS software space - have been appointing chief revenue officers who are tasked with managing the company's revenue-related business functions including marketing, sales/business development, direct outside sales, channel management, and customer success/ customer support.
I suspect that we will continue to see all of these approaches used as CEOs try to identify the best way to drive and manage growth.

Image courtesy of (Creative Commons License).

Sunday, June 30, 2019

Despite Challenges, Marketers Remain Committed to CX Technologies

In my last post, I discussed some of the findings from a recent study by The Harris Poll and RedPoint Global. Addressing The Gaps In Customer Experience was based on the results of two surveys. One involved 454 senior marketing and customer experience executives, and the second involved 3,002 adult consumers. The participants in both surveys resided in the United States, Canada, or the United Kingdom.

As the title of the research report suggests, the primary objective of this study was to identify where and how the perceptions of marketers and consumers about the quality of customer experiences differ. I discussed some of those findings in my earlier post.

This research also provides several interesting insights about how marketers view the technologies they use to deliver customer experiences. Somewhat surprisingly, the marketers in this study view technology as essential for providing great customer experiences and as a source of major challenges.

The Strategy-Execution Gap

First, it's important to put the findings about technology in the right context. Most of the marketers in this study were satisfied with their customer experience strategy, but not with its execution. More than half (57%) of the surveyed marketers said their company has the right customer experience strategy, but isn't able to execute it effectively. An even higher percentage (63%) said their company doesn't execute its customer experience strategy "very well."

When the survey participants were asked about the challenges associated with closing the strategy-execution gap, the top three challenges identified were:
  • The complexity of technology solutions (39% of respondents)
  • Lack of cross-functional commitment to strategy (35%)
  • The inability to integrate new capabilities with existing processes or technology (33%)
Satisfaction With Technology
On average, the marketers in the study said their company is currently using 10 customer engagement technology systems. About one in five of the survey respondents said their company is using more than 20 customer engagement systems.
The sheer number of technology systems is creating a challenge for marketers. Nearly two-thirds (65%) of the marketers in this study said the number of customer engagement systems they are using makes it harder for them to provide a seamless customer experience.
Only about a third (more or less) of the surveyed marketers were very satisfied with their ability to leverage technology to achieve several key customer experience objectives, as the following table shows:

Despite the challenges associated with CX-related technologies, marketing leaders are committed to a technology-enabled future. More than nine in ten (91%) of the marketers in this study said that investing in marketing and CX technologies is a key initiative for their company.
Twenty-one percent of the surveyed marketers said they expect the number of customer engagement systems used by their company will increase over the next year, and even more (39%) think the number will increase over the next five years.
The Takeaway
These findings make the point that marketers and other CX professionals have more work to do to capture the full benefits of marketing and other customer engagement technologies. But these technologies are evolving rapidly, so it shouldn't be surprising that marketers and other CX professionals are still learning how to maximize their value. In my view, this is to be expected, and it's not a business-threatening problem unless the "proficiency gap" becomes too great.

Top image courtesy of Rabin Pamela via Flickr CC.

Related Articles:

Where Customer Experience Stands in 2019

Salesforce Study Identifies Major Marketing Trends

Both Market and Customer Expertise are Needed to Drive Growth

Decoding the Vital Attributes of Great Customer Experiences 

Sunday, June 23, 2019

New Research Highlights Personalization, Privacy, and Customer Experience Performance

Senior company leaders in virtually all types of businesses now recognize that providing great customer experiences is a critical source of competitive advantage and a primary driver of business performance. As a result, customer experience (CX) management has become a top strategic priority in many enterprises.

Given this interest, it shouldn't be surprising that CX has been the subject of numerous research studies over the past several years. One of the best studies I've seen recently was published earlier this year by The Harris Poll and RedPoint Global.

Addressing The Gaps In Customer Experience was based on two surveys that were fielded in early 2019. One was a survey of 454 senior marketing executives residing in the United States, Canada, or the United Kingdom. This survey also included technology and customer experience executives, but I'll refer to the participants in this post as "marketers" or "marketing leaders."

All of the surveyed marketers were affiliated with companies having a minimum of $500 million in annual revenue. (Note:  The annual revenue minimum was $200 million for companies that derive more than 50% of their revenue from direct sales to end users.

The second survey involved 3,002 consumers (18+ years of age) residing in the United States, Canada, or the United Kingdom. Figures for age, gender, education, region, and employment status were weighted where necessary to bring them into line with their actual proportion in the population.

This type of study is particularly instructive and useful because it enables us to compare and contrast the perspectives of marketing leaders and consumers, and this is very valuable when the topic is customer experience. As the title of the research report suggests, these surveys found several significant gaps between marketers and consumers regarding customer experience performance.

The Performance Gap

The "headline" finding from this research was that marketers rate the quality of their customer experience capabilities significantly higher than consumers. Ninety-two percent of the marketers said their ability to provide an exceptional customer experience is excellent or good. But when the consumers were asked to think about the companies they interact with on a regular basis, only 80% rated these companies as excellent or good at providing great customer experiences.

The contrast is even greater if we look only at the "excellent" rating. Thirty-four percent of the marketing leaders gave themselves an excellent rating, but only 18% of consumers gave that highest rating.

This research used a "Customer Experience Index Score" to evaluate CX performance across four dimensions - privacy, personalization, customer understanding, and omnichannel/consistency. Not surprisingly, marketers gave themselves higher scores on all four dimensions than consumers.

Personalization and Privacy are Paramount

The findings of this study also provide compelling evidence that both personalization and privacy are of paramount importance when it comes to customer experience. In the consumer survey, 63% of the respondents said that personalization is now part of the standard service they expect, and over half (53%) said they expect a company to know their buying habits and preferences and be able to anticipate their needs.

Customer expectations for personalization have risen to the point that 37% of the consumers said they would stop doing business with a company that doesn't offer a personalized experience. And while 36% of the survey respondents said that companies are presenting them with more personalized offers and messages compared to a year ago, 73% said that companies are still struggling to meet their expectations for personalized experiences.

Consumers in this study also made it abundantly clear that privacy is a primary concern. In fact, they ranked privacy as the most important dimension of customer experience, and 41% of the survey respondents said they would absolutely stop doing business with a company that sells their data to other companies for marketing or advertising purposes without their permission.

The consumer survey also asked participants about the importance of four privacy-related actions that companies can take. The following table shows the percentages of respondents who rated each action as very important or absolutely essential:

The Harris Poll/RedPoint Global research also has several important things to say about the role of technology in providing great customer experiences. I'll discuss those findings in a future post.

Top image courtesy of citylovesyou_ffm via Flickr CC.

Related Articles:

Where Customer Experience Stands in 2019

Salesforce Study Identifies Major Marketing Trends

What Abraham Maslow Can Teach Us About Customer Experience

Sunday, June 16, 2019

With Personalization, Less Can Be More

There is no longer any doubt that marketers overwhelmingly believe in the value of personalization. Most marketing leaders now view personalization as essential to marketing success, and providing personalized messages and customer experiences has become a top priority in many companies.

Numerous research studies have confirmed that large majorities of marketers believe personalization improves marketing and business performance. For example, in the 2019 Trends in Personalization survey by Researchscape International, 70% of surveyed marketers said personalization has a strong or extremely strong impact on advancing customer relationships.

And in a 2018 survey of more than 600 business executives by Harvard Business Review Analytic Services, more than half of the survey respondents said personalization is an important driver of their revenue and profits.

Recent research also shows, however, that marketers have more work to do to realize the full potential of personalization. In the Researchscape International survey, only 16% of survey respondents said they are very or extremely satisfied with the level of personalization in their marketing efforts. Fully half of the respondents said they are not satisfied or only slightly satisfied.

To maximize the impact and effectiveness of personalization, marketers need to use the right level of personalization for each customer interaction. Most marketing pundits and many marketing leaders seem to believe that the key to maximizing the benefits of personalized marketing is more personalization. According to this view, the right strategy is to leverage every bit of available data about customers and prospects to make personalization more specific, and to use personalization more frequently, in more channels, and for more types of communications and experiences.

But as I recently argued, the problem with the "more personalization" approach is that it largely ignores the real and growing privacy concerns of both consumers and business buyers. The real key to maximizing the effectiveness of personalization is to use an appropriate level of personalization for each interaction with a customer or prospect. And in some situations, the best strategy will be less, not more, personalization.

The Corporate Visions Research

Recent research by Corporate Visions provides compelling evidence that less can in fact be more when it comes to personalization. This study consisted of a live field trial that involved nearly 7,000 potential buyers in the Corporate Visions prospect database. All of the prospects in the trial met two criteria:

  • Each was a cold prospect - someone who had had no prior interaction with Corporate Visions
  • Each fit the Corporate Visions ideal client profile (industry vertical, company size, and job title).
The objective of this study was to test the effectiveness of four methods or levels of personalization:
  • Industry only
  • Company only
  • Industry + personal
  • Company + personal
For the trial, Corporate Visions used emails that had identical offers and calls-to-action, but different subject lines and openings based on the method of personalization used. (Note:  The research report includes examples of the emails.)
The trial used three metrics to evaluate the effectiveness of each level of personalization - open rates, click-through rates, and number of meetings scheduled. The following table summarizes the results of the field trial.

As the table shows, the emails that used company + personal personalization (the highest level of personalization) produced the highest open rates, while those using industry only personalization (the lowest level of personalization) produced the lowest open rates. But the positions were exactly reversed with click-through rates. The emails that used industry only personalization produced the highest click-through rates, while those using company + personal personalization produced the lowest. 
In terms of meetings, the emails that embodied either industry + personal or industry only personalization produced significantly more scheduled meetings than those using either company + personal or company only personalization.

So the results of this trial indicate that when reaching out to cold prospects, messages that embody less personalization actually produce better conversion rates than messages using higher levels of personalization.
Explaining the Differences
The Corporate Visions research did not attempt to explain why the different methods or levels of personalization produced different results. However, in the research report, Leslie Talbot, Corporate Visions' Vice President of Customer and Commercial Excellence, offered a possible explanation:
"Human beings are self-centered enough to respond readily to something that looks like it's personal to us. But when we discover the underlying gimmick - that is, someone plucked a random fact from our LinkedIn profile and used it to suck us in - the letdown factor is enough to preclude further action.
Similarly, when you try to ingratiate yourself to someone by referencing an issue specific to their company, they already know you don't work there - you've just read publicly available content . . .
On the other hand, if you offer an insight about a prospect's industry, you activate their voyeurism . . . So when you share a story about how a similar company struggled and solved a common industry concern, they're better able to project themselves into the story and eager to find out what happened next."
I believe that Ms. Talbot's speculation is fairly accurate. To be effective, personalization must be based on genuine insights. When you take personalization beyond such insights, it become inauthentic, and customers or prospects will tend to view it as presumptuous.

Top image courtesy of BobChao via Flickr CC.

Related Articles:

Two Ways to Make Personalization Welcomed

The Growing Personalization Conundrum for Marketers

Salesforce Study Identifies Major Marketing Trends

How Customers Really Feel About Personalization

New Insights on Personalization - Usage, Value, and Challenges