B2B Marketing Directions

Stop Trying to Measure Marketing ROI

2012-01-25T15:27:00.001-06:00

For the past several years, CEO's and CFO's have been demanding greater accountability from the marketing function, and they have been pressing marketers to prove the value of their activities and programs. In this environment, return on investment (ROI) has become the "gold standard" for measuring marketing performance. In a recent study by IBM, 63% of CMO's said that marketing ROI will be the most important measure of their success by 2015.

Return on investment has been a widely-used business performance metric for at least eighty years. It's a concept that business executives are comfortable with, so it's understandable that CEO's, CFO's, and marketers want to use ROI to evaluate the performance of marketing investments. In addition, many marketing writers and pundits contend that it's possible to calculate the ROI of almost any marketing activity. Unfortunately, however, it's not always easy or even possible to determine an accurate ROI for some marketing activities or programs.

Some time ago, I wrote a series of posts that discussed some of the issues relating to the use of ROI to measure marketing performance. You can find those posts here, here, here, and here. The point I want to make in this post is that if you can't accurately attribute revenues to a marketing activity, you can't calculate an accurate ROI for that activity.

The "revenue attribution" issue is particularly challenging for B2B companies that have complex, multi-step marketing and sales processes and long demand generation cycles. The diagram below illustrates the problem. This type of diagram is known as a cause-and-effect (or a "fishbone") diagram. Cause-and-effect diagrams are used in process improvement work to identify all of the possible causes of a given problem. In this case, I'm using the diagram to identify all of the marketing and sales interactions that occurred between a company and a prospect who ultimately made a $100,000 purchase.

In this hypothetical situation, the prospect was sent six lead generation offers and responded to the last of these offers. The prospect also:

Received and responded to several lead nurturing offers
Visited the company's website and viewed or downloaded several content resources
Participated in several meetings and other activities with the company's sales rep

The question is: How do you attribute the $100,000 in revenue to the marketing and sales activities that played some role in the purchase decision? What percentage of the revenue do you attribute to the lead generation programs, to the lead nurturing program, to the website, and to the direct selling activities? In reality, there's no way to accurately and reliably attribute revenue in these kinds of circumstances. Even our hypothetical prospect probably couldn't tell us how much each marketing/sales interaction influenced his/her purchase decision.

In these circumstances, it can be extremely difficult, if not impossible, to determine the ROI of an individual marketing activity. Many marketing activities do not produce revenues on their own. They must be combined with other activities to generate revenues. When a marketing activity is one of several interdependent activities that are all required to entice prospects to buy, you can measure the ROI of the whole group of activities, but not of any one of those activities.

This does not mean that you can't measure the performance of individual marketing activities. For example, you can and should measure the performance of your lead nurturing program by comparing the conversion rates of prospects who are nurtured with those who aren't. There are many metrics that can be used to evaluate the performance of marketing activities and programs, but you can't always use ROI.

OK, the title of this post may be a little misleading. ROI should be used in marketing whenever and wherever it's appropriate. Just don't try to use it everywhere.

Finding the Gaps in Your Marketing Content

2012-01-17T15:12:00.000-06:00

Do you have all of the content you need to effectively market and sell your products or services? If you're like most companies I work with, there are probably a few "gaps" in your content. It's important to close these gaps as quickly as possible, but first you need to know what specific types of content are missing from your inventory.

To find the gaps in your marketing content, you need to perform a content audit, and the basic process for an audit is shown in the following diagram.

If you'd like to learn more about creating buyer personas, defining buying process stages, and identifying buying stage questions, please take a look at our white paper titled Two Powerful Ways to Make Your Marketing More Relevant. (To get a copy of this white paper, just send me an e-mail at ddodd(at)pointbalance(dot)com.) In this post, I want to focus on mapping existing content assets to buyer personas and buying stages.

The purpose of content mapping is to link each of your content assets (white papers, case studies, etc.) to one or more buyer personas and one or more buying stages. The mapping process is easier if done in two stages.

Map Assets to Buyer Personas

The first step is to create a buyer persona map that links your existing content assets to buyer personas. When mapping assets to buyer personas, the basic question you ask is whether an asset contains content that will appeal to a given buyer persona. Does the asset address issues that will be relevant to the buyer persona? Is the asset targeted for the persona's job title and industry? Does the asset focus on the specific problems and challenges facing the buyer persona?

I use a simple spreadsheet to create a buyer persona map. The first column of the buyer persona map contains the title or a brief description of the asset, and the second column is used to identify the asset type (a white paper, a case study, etc.). An additional column is used for each buyer persona. Each content asset is entered on a separate row in the map. The example below shows what the beginning of a buyer persona map would look like. In this example, no content has been mapped to Buyer Persona 4. If you complete your buyer persona map and have any buyer personas with no assigned assets, you obviously have a major gap in your content.

Map Assets to Buying Stages

The second step in the process is to create a buying stage map that links your content assets to specific stages in the buying process. When mapping assets to buying stages, the basic test is whether the asset contains content that answers the major questions that a potential buyer will have at that stage of the buying process.

In this step, you'll need to create a buying stage map for each buyer persona. Once again, I use a simple spreadsheet to create the buying stage maps, and a highly simplified version of a buying stage map is shown below. The first two columns in the buying stage map are the same as those used in the buyer persona map. In the buying stage map, an additional column is used for each stage of the buying process. To create a buying stage map, first select a buyer persona, then go to your buyer persona map and identify all of the assets that you have mapped to your selected persona. List those assets in your buying stage map and link each of those assets to one or more buying stages. Repeat this process until you have a buying stage map for each of your buyer personas.

When you complete this mapping process, you'll have a clear picture of where the gaps in your marketing content are and what kinds of content you need to fill the holes.

Why Persistence is Key to Effective Lead Acquisition

2012-01-09T15:46:00.000-06:00

If you're like most marketers, lead generation will be one of your primary marketing objectives for 2012. Consistently acquiring enough new leads has become a major challenge for many B2B companies. Because business buyers now have access to a wealth of online information, they can easily perform research and gather information about products and services on their own. This makes them less likely to respond to lead generation campaigns.

The lead generation challenge is not entirely new. Lead generation has always been a numbers game to some extent. The old saying - "To find a prince, you have to kiss a lot of frogs." - is an apt description of the lead generation process. Empowered and independent buyers make the job even more difficult than it was in the past.

There is no simple solution for the lead acquisition challenge and no silver bullet that will completely eliminate the "frog kissing." There are, however, several steps you can take to improve your lead acquisition efforts.

First of all, it's critical to have an inbound marketing program that's appropriate for your business. Inbound marketing techniques are designed to make your company easy to find when a potential buyer starts to look for the kind of solution your company provides. In today's environment, not having a good inbound marketing program is the equivalent of not having a line in the water when you're over a school of fish in a feeding frenzy. I'll have more to say about inbound marketing in a future post.

There are also several ways to improve your outbound lead acquisition marketing. These are basic, well-known marketing principles, but they're worth repeating.

Define your target market - Understand what kinds of companies and buyers make your best prospects and focus your lead acquisition efforts on those buyers.
Use accurate data - Make sure that your prospect contact information is accurate. If you're planning to purchase or rent a mailing list, check the track record of your list provider for accuracy.
Make your offers as relevant as possible - Even at the lead acquisition stage, you should know several things about your target audience, such as the kinds of companies they work for and their job titles. Use that information to customize your offers to make them more relevant and compelling.

Following these three principles will make your lead acquisition efforts more effective. But there's a fourth component of effective lead acquisition that's equally important - persistence.

In the 1930's, the film industry conducted research and concluded that, on average, a person had to see seven advertisements for a movie before he or she would buy a ticket. Over time, this concept became widely used throughout the marketing industry and came to be known as the Rule of 7. In its current incarnation, the Rule of 7 says that a potential buyer must be exposed to a marketing message seven times before he or she will respond.

Seven may not always be the right number, but it's undeniable that it takes more than one offer to entice most potential buyers to respond. This is especially true in lead acquisition, where you are reaching out to potential buyers who may know very little about your company.

So, you need to treat lead acquisition as an ongoing process - a series of planned contacts that are regular and relatively frequent - rather than as a one-time campaign or sporadic event. When it comes to marketing in today's environment, the old saying needs to be expanded a bit: "To find a prince, you have to kiss a lot of frogs, and you usually have to kiss the frogs more than once."

More Work is Needed to Maximize the Potential of Content Marketing

2012-01-02T07:17:00.000-06:00

Last month, the Content Marketing Institute (CMI) and MarketingProfs published B2B Content Marketing: 2012 Benchmarks, Budgets, and Trends. This report is based on an August 2011 survey of almost 1,100 marketers, and it provides a great snapshot of the current state of B2B content marketing. CMI and MarketingProfs performed a similar survey in 2010, so some year-to-year comparisons can be made.

In many ways, this survey confirms what we already knew - that content marketing is now a core component of an effective B2B marketing program. Consider just a few of the major survey findings:

Nine out of ten B2B marketers are using some form of content marketing.
The top content marketing tactics (by usage) are articles (79% of respondents), social media other than blogs (74%), blogs (65%), eNewsletters (63%), and case studies (58%).
Comparing 2011 to 2010, the use of blogs and videos both increased by 27% and the use of white papers grew by 19%.
Companies are spending about 26% of their marketing budgets on content marketing efforts, and 60% of respondents said they will increase spending on content marketing in 2012.

Overall, the survey results show just how vital content marketing has become for B2B companies. But some of the survey findings also reveal that B2B marketers still have work to do to realize content marketing's full potential.

For example, when survey participants were asked to identify their business goals for content marketing, 68% cited both brand awareness and customer acquisition, and 66% selected lead generation. Only 39% of survey respondents identified lead management and lead nurturing as a primary content marketing goal. In fact, lead management/nurturing was the lowest ranking goal identified by respondents. This result may be due in part to the characteristics of the survey respondents, but I suspect it is primarily due to the fact that many companies have not implemented lead nurturing programs. Therefore, many marketers don't fully appreciate the essential role that content plays in effective lead nurturing.

The CMI/MarketingProfs survey also reveals that more work is needed to make marketing content relevant to potential buyers. When asked about how they segment or tailor their content, 57% of respondents said they use profiles (job titles, personas, etc.) of decision makers, and 51% said they use company characteristics (size, industry, etc.). However, only 39% of respondents said they tailor content for specific stages of the buying process, and 12% of respondents do not tailor their content in any way.

For content to be truly compelling, it must answer the questions that are most important to buyers at a specific point in the decision-making process. And, those questions change as buyers move through the buying process. So, the most compelling content is designed for specific buying stages.

The use of stage-specific content is one defining characteristic of an effective content marketing program. The CMI/MarketingProfs survey asked participants to rate the effectiveness of their content marketing efforts on a scale of 1 to 5. Forty-five percent of those respondents who rated their efforts as "effective" or "very effective" (4 or 5) said they tailor content for specific buying stages. Only 29% of the respondents who rated their efforts as ineffective (1 or 2) said they use stage-specific content.

If you're thinking about beginning a content marketing program, this survey is a great resource for learning about what is working. If you're already using content marketing, this is a great tool for benchmarking your efforts.

Five Ways to Improve Your Marketing in 2012

2011-12-27T15:00:00.000-06:00

Bloggers love lists, and we're told that blog posts with titles like, "Five Secrets to. . ." or "Four Sure-Fire Tactics for. . ." are appealing to readers. Bloggers who write about business also seem to share another characteristic. About now, many feel compelled to make predictions about the new year. When you combine these inclinations, the results are lots of blog posts with titles like, "Six Game-Changing Marketing Trends for 2012,"

I'll leave the prognostications to others, but I will offer a list. I have five recommendations for improving your marketing efforts in 2012.

Before you do anything else, develop a marketing strategy.
You've heard this one before, so I won't repeat all of the reasons that strategy is necessary for success. At its most basic level, marketing strategy is a simple thing for most B2B companies. First, you need to identify all of the significant ways that your product or service can create value for customers and identify the kinds of companies that can obtain the greatest value by purchasing and using your product or service. Second, you need to determine the best ways for communicating your value propositions to potential buyers. This step includes the selection of marketing tactics and channels and the creation of marketing messages. Companies tend to spend most of their time and attention on step two, but step one is even more important. I discussed the "value identification" aspect of marketing strategy in an earlier post titled How to Make Difficult Marketing Questions Easier to Answer.

Shift primary responsibility for lead generation from sales to marketing.
I've explained my rationale for this recommendation in two earlier posts - Stop Depending on Your Salespeople to Generate Leads and Why Marketing Should Take the Lead in Lead Generation. I don't contend that traditional sales prospecting doesn't work at all or that you should completely abandon it. I do contend that traditional sales prospecting is an inefficient use of resources and that you should strive to become less dependent on it.

Increase the number of leads acquired via inbound marketing.
There is little doubt that inbound marketing has become the tactic of choice for lead acquisition. Buyers now control the buying process, and they are performing research and gathering information about products and services on their own, usually via the Web. Therefore, traditional outbound lead acquisition techniques such as direct mail and e-mail don't work as well as they once did. It's just good sense to make yourself easy to find when a prospect begins looking for the kind of solution you provide. Research firm SiriusDecisions says that 80% of new sales leads will come from inbound marketing by 2015. Your objective for 2012 should be to substantially increase the number of leads and the percentage of total leads acquired via inbound marketing.

Develop and implement a sound lead management process.
Consider these facts: (1) Acquiring new leads is becoming increasingly difficult. (2) 50%-75% of new leads are qualified but not ready to buy. (3) Up to 70% of these lukewarm leads will eventually buy from someone. Put these facts together and one thing is clear - leads are valuable and must be managed with care. An effective lead management process will address several key issues, including lead nurturing, lead scoring, and marketing and sales alignment. A well-designed lead management process will enable you to maximize the sales you obtain from your pool of leads.

Implement a content marketing program.
Having and using the right kind of content is now essential for B2B marketing success. By "the right kind of content," I mean marketing content that is:

Primarily educational and non-promotional
Customized for the types of buyers you sell to
Customized for where the potential buyer is in his or her buying process

I've discussed these requirements in a white paper titled, Two Powerful Ways to Make Your Marketing More Relevant. If you haven't already seen this paper and would like to get a copy, just send an e-mail to ddodd(at)pointbalance(dot)com.

That's my list. Do you have other plans to improve your marketing in 2012?

Four Tips for More Effective Business Blogging in 2012

2011-12-13T14:35:00.000-06:00

With the end of 2011 less than three weeks away, most of you are probably well into planning your marketing programs for 2012. If you don't already have a blog, you should plan to begin one next year. If you already have a blog but you haven't been posting to it frequently, you should make that a priority in 2012.

As I wrote in an earlier post, a blog can be a highly effective marketing channel. It provides a great way to introduce prospects to your company and your content, and it can improve your organic search results. To maximize the benefits of your blog, you must post new content regularly and frequently. Therefore, publishing an effective blog requires a commitment of time and attention.

The suggestions I'm including in this post are the result of first-hand experience. I launched this blog in early 2010. For the first three months or so, I added new content frequently, but then I ran out of steam. By mid-August, I had stopped posting entirely. After a hiatus of about nine months, I "relaunched" the blog in May of this year. This time, I had a better plan, and the plan has worked well.

There are several keys to successful blogging, but these four are among the most important.

Create a schedule and stick to it. Writing a blog post is a task that's easy to put off. So, to be successful, create an "editorial calendar" for your blog that contains specific publication dates. Just saying "twice a month" isn't specific enough. Posting regularly is almost as important as posting frequently. So, start with a schedule that you feel comfortable with (as long as you are posting at least twice per month). You can increase the frequency as you get accustomed to writing posts.

Create and maintain a "reserve" of completed posts. Before launching your blog, write enough posts to fill your schedule for at least two months. This will give you some breathing room before you need to create additional posts. In addition, you should always maintain a "reserve account" that contains one or two months of completed posts. If you run into a "dry spell," this reserve will give you some time to work through it.

Always be looking for topics. One of the biggest challenges for any blogger is identifying enough topics to write about. This can be particularly intimidating when you're just getting started. I don't have a silver bullet for this challenge, but I can offer a few suggestions:

Tap internal resources - Get all of the people in your company involved in suggesting topics.
Use your experience and read - The inspiration for my posts comes from two primary sources - my work with clients and what I read. If you're involved in a major project for a client, use that experience to create one or more posts. It's also important to read other blogs in your field regularly. On several occasions, I've been inspired to write a post by one sentence I've read in another blog.
Write down your ideas - Whenever you think of a topic for a post, take a moment to write a couple of sentences that capture the essence of your idea. Don't be judgmental, just get the idea down on paper. Some of these ideas won't work out, but some will.

Promote your blog. To attract readers to your blog, you'll want to use two basic strategies. First, you'll want to configure your blog so that readers can subscribe via both RSS and e-mail. You'll also want to configure your blog so that "social sharing" buttons are included in every post. Second, every time you publish a post, be sure to announce the new post in appropriate social media venues. Since I have relaunched this blog, I have followed this practice religiously. Every time I publish a post (including this one), I announce it in appropriate discussion groups at LinkedIn, and I tweet about it 4-6 times. Since following this process, the readership of this blog has increased by 400%-500%.

Effective blogging requires work, but the more organized you are, the easier the work becomes.

It's Time to Fix the Marketing Supply Chain

2011-12-04T12:10:00.000-06:00

Improving the productivity of the marketing supply chain probably won't be near the top of most marketers' list of new year's resolutions for 2012. Marketers are facing extraordinary pressures to drive increased revenues and maximize the return produced by every dollar invested in marketing. So, it's understandable that they focus most of their attention on developing more effective marketing campaigns, creating more compelling content, and generating more qualified sales leads, rather than on "mundane" issues like the production and distribution of marketing consumables.

In reality, however, the marketing materials supply chain represents a large, and largely untapped, source of both cost savings and revenue-enhancing improvements. The marketing supply chain in most companies is highly fragmented and filled with manual, inefficient processes that result in excessive costs and a lack of both responsiveness and reliability. If not completely broken, the average marketing supply chain is dysfunctional and in serious need of repair.

Research by the Chief Marketing Officer (CMO) Council and Forrester Consulting (part of Forrester Research) shows both the economic significance of the marketing materials supply chain and the opportunities for improvement.

A majority of companies spend at least 20% of their marketing budget on marketing consumables, and almost a third of companies devote at least 30% of their marketing budget to such materials. (CMO Council)
Four out of five companies distribute marketing collateral documents and similar materials to salespeople and other sales channel participants, and a majority of companies distribute such materials on at least a weekly basis. (22% distribute on at least a daily basis) (Forrester Research)
Just 25% of marketers have performed a comprehensive analysis of the costs and process efficiencies in their marketing materials supply chain, and only 11% have implemented new workflow systems to reduce costs and inefficiencies. (CMO Council)
Fifty-nine percent of salespeople and other sales channel participants still rely on e-mail to request marketing materials, and nearly half (47%) still rely on telephone requests. (CMO Council)
Sixty-five percent of salespeople say they over-order and stockpile marketing materials because it takes too long to receive ordered materials. (CMO Council)
Only 17% of companies are using eStores or sales portals to support their marketing fulfillment process. (Forrester Consulting)

The good news is that companies no longer need to tolerate an ineffective and inefficient marketing supply chain. Marketing asset management technologies, combined with on-demand manufacturing capabilities and state-of-the-art warehousing, inventory management, and fulfillment services, can eliminate waste from the marketing supply chain, while simultaneously improving responsiveness and reliability.

To determine how much your company would benefit from an improved marketing supply chain, you need to perform a comprehensive audit that identifies the strengths and weaknesses of your current supply chain. Such an analysis will also enable you to quantify the cost savings and other benefits that an optimized supply chain would provide. You'll probably be surprised by the results. Even in relatively small companies, we've seen benefit values that reach well into six figures.

We've developed a process for quantifying the major cost savings that a "marketing asset management solution" will produce. This doesn't take the place of a comprehensive supply chain audit, but it is a good way to begin your evaluation. If you'd like to see a sample version of our cost savings calculator, send an e-mail to ddodd(at)pointbalance(dot)com.

Why Customers Should Be the Heroes of Your Case Studies

2011-11-27T14:05:00.001-06:00

Customer case studies are one of the most popular and influential kinds of marketing content used by B2B companies. New research by Eccolo Media shows that case studies are the fourth most widely consumed type of marketing collateral (behind product brochures, white papers, and video/multimedia files) and the second most influential type of marketing collateral (trailing only white papers).

Case studies are potent marketing tools because they're good at performing several jobs.

They help establish your credibility.
They educate prospects about the benefits of your product or service.
Most importantly, they can lower a prospect's perception of the risk associated with purchasing your product or service.

The good news is that case studies can boost the effectiveness of your marketing efforts. The not-so-good news is that the use of case studies has exploded, and therefore your case studies are facing more competition for attention and mindshare. If they don't stand out from all the others your prospects see, they simply won't produce the maximum benefits.

I'm often asked by clients to review and comment on their customer case studies. All too often, what I read is self-promotional "brochureware" disguised as a case study.

The mistake that many companies make is to cast themselves, rather than their customers, as the heroes of their case studies. The storyline in many case studies resembles the old silent movie where the villian ties a helpless damsel (the customer) to the railroad tracks, and the hero (the selling company) rides in at the last minute to rescue the damsel in distress from an oncoming train.

A well-written case study will cause readers to identify with the customer. You want readers to empathize with the "pain" the customer was experiencing and the success the customer achieved. In essence, you want readers to finish the case study believing that they can achieve the same success, if they will just let you help. When you make yourself the hero of your case studies, you are asking readers to identify with your company, not the customer. And that's much more difficult to achieve.

It's easy to tell when the selling company has made itself the hero of a case study. Lots of sentences begin with "We" or "Our" and the story focuses on what the selling company (or its product or service) did rather than on what the customer was able to accomplish.

So, when you prepare a case study, you can give yourself a strong supporting role, but always let your customer be the star.

We've created a "mini-guide" to writing compelling customer case studies. If you'd like to get a copy of Seven Tips for Writing Customer Case Studies that Sell, send an e-mail to ddodd(at)pointbalance(dot)com.

What "The Challenger Sale" Can Teach Us About Content Marketing

2011-11-15T10:18:00.000-06:00

The Challenger Sale by Matthew Dixon and Brent Adamson is one of the most important books on selling that's appeared in the last several years. The book is based on an in-depth research project conducted by the Corporate Executive Board. The research involved an analysis of over 6,000 sales reps from all major industries and geographies.

The objective of the CEB research was to identify what skills, behaviors, knowledge, and attitudes separate top-performing sales reps from average performers. What the researchers found runs counter to much of the long-held conventional wisdom about what drives sales success.

The first major finding is that salespeople fall into one of five distinct profiles:

The Hard Worker
The Challenger
The Relationship Builder
The Lone Wolf
The Reactive Problem Solver

The second important finding is that one type of sales rep - The Challenger - clearly outperforms all of the others. Thirty-nine percent of all "star" salespeople are Challengers. One of the major surprises in the research is that Relationship Builders are the big losers. Only 7% of all star reps fall into that category.

The Challenger Sale is written from a sales perspective, but it has a lot to say to marketers. The connection to marketing becomes clear when we look at what causes Challenger sales reps to be successful. Dixon and Adamson found that Challenger reps excel because they provide customers and prospects new, valuable, and unique insights that help them compete more effectively in their markets. Challengers pressure their prospects and customers to question their assumptions and think about their business in new and different ways.

It turns out (as shown by other Corporate Executive Board research) that this is what prospects and customers really want. Buyers say they highly value sales reps who:

Offer unique and valuable perspectives on the market
Help them navigate alternatives
Provide ongoing advice or consultation
Help them avoid potential land mines
Educate them on new ideas and outcomes

These are exactly the things that Challenger sales reps do. Rather that just asking a bunch of questions to identify needs and then offering a solution, Challengers bring new insights (and therefore value) to the conversation with the buyer.

Today, marketing content must perform many of these same functions. Because business buyers are doing more research on their own, your marketing content must act as your "surrogate sales rep" early in the buying process. This research shows that your content needs to be a "surrogate Challenger sales rep."

Those of use who write about content marketing emphasize the importance of using content that is primarily educational, that is customized for specific buyer personas and that speaks to where a potential buyer is in his or her buying process. All those things are important, but what really separates great marketing content from content that is merely good is that great content also provokes new thinking. Great marketing content provides unique and valuable perspectives that prod potential buyers to consider new alternatives for improving their business.

How much of your marketing content would pass the "Challenger" test?

Why a Blog (Still) Matters in Marketing

2011-11-08T15:57:00.000-06:00

B2B marketers have more ways than ever to publish and share marketing content. LinkedIn, Facebook, Twitter, YouTube, Slideshare, and Scribd are just some of the venues for disseminating your content to prospects and customers. With all of the options now available, it can be tempting to think that blogging is no longer important to your marketing efforts.

That's a mistake. A blog can still be a highly effective marketing tool. In the 2011 State of Inbound Marketing survey by HubSpot:

57% of companies that publish a blog said that they have acquired new customers from blog-generated leads
62% of companies with a blog said that it is "critical" or "important" to their business

Here are just a few of the benefits that a blog provides:

A blog is an ideal vehicle for providing your prospects with bite-size pieces of your marketing content. Today's business buyers are incredibly busy, and many prefer content that can be consumed quickly. This can be particularly important when you are dealing with prospects who don't know you well. A blog provides a way for them to try out your content without investing a lot of their time.
A blog is one of the best ways to improve your company's position in organic search. Google and other search engines place a big emphasis on how frequently content is updated. So, if you post to your blog regularly, you can improve your search results.
Your blog can be used to point prospects to more substantial marketing content. For example, you can use a blog post to summarize a topic covered in one of your white papers and include a link to the paper in your post.
Your blog can function as a hub for your content marketing effort. For example, when you publish a new blog post, you can use LinkedIn, Twitter, and Facebook to point to the post.

The catch is that just having a blog isn't enough. To reap the most benefits from your blog, you need to post new content on a frequent basis. The HubSpot survey shows that 72% of companies that post weekly have acquired new customers through their blog. That number increases to 78% for companies that post daily, but it falls to only 49% for companies that post monthly.

Posting on a weekly basis can be challenging for many companies, but there are a couple of ways to deal with the challenge. First, you can outsource some or all of the blog writing duties. In this scenario, blog posts are prepared by an outside writer, but they are published under your "byline." The second approach is to use "guest bloggers" to write some of the posts for your blog. This approach can be effective, so long as it isn't overused. After all, one primary objective of your blog is to demonstrate your expertise, not someone else's.

Marketing Collateral Remains Critical (But Buyers' Preferences are Changing)

2011-10-30T13:55:00.000-05:00

Earlier this month, Eccolo Media released its 2011 B2B Technology Collateral Survey Report. This survey focused on business buyers who had been involved in a recent purchase of business technology, and it was designed to measure the use and influence of five types of marketing collateral.

Product brochures/data sheets
White papers
Customer case studies
Podcasts/audio files
Videos/multimedia files

This survey was limited to technology buyers, so the results may not reflect the attitudes and practices of all B2B buyers. On the other hand, it's probably fair to say that technology buyers as a group tend to be "early adopters" of new communications methods. Therefore, the findings of this survey may provide a good early indication of how other kinds of B2B buyers will use and value marketing collateral in the near future. You can obtain a copy of the survey here, and I encourage you to review it.

The 2011 survey revealed a surprising shift in the consumption of some types of marketing collateral, so surprising that Eccolo Media conducted a follow-up survey to gain additional insights. (Note: Eccolo Media has conducted this survey since 2008, so year-to-year comparisons can be made.) I'll describe the change in consumption patterns, but first here are some of the major survey findings.

Product brochures/data sheets are the most widely consumed type of marketing collateral, followed (in order) by white papers, video/multimedia files, case studies, and podcasts/audio files.
Marketing collateral continues to have a major influence on purchase decisions. At least 61% of survey respondents said that all five types of collateral were "very" or "extremely" influential.
White papers remain the most influential type of marketing collateral.

The surprise in the survey was a significant drop in the consumption of some types of marketing collateral. Compared to 2010, the consumption of customer case studies fell 17 percentage points, white papers declined 14 percentage points, and product brochures/data sheets decreased 11 percentage points.

These results do not mean that case studies, white papers, and product brochures are becoming less critical to effective marketing. The follow-up survey conducted by Eccolo Media addressed five additional types of marketing collateral - company Web pages, social media sites, blog posts, e-books, and presentations. It showed that buyers are using all of the "new" types of content to research business issues and learn about products and services.

So, what's happening is that companies are offering marketing content in a wider variety of formats, and buyers are taking advantage of the expanded options to consume content in the format they prefer.

The results of these surveys contain three important lessons for B2B marketers.

Informative, valuable, and compelling marketing content is more critical than ever for successful B2B marketing.
The number of content formats available to companies is increasing, and many of the newer formats are attractive to potential buyers.
It's becoming important to deliver the same basic content message in a variety of content formats. For example, B2B buyers view white papers as highly influential because they present valuable information in a objective, non-promotional way. This type of information is still essential for marketing success, but it's now important to embody that information in Webinars/Webcasts, podcasts, and presentations, as well as in white papers.

Building the Business Case for Marketing Asset Management

2011-10-19T06:09:00.000-05:00

Even if you're certain that a marketing asset management solution would be beneficial for your company, you'll still be required to justify the investment to your senior management team. Today's business decision makers are more skeptical and frugal than ever. They are demanding that any investments they make produce positive, measurable results on the bottom line - and the faster the better. An investment in a proposed MAM solution will be viewed no differently.

To get the go-ahead for a marketing asset management solution, you'll need to present your senior leaders a business case that demonstrates the value of the solution in clear and convincing terms.

A well-prepared business case for a marketing asset management solution will contain five components.

A description of the problems, issues or challenges that create the need for an MAM solution
A description of the proposed MAM solution
The expected financial results of acquiring and implementing the proposed solution
A discussion of the non-financial benefits the proposed solution will produce
A discussion of the risks associated with the proposed solution and the risks of not acquiring the MAM solution

All of these components are important, but the focal point of a business case is the financial analysis. This is where you will calculate the estimated ROI, net present value, and payback period for the proposed MAM solution. Both the ROI and the net present value calculations require you to input the value of the MAM solution. Therefore, one key to building a persuasive MAM business case is to develop a credible estimate of that value.

Like any business product or service, a marketing asset management solution creates value by enabling a company to reduce existing costs, avoid future costs, or increase revenues. To estimate the value of your proposed solution, you'll need to analyze the two major types of benefits that MAM solutions typically provide. One group of benefits includes those that improve the efficiency of the marketing materials supply chain. These benefits create value primarily by enabling you to reduce or avoid costs. The second group of benefits include those that improve the effectiveness of your marketing efforts. These benefits create value primarily by enabling you to increase revenues.

I've just released a new white paper that describes these benefits in greater detail and explains how to calculate their value when building business case for marketing asset management. If you'd like to review the new paper, send an e-mail to ddodd(at)pointbalance(dot)com.

When Content Marketing Really Matters

2011-10-11T15:30:00.001-05:00

Content marketing has become an essential marketing tactic for many B2B companies. According to research by Junta42 and MarketingProfs, nine out of ten B2B companies now market with content.

Content marketing is the practice of providing valuable and primarily non-promotional information to potential buyers for the purpose of persuading them to begin or continue a relationship with your company. The basic idea of content marketing is to provide information that will demonstrate your company's expertise and create or nurture the perception that your company would be a knowledgeable, capable, and reliable business partner.

Most marketing thought leaders agree that effective marketing content is critical for B2B marketing success. Marketing content provides the fuel for lead generation and lead nurturing programs, it is a critical component of a company's website, and it plays a central role in social media marketing efforts.

All B2B companies can benefit to some extent from using content marketing, but it is more critical for some kinds of companies than others. There are six circumstances that make content marketing particularly important and highly valuable.

When the product or service you provide is complex (technologically or otherwise), or when the product or service addresses a complex business problem, issue, or challenge.
When purchasing your product or service requires a substantial financial investment by the buyer.
When the buyer must rely on your expertise to achieve success with your product or service.
When the purchase and use of your product or service requires the buyer to make significant changes in its business processes.
When the purchase of your product or service requires (formally or practically) a long-term commitment by the buyer.
When the product or service you offer is not purchased frequently, and potential buyers have little or no experience with the type of product or service you provide.

The connection between content marketing and the first circumstance is obvious. When potential buyers are trying to address a complex problem or challenge or evaluate a complex product or service, they need a lot of information to help them understand the ramifications of the problem or challenge, how the product or service works, and what benefits the product or service will provide. Content marketing is the most effective way to provide prospects the needed information.

The other five circumstances all relate to the buyer's perception of risk. We now know that fear is the most powerful emotion at work in the B2B buying process. Business buyers can be extremely risk averse, and they aren't likely to move forward with a purchase until the perceived risks have been eliminated or reduced to an acceptable level. Content marketing is a highly effective tool for mitigating the risks perceived by your potential buyers. For example:

White papers, articles, and webinars can be used to demonstrate that your company understands the issues and problems your buyers are facing and knows how those issues or problems can be successfully addressed.
Customer case studies can be used to show how similar businesses have used your product or service to solve difficult problems and/or reach significant business objectives.
Value justification tools and ROI calculators can be used to quantify and prove the value of your product or service.

If some or all of these six circumstances apply to your company and your marketing and sales environment, content marketing should be at the core of your marketing efforts.

How Content Marketing Accelerates the Buying Process

2011-10-02T12:44:00.000-05:00

Today's business decision makers are more skeptical, more frugal, and more easily distracted than ever. As a result, it's harder to create engagement with potential buyers, sales cycles are longer, and sales opportunities that once appeared solid can unexpectedly fall off the tracks.

Overcoming these challenges is not easy, but the starting point is to recognize that the single most important job of marketing and sales is to remove friction from the buying process.

In military science, friction is the term that's used to describe anything that can get in the way of the perfect execution of a military operation. Therefore, friction includes things like the effects of weather on soldiers and equipment, soldier fatigue, misinterpretation of orders, equipment breakdowns, and unexpected enemy actions. Because of friction, no military operation goes exactly according to plan, even though commanders try very hard to anticipate where and how friction will arise and to devise ways to minimize its effects.

In B2B marketing and sales, friction is anything that slows down or stops a potential buyer's progression through the buying process. The friction gremlins live everywhere in the buying process. Friction can (and usually does) pop up at every stage of the process, and many of the causes are beyond your control. For example, any of the following unforeseeable and uncontrollable events can delay or stall the buying process.

A change in the prospect's business condition
A change in the make-up of the prospect's senior management team
A change in the prospect's business strategy
The illness of a key decision maker

While it's not possible to anticipate or eliminate all of the friction from the buying process, you can substantially reduce it. Many major causes of friction are related to information. To keep moving through the buying process, potential buyers need the right information at the right time. When they don't get that information, the buying process can stall. For example, a potential buyer's progression through the buying process can be slowed or stopped if he or she:

Doesn't understand or appreciate the costs or negative ramifications of the status quo
Doesn't know or fully understand how the status quo can be changed or improved
Perceives that the proposed purchase will involve substantial risks
Doesn't have an accurate picture of the ROI that the proposed product, service, or solution will generate

All of these issues can usually be resolved with appropriate and persuasive information.

Both marketing and sales are responsible for reducing friction in the buying process, but marketing's share of the job has grown significantly because of changes in buying behavior. Today's business buyers are performing more research on their own, and they are postponing conversations with sales reps until later in the buying process. In a recent survey by DemandGen Report, 77% of B2B buyers said they did not engage with a sales rep until after internal research was conducted, and 36% of buyers said they didn't engage with a salesperson until after a preferred list of vendors was established.

With potential buyers avoiding and/or delaying interactions with salespeople, marketing content must be the primary tool for eliminating friction from the buying process. In fact, marketing content is often the only effective tool for dealing with the friction that arises in the early stages of the process.

Today, many marketing and sales "gurus" are offering a variety of techniques that promise to accelerate the buying process. My take is that it is rarely possible to push prospects through the buying process any faster than they are willing to move. The best way, therefore, to accelerate the buying cycle is to use relevant and compelling content to eliminate or reduce the friction that slows prospects down.

How to Choose the Right Marketing Asset Management Solution

2011-09-20T19:15:00.000-05:00

Implementing a marketing asset management solution is a big step for most companies. Not only does it represent a significant financial investment, it also requires you to change the processes you use to acquire, manage, and distribute marketing materials. In some cases, it can change how you execute direct marketing campaigns and programs.

To select the right MAM solution, you need to determine what capabilities and functionality you need and then make sure you ask prospective solution providers the right questions.

There are four key issues that all companies should address when evaluating potential MAM solutions.

Solution Use and Scope - How will the MAM solution be used? Put another way, what kinds of materials will be included in, and managed through, the MAM solution? How you answer this basic question will determine how many and what kinds of individuals need access to the solution, and it will greatly influence what functional capabilities you need in your solution. The obvious answer here is marketing materials (marketing collateral documents, promotional items, point-of-sale materials, etc.). When you're evaluating potential MAM solutions, however, consider what other kinds of materials your solution could be used to manage. Some examples would include:

Direct marketing campaign materials
Sales support materials (presentations, proposal templates, etc.)
Administrative/technical/human resources documents
General business supplies

Solution Reliability and Responsiveness - How reliable and responsive must the MAM solution be to meet your needs, and will prospective solution providers offer appropriate service level guarantees? For most companies, the two most important performance attributes of a marketing asset management solution are system uptime and order turnaround time. These attributes are critical because the success of your MAM deployment ultimately depends on the willingness of your users to rely on the MAM solution for their needs. If your users know that the solution will be available when they need it and that the materials they order will be delivered quickly, they will be more likely to use the solution consistently.

Incorporation of Business Rules - Can the MAM solution be customized to incorporate and enforce your business rules and control mechanisms relating to the acquisition and use of marketing materials? A capable solution provider should be able to customize the MAM solution to incorporate the control mechanisms you need, but this issue should be addressed early in your evaluation process.

Reporting Capabilities - Does the MAM solution provide all of the reporting capabilities that your company needs?

Of course, your evaluation process should not be limited to these four issues. Your company's particular characteristics and needs will point to other issues that you should address when selecting a marketing asset management solution.

To help jumpstart your evaluation process, we've just published a white paper that contains twenty-three critical questions you need to ask when choosing a marketing asset management solution. If you'd like to review a copy of our new white paper, send an e-mail to ddodd(at)pointbalance(dot)com.

It's Time to Combine Marketing and Sales

2011-09-11T20:41:00.000-05:00

Suppose you were hired to design and implement an entirely new demand generation system for a large or mid-sized B2B company. The board of directors and the CEO have given you a free hand to develop whatever kind of system you believe will produce the best results. There are no pre-conceived ideas about what tactics should be used or what organizational structure the demand generation system should take.

When I work through this mental exercise, I can identify several things that would be part of my ideal demand generation system. It would certainly contain a robust lead management process (lead nurturing, lead scoring, lead routing, etc.) that is supported by the right technology tools. Content marketing would play a prominent role, as would social media. I would also include processes and tools for demonstrating the value/ROI of my products or services.

However, one of the biggest steps I would take is to combine marketing and sales into one organizational unit. Not that long ago, having separate marketing and sales departments caused few major difficulties. The traditional roles and responsibilities of marketing and sales in most B2B companies were distinct, and the people in both departments could perform their jobs fairly effectively without a huge amount of day-to-day interaction and collaboration. In other words, having marketing and sales in separate management "silos" didn't significantly impair company performance.

Times (and circumstances) have changed, and it's now critical for "marketing" activities and "sales" activities to be closely coordinated. Buyers expect their potential suppliers to speak with one, consistent voice, and they expect everyone they deal with in an organization to know what interactions have already occurred and what information has been exchanged.

Both marketers and sales professionals now recognize the importance of aligning the efforts of marketing and sales. This has become a hot topic at marketing and sales conferences, and it's been written about in numerous venues. Many experts are advocating that marketing and sales should spell out their responsibilities and relationship in a formal service level agreement. That's a good idea, but why not take the next logical step?

The American architect Louis Sullivan said that "form" should follow "function." Marketing and sales are interdependent components of a single demand generation process. Therefore, they should be part of a single organizational unit for management, planning, and budgetary purposes.

In lean management terms, marketing and sales are components of the same value stream. A value stream is the set of activities that are required to produce value for customers. Lean management recognizes that it is the output/performance of complete value streams that creates value for customers and profits for a company. Therefore, mature lean organizations manage their operations by value streams rather than by traditional functional departments.

In the case of marketing and sales, the "customer" is the company itself, and the "product" is revenue dollars. The sole objective of the demand generation value stream is to produce revenues for the company, and achieving this objective requires an integrated set of marketing and sales activities. Having "good" marketing and "good" sales is important, but what really matters is the performance of the entire demand generation value stream. To optimize that performance, it must be treated and managed as a single process.

Combining marketing and sales may be a controversial idea, and it would be difficult to implement in many companies for cultural and "political" reasons. But the logic is compelling, and just because something is hard to do doesn't mean that it shouldn't be done.

What do you think? If you had a free hand, would you consider merging marketing and sales in your company?

Is a Marketing Asset Management Solution Right for Your Business?

2011-08-31T16:20:00.000-05:00

Prompted by growing demands from the corner office, marketers in all kinds of companies are seeking innovative ways to improve marketing productivity. Today, a growing number of companies are turning to marketing asset management solutions to increase the effectiveness and efficiency of the marketing function.

A comprehensive marketing asset management solution combines technology tools, manufacturing capabilities, and fulfillment services to automate and streamline many of the processes relating to the acquisition, management, and distribution of marketing materials. MAM solutions can also provide a powerful platform for creating and executing direct marketing campaigns and programs.

In the right situations, MAM solutions can produce significant and valuable benefits. For example, they can enable companies to:

Eliminate the internal costs of processing and fulfilling requests for marketing materials
Eliminate the costs of storing marketing materials and free up valuable building space for other uses
Reduce the time required to process and fulfill requests for marketing materials
Greatly reduce the waste (and cost) of marketing materials obsolescence
Reduce the use of obsolete marketing materials by salespeople, channel partners, etc.
Simplify and automate the process of creating and producing customized (and therefore more relevant and effective) marketing materials
Simplify and automate the work required to create and execute customized marketing campaigns and programs in distributed marketing environments

You may be asking: "All this sounds great, but how can I determine if a marketing asset management solution would be a good investment for my business?"

The final determination should be based on a thorough examination of your company's marketing needs and the characteristics of your existing marketing supply/distribution chain. This examination will allow the benefits of a marketing asset management solution to be estimated and quantified based on your unique circumstances.

We've developed a self-assessment tool that's designed to help you begin the process of deciding whether a marketing asset management solution would make sense for your business. This short questionnaire/scorecard is not intended to be comprehensive, and it doesn't answer all of the important questions. The objective is to provide a preliminary indication about whether a marketing asset management solution would be a good investment for your company.

If you'd like a copy of our self-assessment questionnaire, send an e-mail to ddodd(at)pointbalance(dot)com.

What It Takes to Make Marketing Content More Compelling

2011-08-21T13:17:00.000-05:00

There's no longer any doubt that relevant marketing content is essential for B2B marketing success. Business buyers are incredibly busy, and they're exposed to hundreds of marketing messages every day. The only reliable way to cut through the clutter and create meaningful engagement with potential buyers is to provide marketing content that prospects will see as relevant and compelling.

The big question for marketers is, how do we create this kind of content? We often hear or read that the answer is to customize marketing messages and materials for specific buyers. But, what kinds of "customization" will actually increase marketing relevance and effectiveness?

There are two proven ways to make marketing content more relevant and compelling. The first key is to make it easy for prospects to identify with your content. To do this, you'll need content that's customized to fit the personal and professional characteristics of your potential buyers. What jobs do your prospects hold? What kinds of companies do they work for? What size companies do they work for? So, for example, if your target prospects are plant managers in small manufacturing companies, you'll need content that's tailored for that kind of buyer.

This kind of content customization increases what I call personal relevance, and it's proven to increase marketing effectiveness. In research by MarketingSherpa, 82% of business buyers said that marketing content was more valuable when it was targeted to their industry. Sixty-seven percent of buyers said that marketing content was more valuable when it was targeted to their job function, and 49% said the same for content that was targeted to companies of similar size.

The second way to increase relevance is to create and use marketing content that speaks to issues that have immediate importance to your prospects. Most B2B buyers move through an identifiable set of buying stages as they make purchase decisions, and the issues that are most important to buyers will change as they move through the buying process. If your marketing content provides a potential buyer information that's out of sync with his or her decision making process, it's far less likely to capture the buyer's full attention.

The solution is to use marketing messages and materials that are designed for each stage of the buying process. This kind of content customization enhances what I call situational relevance, and it can provide powerful competitive advantage. In a recent survey of B2B buyers by DemandGen Report, 93% of respondents said the solution provider they chose supplied ample marketing content to navigate through each phase of the buying process.

A few weeks ago, I published a white paper that describes these two ways to make your marketing content more relevant. If you'd like a copy of this white paper, send an e-mail to ddodd(at)pointbalance(dot)com.

How Marketing Asset Management Improves Marketing Results

2011-08-09T14:08:00.000-05:00

A growing number of companies are implementing marketing asset management solutions to improve marketing productivity. MAM solutions combine technology tools, manufacturing capabilities, and services to streamline many of the processes relating to the procurement, management, and distribution of marketing materials. They can also provide a powerful platform for creating and executing advertising and marketing programs, particularly direct mail and e-mail marketing campaigns.

Most discussions about marketing asset management solutions focus on how they can reduce costs and improve the efficiency of the marketing supply chain. However, MAM solutions can also improve the effectiveness of marketing activities and programs in three major ways.

Less Use of Obsolete Materials

The obsolescence of marketing materials is a big problem for many companies. In a recent survey by the CMO Council, 40% of respondents said they waste 20% or more of their marketing materials because of obsolescence.

The direct financial costs of obsolescence waste are bad enough, but the consequences of using obsolete marketing materials can be even worse. In a highly competitive business environment, sales can easily be lost if prospects are provided outdated information. And unfortunately, the use of obsolete materials is all too common. In the CMO Council survey, 51% of marketers admitted they had sent materials to customers or prospects that contained outdated content.

Marketing asset management solutions reduce the use of obsolete materials by combining "virtual warehousing," on-demand manufacturing, and rapid fulfillment to eliminate the underlying causes of obsolescence. With a marketing asset management solution, materials are stored in digital form so they can be easily and quickly updated, and MAM solution providers manufacture most materials on an as-ordered basis, so there is no need to maintain inventories that can become obsolete.

More Relevant Marketing Materials

Marketing asset management solutions also improve marketing effectiveness by enabling the creation and use of more relevant marketing materials. Marketers have long known that customizing materials for specific audiences will make them more relevant and effective. Unfortunately, however, using customized materials has usually forced marketers to choose between losing control of the brand and incurring excessive costs.

MAM solutions make customization easy and cost effective while simultaneously enabling corporate marketers to keep control of brand messaging and brand presentation. The key to this controlled customization is user-friendly templates that identify what components of a marketing item can be customized and provide a set of pre-approved customization options.

Simplified Distributed Marketing

The third way that MAM solutions boost marketing results is by making it easy to create and execute effective marketing campaigns and programs in distributed marketing environments.

Distributed marketing refers to a marketing model in which both a central marketing department and "local entities" perform marketing activities. The defining characteristic of a distributed marketing model is that the local marketing entities have some degree of autonomy from the "home office." When the local entities are franchisees, resellers, or other independent channel partners, they may have complete marketing independence. A big challenge, therefore, is to persuade channel partners to market as aggressively as they should.

MAM solutions boost results in distributed marketing organizations by enabling local marketing partners to customize marketing programs to fit their specific needs and by making it simple for local marketing partners to create and execute those programs.

I've just published a white paper that describes these benefits in more detail. If you'd like to review this paper, send me an e-mail at ddodd(at)pointbalance(dot)com.

Does Your Selling Process Need an Overhaul?

2011-07-31T13:46:00.000-05:00

The 2011 Sales Performance Optimization survey by CSO Insights contains a wealth of information about the attributes and effectiveness of B2B selling. One of the important findings in the survey is that sales success depends on how you sell as much as what you sell.

How you sell has two components in the CSO Insights framework. The first is how customers (and potential customers) perceive the value that a company provides. At the lowest level, customers see the company as nothing more than an approved vendor that provides acceptable products or services. At the highest level, customers see the company as a trusted advisor whose products, services, and other contributions are key to their long-term success.

The second component of how you sell is the selling process you use. CSO Insights says that companies fall into one of four levels when it comes to selling process. Those at the lowest level don't have a defined selling process. Every salesperson does his/her own thing. At the highest level, a company has a formal, well-defined selling process, continuously monitors its use by the sales team, and adapts the process to changing market conditions.

The research by CSO Insights shows that the higher you are along these two dimensions, the more sales success you will have. For example, high ranking companies have more salespeople who achieve their quotas and higher closing rates.

The quality of your selling process has become critical because of changes in the way business buyers make purchase decisions. In essence, the buying process has become more complex, and you need a robust selling process to cope with this increased complexity. Consider just three of the ways that B2B selling has become more challenging to manage (based on data from the CSO Insights survey).

Sales cycles are longer - About two-thirds of companies have sales cycles for new customers that are four months or longer.
It takes more calls to close a deal - Nearly six out of ten companies say it takes at least six sales calls to close a deal with a new customer.
More people are involved in the buying process - Three quarters of companies say that a final buying decision requires input from at least three people.

Is your current selling process up to the challenge of managing the new sales environment? Do you have a formal process that is used consistently by your sales team? Is your process documented in written form, and is it part of your training for new sales reps? Do you consistently monitor the effectiveness of your selling process and adapt it to changing market conditions?

If you can't answer "yes" to all of these questions, you should probably take a close look at your current selling process. There's a good chance you're leaving substantial revenue dollars of the table.

How to Make Difficult Marketing Questions Easier to Answer

2011-07-20T07:17:00.000-05:00

To develop a successful marketing program for your business, you must make some critical decisions, and those decisions require you to answer several difficult questions.

What kinds of organizations will make your best prospects?
What individuals in those prospect organizations will be the target audience for your marketing programs?
What "arguments" will you use in your marketing messages and materials to persuade potential buyers to purchase your products or services?
How will you demonstrate the return on investment that your products or services will deliver to a prospective customer?
What marketing channels will you use to communicate with your target audience?

How you answer these questions will define the shape of your marketing program and largely determine how successful your marketing efforts will be. These questions are never easy to answer, but you can make the job a lot easier if you will first take the time to thoroughly understand and describe how your products or services create value for customers.

If you've ever watched someone install a tile or hardwood floor on a home improvement TV show, you may remember that the installer spends a great deal of time making sure that the first row of tiles or boards is straight and square with the walls of the room. After the first row is in place, the rest of the installation goes fairly quickly. That's because as long as the rest of the tiles or boards "fit" with the first row, the whole floor is almost guaranteed to turn out right.

A clear picture of how your products or services create value for buyers is like that first row of floor tiles or boards. It provides the reference point for the decisions you will make when designing your marketing program. Understanding how you create value will make it easier to determine who your best prospects are, to identify the individuals you need to market to, and to craft your marketing messages.

To understand and describe all of the significant ways your products or services can create value, you'll need to answer another set of questions.

What are all of the significant reasons that people have for purchasing a product or service like yours? What problems or needs motivate the buying decision?
What kinds of organizations are likely to have the problems or needs that underlie these reasons to buy?
Who within the prospect organization is affected by each problem or need? Who has the most to gain if the problem is solved and the most to lose if it isn't?
What specific outcomes are these people seeking?
What features of your solution will produce these desired outcomes?
What will the economic benefits be if these desired outcomes are achieved (lower costs, increased revenues, etc.)?

The best tool for collecting and organizing this value information is called a customer value map or a customer value matrix. We have a customer value matrix template that we use when working with clients on new marketing projects. If you'd like a copy of this template, send me an e-mail at ddodd(at)pointbalance(dot)com.

Why the "Swiss Army Knife" Approach to Content Marketing Doesn't Work

2011-07-11T08:24:00.000-05:00

Whenever I talk with prospective clients about starting a content marketing program, one of the first questions they ask is, "Why can't we create one content resource, say a white paper, that tells the whole story? It could include a description of the problems we can solve and the benefits our solution can provide, and we could include a couple of customer success stories to demonstrate that we can deliver what we promise."

At this point in the conversation, the image of a Swiss army knife always flashes in my mind. As most of you probably know, a Swiss army knife is a tool that's about the size of a large pocket knife. In addition to regular knife blades, it has several other attachments, such as a bottle opener, a can opener, a screwdriver, and a file. So, a Swiss army knife is a real multi-tasking tool and a handy thing to have on a camping trip or a hike.

Many B2B marketers believe they can create one marketing content resource that will fill all (or most) of their content needs. In essence, they want to create the marketing equivalent of a Swiss army knife. It's an appealing idea, and it would certainly simplify the job of content marketing. Unfortunately, however, the Swiss army knife approach to content marketing doesn't work well for a number of reasons.

Diluted Relevance - When you create an "umbrella" content piece, you will inevitably include information that's not all that relevant to some potential buyers. Suppose, for example, that you offer a technology product that must be "sold" to plant managers, IT Directors, and CFO's. Each of these buyer types will have distinct issues, concerns, and priorities. If you create a single content resource for all of these buyer types, you are essentially asking each potential buyer to wade through material that doesn't particularly interest him or her in order to find the information that addresses his or her primary interests and concerns.

Excessive Length - Even if the relevance problem doesn't exist, when you try to "cover all the bases" in one content resource, you are likely to end up with a very long resource - a 40-50 page white paper, for example. The problem with long content pieces is that most potential buyers now have short attention spans. They prefer to consume content in small doses, especially when they are in the early stages of the buying process. Most early-stage buyers simply won't be willing to invest the time it takes to read a 50 page white paper.

No Ammunition for Lead Nurturing - If you plan to have a lead nurturing program (and you should), you'll need several content resources to provide the "fuel" for the program. Offering the same content asset over and over just won't work.

Reduced Credibility - Having only one content resource can also create a negative perception by potential buyers. When I visit a company's website and see only one content resource, I can't help but question the company's expertise and capabilities. Many potential buyers probably react in the same way.

The bottom line? You need several content resources to have an effective marketing program. The good news is that creating multiple resources is not as difficult as it might appear. The key is to repurpose your content. For example, you can usually take one white paper and use it as the basis for two or three shorter content pieces.

Why Marketing Should Take the Lead in Lead Generation

2011-06-29T07:42:00.000-05:00

In my last post, I argued that companies should not rely primarily on salespeople to generate sales leads, but instead should use marketing programs to produce most new leads. Here's why.

The new customer acquisition process for a B2B company includes three distinct components - lead acquisition, lead management, and sales opportunity management.

Lead acquisition includes all of the activities that a company uses to persuade a potential buyer to engage with the company. The initial engagement can take several forms including meeting with a salesperson, responding to a lead generation campaign, and downloading a content resource (an article or a white paper, for example) from your website.

Lead management refers to the activities that a company performs to qualify leads and nurture those leads until they become legitimate sales opportunities.

Sales opportunity management includes the activities that we typically associate with selling - performing needs analysis, giving demos and/or presentations, preparing proposals and ROI estimates, and closing sales.

When most people use the term lead generation, they are referring to both lead acquisition and lead management.

Two economic factors explain why marketing programs (as opposed to traditional sales prospecting) should be the primary tool for generating leads. First, lead generation (particularly lead acquisition) is an inherently inefficient process. It has a high input (work required) to output (success) ratio. Lead generation is like hitting in baseball. If a major league player finishes a season with a .400 average, he is likely to win the batting title. But, a .400 average means the player "failed" 60% of the time.

Because lead generation is inherently inefficient, it's important to perform the process using low cost resources. Salespeople are expensive resources, and their prospecting activities don't "scale" because they are labor intensive and mostly manual. Marketing programs, on the other hand, scale very easily, and many marketing activities can be automated on a cost-effective basis. The bottom line is that leads generated by effective marketing programs are usually less expensive on a cost-per-lead basis than leads generated by salesperson prospecting.

The second economic factor relates to sale productivity. Reducing the amount of time that a salesperson must spend generating leads means that he or she will have the ability to manage a larger number of legitimate sales opportunities. This allows the salesperson to close more deals and generate higher revenues for the company.

I am not suggesting that salespeople should not be involved at all in lead generation. I am suggesting that salespeople should focus on what I call opportunistic lead generation. For example, they should be asking for referrals, and they should be actively networking with potential buyers. Salespeople also need to be involved in lead qualification because thorough lead qualification requires human interaction and human judgement.

Marketing programs are not free, but when effective marketing programs are used for lead generation, the payoff can be higher revenues and/or lower marketing and sales expenses (as a percentage of revenues).

Stop Depending on Your Salespeople to Generate Leads

2011-06-21T10:39:00.000-05:00

For B2B companies that sell complex products or services, keeping the sales pipeline filled with qualified leads is vital. Many companies have traditionally relied on salespeople to generate their own leads. In fact, many companies expect their salespeople to perform most, if not all, of the jobs required to find and win new customers, from identifying prospects, to generating leads, to closing sales.

The problem is that this traditional approach to lead generation no longer works as well as it once did. Business buyers don't need salespeople as much today as they did in the past. They can go online and find most of the information they need to learn about and evaluate products and services. So, buyers are now performing research independently, and they are avoiding conversations with sales reps until much later in the buying process. As a result, it's become a lot harder for salespeople to create the initial engagement with potential buyers, which is what lead generation is all about.

Making salespeople responsible for lead generation is a bad idea for several related reasons.

Salespeople must devote a significant amount of their time and energy to lead generation work in order to produce a sufficient number of leads. According to the 2011 Sales Performance Optimization survey conducted by CSO Insights, salespeople are now spending 24% of their time generating leads and researching accounts.
The more time a sales rep spends on lead generation, the less time he/she has for actual selling. The CSO Insights survey shows that salespeople are spending only 41% of their time on actual selling activities.
The less time a salesperson spends on actual selling, the less revenues he/she will produce. CSO Insights says that only 59% of sales reps made their quotas in 2010.

When the "revenue per salesperson" number goes down, overall company revenues are likely to deteriorate. Companies must either accept lower revenues of compensate in some way. The traditional responses have been to browbeat the salespeople to work harder, provide sales reps with training to improve their skills, or hire more salespeople.

The first two responses usually don't work because the real problem is not unproductive salespeople (although some probably are), but an ineffective and inefficient lead generation process. The third response (hiring more salespeople) may produce higher revenues, but it will also significantly increase your selling expenses.

The real solution is to use effective marketing programs to generate leads and use your sales reps to do the things that only they can do - have meaningful, personal, one-on-one conversations with prospects who are truly sales ready.

Companies are now recognizing that marketing should take the lead in lead generation, but it's also clear that this is still a work in progress. In the CSO Insights survey, respondents indicated that 47% of sales leads are still generated by salespeople, while only 29% are produced by marketing.

Over the past few months, I've worked with several companies that get more than 80% of their new sales leads from salespeople and only 20% from marketing and other sources (referrals, press coverage, etc.). These percentages need to be reversed. Your objective should be to generate 80% of your sales leads from your marketing programs.

If you currently depend on your salespeople for most of your leads, this transition can't be made overnight. The important thing is to set ambitious but attainable goals for marketing generated leads, and then put the marketing programs in place that will enable you to reach those goals.

Seven Tips for Writing Case Studies that Sell

2011-06-16T09:18:00.000-05:00

Customer case studies are one of the most popular kinds of marketing collateral used by B2B companies. When they're done right, case studies can help shorten sales cycles and close more deals.

According to recent research by Eccolo Media, case studies are the third most widely consumed type of marketing collateral (behind product brochures and white papers) and the second most influential type of marketing collateral (trailing only white papers).

The good news is that case studies can significantly boost the effectiveness of your marketing efforts. The not-so-good news is that the use of case studies has exploded, and this means that your case studies are facing more competition for attention and mindshare than ever before. If they look and sound like all the others your potential buyers see, or if they don't tell a compelling story, they simply won't produce the expected results.

There are seven essential steps for writing effective and compelling case studies.

Collect and organize the facts you have to work with
Define the target audience
Identify the key takeaways
Make the case study a true "story"
Describe results/benefits in specific (preferably, quantitative) terms
Use customer quotations liberally
Make the case study easy to scan

We've created a "mini guide" for writing effective case studies that discusses these seven steps in greater detail. These steps reflect current best practices, and we use all of these techniques when we prepare custom case studies for clients.

If you'd like to review Seven Tips for Writing Customer Case Studies that Sell, send an e-mail to ddodd(at)pointbalance(dot)com.

How to Eliminate Obsolescence from the Marketing Supply Chain

2011-06-13T13:19:00.000-05:00

The obsolescence of marketing materials constitutes a major problem for many companies. The Chief Marketing Officer (CMO) Council has said that obsolescence creates an "epidemic of waste" that undermines the development of an efficient marketing supply chain. In a recent CMO Council survey:

60% of respondents said they spend at least 20% of their total marketing budget on marketing "consumables" (primarily printed materials such as marketing collateral documents, promotional items, and point-of-sale materials).
40% of respondents said they waste 20% or more of their marketing materials because of obsolescence.

Source: Understanding the Critical Factors to Achieving Marketing Supply Chain Operational Effectiveness & Optimization (CMO Council, 2010).

Obsolete marketing materials represent a complete waste of marketing dollars. The cost of obsolete materials is essentially an investment in marketing communications that never reach the intended audience. A closet or storeroom or trash container filled with obsolete marketing materials is a tangible manifestation of budget funds that could have been used to support productive marketing programs.

Just as important, the use of obsolete marketing materials can adversely affect marketing effectiveness. In the CMO Council survey cited above, 51% of respondents admitted that they had sent materials to customers or prospects that contained outdated information. In today's business environment, every interaction with a potential buyer is important, and sales can easily be lost if prospects are provided outdated information.

A marketing asset management solution can dramatically reduce the waste created by marketing materials that become obsolete before they can be used. These solutions consist of a suite of technologies, manufacturing capabilities, and services that automate many of the processes relating to the procurement, production, management, and distribution of marketing materials. They reduce obsolescence by eliminating the need to purchase marketing materials in large quantities.

Marketing asset management solutions make extensive of on-demand production technologies, and these technologies enable you to acquire most marketing materials in small quantities on a cost effective basis. And because production lead times are short, you can order materials as and when they are needed. This eliminates the need for large inventories, which greatly reduces the possibility that marketing materials will become obsolete.

If you struggle with obsolescence, a marketing asset management solution may be just the "cure" you need for this epidemic. To learn more about how marketing asset management solutions work, take a look at our white paper titled, Is a Marketing Asset Management Solution Right for My Company? To get a copy of this white paper, just send an e-mail request to ddodd(at)pointbalance(dot)com.

Making Localized Marketing Easy and Affordable

2011-06-08T08:30:00.000-05:00

In my last post, I briefly described how marketing asset management solutions work. These solutions automate many of the processes relating to the procurement, production, management, and distribution of marketing materials such as marketing collateral documents, promotional items, and point-of-sale materials.

Marketing asset management solutions can dramatically reduce the indirect costs associated with marketing materials, but they can provide many other benefits as well. One of these benefits is to make localized marketing easy and affordable.

Marketers have long recognized that customizing marketing materials for specific audiences will increase relevancy and improve the effectiveness of those materials. One proven application of this tactic is known as localized marketing. Localized marketing is just what it sounds like - the practice of customizing marketing materials for local audiences. In can be as simple as adding local contact information to otherwise standard marketing collateral materials or as complex as creating an entire promotional program (direct mailers, print ads, point-of-sale materials, etc.) that is customized for a specific geographic market or buyer segment.

Unfortunately, localized marketing has traditionally been cumbersome, time-consuming, and costly. Marketers who wanted to reap the benefits of localized marketing were usually forced to make an unattractive trade-off between keeping control of the brand and excessive costs.

Marketing asset management solutions can eliminate the barriers to localized marketing. By using customizable templates for marketing materials, MAM solutions enable corporate marketers to retain control of brand messaging and brand presentation, while simultaneously enabling front-line marketers (salespeople, local store/branch managers, dealers, franchisees, etc.) to customize marketing materials to fit their marketing needs.

Would a marketing asset management solution make sense for your company? To find out, read our white paper titled, Is a Marketing Asset Management Solution Right for My Company? Request your copy by sending an e-mail to ddodd(at)pointbalance(dot)com.

What is a Marketing Asset Management Solution?

2011-05-31T08:29:00.000-05:00

Marketing automation is a hot topic in the B2B marketing community. According to most reports, the number of companies using marketing automation solutions is growing rapidly, and the growth is expected to continue for the foreseeable future.

The term B2B marketing automation usually refers to technologies that automate activities like lead capture, lead nurturing, lead scoring, and lead distribution. These technologies can greatly improve the effectiveness and efficiency of B2B marketing efforts, particularly when it comes to lead management.

There is, however, another type of B2B marketing automation that should also be on your radar. These solutions are usually called marketing asset management solutions. A marketing asset management solution is a suite of technologies, production capabilities, and fulfillment services that automate many of the processes relating to the procurement, management, and distribution of marketing materials such as marketing collateral documents, promotional items, and point-of-sale materials. A marketing asset management solution is essentially an outsourcing arrangement in which the solution provider assumes responsibility for several components of a company's marketing materials supply chain.

Here's how a marketing asset management solution works.

The core component is a central repository that contains digital versions of the marketing materials that a company uses. The solution will also include an online catalog that contains images of the company's materials.
When an authorized user needs to order marketing materials, he or she logs into a secure website, selects the desired materials from the catalog, and places the order.
A marketing asset management solution also provides powerful customization capabilities. If an item is designed to be customized, the online catalog will contain a template of that item. The template identifies the content elements that can be modified and allows a user to customize the item in allowable ways.
The marketing asset management solution provider uses production technologies that allow most marketing materials to be manufactured on an order-by-order basis. The solution provider also handles packaging and fulfillment. In those cases where production economics don't allow for materials to be produced on an as-ordered basis, the solution provider will provide warehousing and real-time (or near real-time) inventory tracking and reporting.

A marketing asset management solution will significantly reduce the indirect costs of marketing materials and provide several other important financial and operational benefits. In upcoming posts, I'll describe some of these benefits.

If you'd like to learn more about marketing asset management solutions, take a look at our white papers titled, Is a Marketing Asset Management Solution Right for My Company? and Four Reasons to Use a Marketing Asset Management Solution. To obtain a copy of one or both of these papers, just put your request in a comment to this post or send an e-mail request to ddodd(at)pointbalance(dot)com.

Reduce the Hidden Costs of Marketing Materials

2011-05-25T14:37:00.000-05:00

B2B marketers are understandably concerned about the performance of their campaigns and programs. After all, the primary job of B2B marketing is to generate a sufficient number of qualified leads so that company sales will grow. Plus, all of the recent emphasis on marketing ROI has increased the pressures on marketers to justify the investments they make in marketing efforts.

Obviously, marketers need to monitor and improve the performance of marketing campaigns. But it's equally important to focus on the efficiency of marketing operations. One area of marketing operations that offers huge opportunities for improvement in most companies relates to the management of marketing materials (marketing collateral, promotional items, and point-of-sale materials).

The issue here isn't the direct production costs of marketing materials, although that's obviously important. What I'm talking about in this post is the cost of procuring, managing, and distributing marketing materials. Research shows that over half of the real total spending on marketing materials can be attributed to obsolescence waste and to activities like procurement, storage, inventory management, and distribution.

This aspect of marketing is now receiving much more attention for a very simple reason. The dollars saved by reducing these indirect, and often "invisible," materials costs can be redeployed to fund revenue-generating campaigns and programs.

The good news is that we now have the tools to reduce these costs and dramatically increase the efficiency of the supply chain for marketing materials. These tools are usually called marketing asset management solutions, and if they're not yet on your radar, they should be.

In an upcoming post, I'll describe how marketing asset management solutions work and how they can improve the productivity of your marketing operations.

Increased Profits, Not Higher Sales, Determine Marketing ROI

2010-08-03T07:49:00.000-05:00

Return on marketing investment has become a hot topic as marketers seek to prove the value of their activities and programs and strive to bolster their credibility in the C-suite. Today, marketers are using ROI for everything from justifying marketing budgets to measuring the performance of individual campaigns.

Given its increased use and popularity, you would think that the process for calculating marketing ROI is now well understood. Unfortunately, I still see far too many examples of marketing ROI that has been calculated incorrectly - in many cases by people who should know better.

One of the most common errors is the use of increased revenues (sales) rather than increased profits when calculating marketing ROI. To illustrate this error, take a look at the following table. I based this table on an example ROI calculation that appears on the Website of a well-known national provider of direct mail services. I won't name the company because they are only one of many companies that use this methodology.

In this example, Return On Investment (ROI) was calculated by dividing Total revenue ($1,250) by Total cost of the mailing ($550), resulting in an ROI for the mailing of 227%.

That ROI number looks fantastic, but the problem is, it's flat out wrong. Way wrong.

The basic formula for calculating ROI is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

For ROI purposes, Gain from Investment is the incremental gross profit (gross sales/revenues less cost of goods sold) produced by a marketing campaign or program. Using incremental sales or revenues in the ROI calculation distorts ROI because most marketing campaigns are designed to increase sales volume. And increases in sales volume are not free - there are always costs associated with producing and delivering the additional products or services. Therefore, incremental gross profit is the real meaure of the "gain" produced by most marketing investments.

So, the first problem with the methodology used in the example is that it bases ROI on incremental revenues rather than on incremental gross profits. If the cost of goods sold of the products covered by the example is 50% of the products' selling price, the incremental gross profit produced by the direct mail program would be $625 (total revenue of $1,250 X 50%). Using incremental gross profit causes the ROI to drop from 227% to just under 114% ($625 / $550). That's a more accurate ROI calculation than the one used in the original example, and it's still an impressive number, but it's also still wrong.

To calculate marketing ROI correctly, you must subtract the cost of the marketing investment from the incremental gross profit produced by the investment and then divide by the cost of the investment.

So, the real ROI produced by the example direct mail project would be calculated as follows:

ROI = (Incremental Gross Profit-Total Cost of the Mailing) / Total Cost of the Mailing
ROI = ($625 - $550) / $550
ROI = $75 / $550
ROI = 14%

It should be clear from this discussion that inaccurate calculations of marketing ROI can lead to unprofitable marketing decisions and can also undermine marketers' credibility with senior company leaders. Would you want to tell your CEO that a marketing campaign has an ROI of 227% when the real ROI is 14%? The moral of the story: If you're going to calculate ROI, it's wise to calculate it correctly.

Have you seen instances where inaccurate calculations of marketing ROI have led to flawed marketing decisions?

How MSP's Can Take Advantage of B2B Marketing Automation - Part 1

2010-07-28T09:05:00.000-05:00

The use of marketing automation technologies by B2B companies is growing rapidly, and the growth is likely to continue for the foreseeable future. Marketing service providers who serve B2B companies need to be aware of this trend because it changes the way B2B companies approach marketing and the kinds of marketing services they will require - and be willing to pay for. To fully realize the benefits of marketing automation, B2B companies will need to define marketing and sales processes more precisely, and they will need to implement new marketing techniques. Marketing service providers who can help B2B companies make these changes stand to win new clients and boost revenues.

The best way to identify the kinds of marketing services that are likely to see increased demand is to identify the tasks that B2B companies must perform in order to take full advantage of marketing automation systems. There are eight major tasks that are essential to implementing and successfully using marketing automation technologies. Most of these tasks provide the foundation for new marketing techniques that many B2B companies have not previously used. Therefore, many B2B firms – especially small and mid-size companies – will need assistance to perform some or all of these tasks, and that’s what creates the opportunity for savvy marketing service providers. I’ll describe two of these major tasks in this post, and I’ll cover the others in my next few posts.

Creating an Ideal Customer Profile – This task is right out of Marketing 101, and it should be a core component of every company’s marketing process, whether or not marketing automation is involved. An ideal customer profile is simply a description of the kinds of companies that make the best customers and, by extension, the most attractive prospects. The ideal customer is usually described in terms of “firmographics” such as industry classification, company size, and geographic location. The ideal customer profile is used to shape lead generation programs, and it is one major component of the lead scoring system that will be set up as part of the marketing automation implementation.

Obviously, a marketing service provider cannot decide what a client’s ideal customer profile should be. The role of the MSP is to lead the client through a process that is designed to ensure that all the right questions are asked and that all the appropriate factors are considered.

Developing Buyer Personas – Most B2B buying decisions are made (or significantly influenced) by a group of people rather than by one individual. This is true even in relatively small companies. Research firm MarketingSherpa says that in companies having between 100 and 500 employees, the average number of people involved in buying decisions is 6.8. This buying group is usually composed of individuals who have different points of view regarding a proposed purchase. For example, a “user buyer” will usually have different priorities than a “technical buyer” or an “economic buyer.” To market to these buyers effectively, a company must develop marketing content that addresses the specific needs of each type of buyer in the buying group. The basis for developing such content is buyer personas.

A buyer persona is a biographical sketch of a typical buyer. It is more than a job title. Buyer personas are written in narrative form, and they are written as if the archetypical buyer is a real human being. A company needs to create a persona for each type of buyer who significantly influences the purchase decision. Marketing automation systems enable companies to create and execute marketing programs that are customized for each type of buyer, but the starting point for leveraging this functionality is the creation of buyer personas.

To develop a complete buyer persona, marketers must answer several questions about each type of buyer. Here are some examples:

•What are the buyer’s major business objectives and job responsibilities?
•What strategies and tactics does the buyer use to achieve his objectives and fulfill his responsibilities?
•What measures are used to evaluate the buyer’s job performance?
•What issues and problems keep the buyer awake a night?
•How old is the typical buyer? [Age range is OK]
•Is the buyer typically male or female?
•What is the typical buyer’s educational background?
•What sources does the buyer turn to for information?
•How would the buyer describe the issues he or she is facing?

As with the ideal customer profile, an MSP cannot build buyer personas “for” a client, but the MSP can lead the client through the process of developing buyer personas that will drive relevant and effective marketing.

In my next post, I’ll cover two more tasks relating to marketing automation that MSP’s can help B2B marketers perform.

For More Accurate Marketing ROI, Think Incrementally

2010-06-23T13:55:00.001-05:00

Return on investment (ROI) is a financial measure that managers use to guide major investment decisions. For example, suppose that you are considering a business expansion opportunity that will require the purchase of new machinery and certain other investments. To evaluate this potential expansion, you would discount all of the future profits and expenses related to the expansion and calculate a net present value for the expansion opportunity. Then, you would use those net present values to compare the gain from the expansion investment with the cost of the expansion investment and calculate the projected ROI of the expansion project.

When we use ROI to evaluate prospective marketing investments, we need to adapt the traditional ROI analysis process a little, primarily because unlike most major capital investments, marketing investments can often be made in relatively small increments. In other words, marketing investments are often not simple "go-no go" decisions. In many cases, the more difficult questions relate to the size and scope of a potential marketing campaign or program. How long should the campaign run? How many prospects should be targeted, and how many times should they be contacted?

For example, suppose that you are considering a direct mail campaign to generate new sales leads for your B2B company. You have identified three mailing lists that you could use in this campaign. Each of these lists contains 1,500 names. The first list (List 1) is a "house" list that includes prospects that your company has had some previous contact with. Therefore, you believe that List 1 contains the best prospects and will probably produce the most new customers. List 2 and List 3 are both outside lists that you can purchase, and based on past experience, you believe that List 2 will be more productive than List 3. The question is: Should your campaign target only the prospects in List 1, or those in List 1 and List 2, or those in all three lists.

The table below shows the estimated costs and the projected results of all three alternative versions of the campaign. The top portion of the table shows the overall ROI calculations. The lower portion of the table shows the incremental results as you move from the first option to the second and from the second to the third.

For this example, let's assume that your company requires that all proposed marketing investments show a projected ROI of at least 15 percent.

If you look at the overall ROI calculations shown above, you would probably recommend including all three mailing lists in the direct mail campaign. Even though the projected ROI of 57.5 percent is lower than the other two options, it still far exceeds your company's ROI threshold of 15 percent. The three-list option also generates the highest projected total return ($15,750) and the highest projected net return ($5,750).

However, if you look at the incremental analysis, you see a different story. Here, you see that if you include List 3 in the campaign (as opposed to only List 1 and List 2), your company will incur $2,500 of additional costs, and you will increase your net return by $250. This means that the incremental ROI generated by including List 3 in the campaign is only 10 percent. Since this falls below your company's ROI threshold, you would probably recommend against including List 3 in the campaign.

This example illustrates how the incremental approach to analyzing marketing ROI can lead to more profitable marketing decisions by measuring the incremental value of each incremental investment.

Analyzing the ROI Formula - Part 3

2010-06-15T12:42:00.000-05:00

This post concludes my discussion of the individual components of the formula used to calculate the return on investment (ROI) of marketing activities and programs.

The basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

In earlier posts, I've discussed the Gain from Investment and the Cost of Investment components of the ROI formula. Although it's not explicitly included in the formula, time is the third component of the calculation.

ROI is always measured over a specified period of time. The goal is to select a time period that will enable you to capture an accurate view of the stream of profits and expenses that are attributable to a marketing investment. A time period that is too short will cause the ROI to be understated, and this may cause you to not go forward with proposed marketing programs (or eliminate existing programs) that produce significant value over the long term. If the time period used is too long, the accuracy of the ROI calculation may be diminished because of the uncertainty that is inevitably involved in forecasting profits and expenses for distant time periods.

When specifying the time period to be used in an ROI calculation, marketers need to focus on several issues.

Over what period of time will the marketing campaign or program have an impact? The time period used does not need to extend past the point where most (85%-90%) of the value and costs are captured.
How much uncertainty exists regarding future value and expenses? If the degree of uncertainty increases substantially over time, marketers should use a time period that permits reasonably accurate forecasts.
What are the company's profit priorities? Some companies rely on short-term cash flows to remain viable. Such companies are naturally more interested in marketing programs that produce short-term results and, therefore, are more interested in short-term ROI.

To illustrate some of the issues that surround the selection of the correct time period for measuring ROI, let's look at two different situations.

Suppose that you are a retailer and you decide to send your existing customers a direct mail piece that includes a discount coupon. Customers must present the coupon in order to receive the discount. From past experience, you know that 95% of the coupons that are redeemed will be used within 90 days of the date of the mailing. Therefore, it would be appropriate to measure the ROI of this marketing program over a period of 90 days.

Now suppose that you are a software company that provides warehouse management software to business customers. You decide to market the latest version of your software to prospective customers using an integrated direct mail and e-mail campaign. Because warehouse management software has a long sales cycle, your marketing campaign will involve several direct mail pieces and several e-mails sent over a period of several months. Companies that buy your software pay an initial licensing fee and monthly support fees. From experience, you know that once a company buys your software, they will remain a customer for an average of seven years. Therefore, in order to get an accurate measure of the ROI of your marketing campaign, you would need to measure ROI over a seven-year period.

One final point about the role of time in measuring marketing ROI is that both future profits and future expenses must be converted into present values. This is accomplished by "discounting" both future profits and future expenses. The discount rate is typically set at the company's cost of capital, which marketers usually obtain from the company's chief financial officer.

Analyzing the ROI Formula - Part 2

2010-06-08T11:11:00.000-05:00

This post continues our discussion about measuring the performance of marketing, including the use of marketing return on investment (ROI).

As I have already noted, the basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

Therefore, marketing ROI is calculated using two factors - the gain or incremental "profit" produced by a marketing campaign or program and the cost of that campaign or program. My last post discussed the Gain from Investment component of the ROI formula. This post will focus on the Cost of Investment component of the formula and discuss some of the issues this component presents when ROI is used to measure marketing.

Cost of Investment is the total cost of the marketing campaign or program whose ROI is being measured. At first glance, this can appear to be an easy determination to make, and in some cases it will be. For example, if you outsource all of the work required to develop and execute a particular marketing campaign, the investment in that campaign will be easy to identify.

In other cases, however, the issue becomes more complex. For example, if creative elements are developed that will be used in multiple marketing campaigns or programs, how should these creative development expenses be assigned to the multiple marketing efforts? What if you don't know how many times a creative element will be used? Should the labor costs of marketing department staff personnel be treated as marketing overhead or assigned to specific marketing campaigns or programs?

The most important principle to use when assigning expenses to specific marketing campaigns or programs is that cost assignments should always be based on real-world cause-and-effect relationships. In other words, the marketing campaign or function whose ROI is being measured must be the "cause" of the cost or expense.

As noted earlier, this principle can be fairly easy to apply in some cases, such as when expenses are incurred to pay outside contractors (agencies, designers, printers, etc.) for specific work on a specific project. Internal marketing department expenses can be more difficult to address. For example, if you employ graphic designers, it is appropriate to assign their labor-related costs to the projects they work on. On the other hand, it may not be possible to assign the labor costs of higher-level marketing managers who perform more general marketing activities. Often, these costs cannot be logically assigned to specific marketing campaigns and should be treated as overhead expenses.

Assigning costs to marketing campaigns and programs can become relatively complex, and marketers may need to obtain help from financial professionals in performing these assignments. Assigning costs accurately is essential to producing accurate ROI calculations.

Analyzing the ROI Formula - Part 1

2010-05-10T09:24:00.000-05:00

This is the third in a series of articles about measuring the performance of marketing, including the use of marketing return on investment (ROI). In my last post, I described the basic concept of ROI and discussed how ROI has been used to measure many types of business performance. Beginning with this post, I'll discuss each component of the basic ROI formula and explore some the the issues that each component presents when ROI is used to measure marketing.

The basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

So, the ROI formula contains three components:

Gain from Investment
Cost of Investment
Time - Although the formula doesn't expressly contain a "time" value, ROI is always measured for a defined period of time.

This post will focus on the Gain from Investment component of the formula, and this component presents two basic issues. First, how should Gain from Investment be defined? And second, how should ROI be calculated when the Gain from Investment is produced by more than one marketing campaign or program?

For ROI purposes, the best definition of Gain from Investment is the incremental contribution margin produced by the marketing function or by a marketing campaign or program. One of the biggest mistakes that I still see some marketers make is to use incremental sales (revenues) to calculate marketing ROI.

To understand why this mistake distorts ROI, remember that most marketing programs are designed to increase sales volume either by acquiring new customers or by increasing sales to existing customers. But increases in sales volume are not free - there is always an associated cost of producing and delivering the additional products or services. Therefore, if incremental sales are used to measure ROI, the ROI will be overstated.

Using contribution margin solves this problem by taking costs into account. Contribution margin is defined as sales minus variable costs. Variable costs are costs that the company will not incur if the additional sales are not made. Therefore, incremental contribution margin is a measure of the "net new revenues" produced by a marketing program.

The second major issue presented by the Gain from Investment component of the ROI formula is how to address situations where the Gain may have been produced by more than one marketing campaign or program. This situation is not at all uncommon in B2B companies where each prospect may be "touched" by several marketing programs over the course of his/her buying cycle.

Some companies deal with issue by assigning all of the incremental contribution margin earned from a prospect to the marketing program that generated the first "inquiry" from that prospect. Others assign all of the incremental margin to the program that "touched" the prospect last (just before the purchase). It should be obvious that this first touch/last touch approach will often produce a distorted picture of marketing ROI if a prospect has had several interactions with your company.

Some companies attempt to eliminate this distortion by allocating the Gain to all of the marketing programs that "touched" the prospect. But what percentage of the Gain do you assign to each program? Allocating the Gain equally to all of the marketing programs may not reflect which of the programs were truly influential in the purchase decision and which ones weren't. Unless you have some way of knowing how much influence each program actually had in driving the purchase decision, the allocations are arbitrary, and the resulting ROI measurement is likely to be inaccurate.

This allocation issue presents one of the most serious challenges in measuring marketing ROI accurately, especially when we attempt to measure marketing ROI at a very grandular level. The difficulty of using ROI in this way suggests that there may be a better approach, and I'll have more to say about that in a later post.

The Basic Idea of Return on Investment

2010-05-03T12:58:00.001-05:00

As I wrote earlier, return on investment has become the "gold standard" for measuring the performance of marketing. Return on investment is now used to measure both the performance of the overall marketing function and the performance of individual marketing activities and programs.

In addition to measuring past performance, marketers are using ROI estimates and forecasts to make decisions about future marketing programs and to allocate marketing budgets. Therefore, ROI is playing a significant role in determining how marketing wll be done.

The basic idea of ROI is easy to understand. Investopedia.com defines return on investment as: "A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the return is expressed as a percentage or a ratio."

The basic ROI formula is:

ROI = (Gain from Investment-Cost of Investment) / Cost of Investment

For example, suppose that you purchase 100 shares of stock for $10 per share. One year later, you sell the stock for $11 per share. Your annual ROI for this investment would be 10%, calculated as follows:

ROI = ($1,100 - $1,000) / $1,000
$100 / $1,000
10%

ROI has been used to measure the performance of companies and business units for over eighty years. ROI estimates have also been used to evaluate major capital investments for decades. More recently, ROI has been used to measure the benefits provided by everything from process improvement projects to employee training programs. All things considered, ROI (or one of the variations of ROI) has become the most prevalent measure of financial performance used in business today.

It's only natural, therefore, to use ROI to evaluate the performance of marketing activities and programs. CEO's and CFO's are rightfully demanding proof that their "investments" in marketing are producing real financial benefits, and they view ROI as a proven method for measuring those benefits.

So, if you're a marketer today, you need to be ready to measure and/or estimate the ROI of your activities and programs, or you need to be prepared to show why a different metric should be used in lieu of ROI.

In my next post, I'll take a closer look at the "return" component of the ROI formula and explore some of the issues that arise when ROI is used to measure marketing.

Measuring Marketing Takes More Than ROI

2010-04-26T12:34:00.000-05:00

Over the next several days, I'll be posting articles here about measuring the performance of marketing, including the use of marketing return on investment, or MROI.

This may not be one of the sexiest marketing topics out there, but it has become an extremely important one. For the past several years, CEO's and CFO's have been demanding greater financial accountability from the marketing function, and they are now pressing marketers to prove the value of marketing activities and programs. Many years ago, John Wanamaker is reported to have said, "Half the money I spend on advertising is wasted; the problem is, I don't know which half." CEO's and CFO's expect better from marketers today.

I'm also writing about this topic because, even though there is a large volume of literature about how to measure the performance of marketing, there are many misconceptions floating around, even about some of the most basic principles. For example, you can find many marketing campaign "ROI calculators" in use today that calculate ROI based on revenues or sales instead of profits (in one of its various forms). If a marketer presents one of these kinds of "ROI calculations" to a CFO, his/her credibility can be undermined.

Another issue is that in recent years, MROI has become the "gold standard" for measuring not only the overall performance of the marketing function, but also the performance of individual marketing activities. Some experts argue that this approach is both possible and essential. But, like any metric, MROI has limitations, and we need to understand those limitations in order to use the metric in the right ways, for the right purposes.

In my next few posts, I'll start by explaining the basic idea of ROI, and I'll describe how ROI has been used to measure business performance. Then, I'll look at the components of the ROI formula and describe how each of the components should be defined and calculated and what issues that may present.

And finally, I'll argue that, while MROI is an important metric, we need a more holistic approach to get a comprehensive view of marketing performance, especially in B2B companies with complex marketing/sales processes and longer revenue cycles.

Four Ways to Jumpstart Content Development

2010-04-19T08:29:00.000-05:00

Successful B2B marketing depends largely on the quality of marketing content. To break through the marketing clutter that fills the environment and create real engagement with potential buyers, you need relevant and compelling content that helps buyers address important business challenges.

Although this "new" approach to marketing is quickly becoming a competitive necessity, it's not an easy transition for many companies to make. The volume of content needed can seem to be overwhelming.

For example, suppose that you sell to only one type of company. Your buying group typically contains three individuals so you have three buyer personas to address. Your buyers usually move through a four-stage buying process, and you believe you will need to interact with each buyer at least three times during each stage of the buying process. This means you'll need at least 36 "pieces" of marketing content to fuel your marketing effort (3 personas X 4 buying stages X 3 interactions per buying stage).

The good news is that getting started with content marketing is usually the most difficult step. Once your initial base of content is created, the job becomes more manageable. So, is there any way to make getting started easier? These four tactics will enable you to jumpstart your content development.

Narrow Your Focus

If you sell to more than one type of business, pick your largest, most profitable, or most attractive customer segment and start by developing a full set of content materials for that segment. You can add content for other types of customers later. When it comes to content marketing, you are better off having the content you need to take some of your prospects all the way through the buying cycle than having content that will take all of your prospects only part of the way through the buying cycle.

Use Existing Marketing Materials

OK, I'll admit that most of your existing marketing materials probably aren't suitable for the kind of customer-focused marketing you need to be doing today. I include this tactic for two reasons. First, at the right time in the buying cycle, your potential buyers will want and need to learn about your company and your products, and your existing marketing materials should be able to perform this function. Second, even if your existing materials aren't suitable in their current form, you may be able to make some of them suitable by making relatively minor changes. At least you won't be starting from scratch.

Follow the "Rule of Five"

The rule of five says that whenever you develop a significant content asset, you should try to create at least four "smaller" content pieces from the original asset. For example, say you write a white paper. You then use the content in the white paper to create one or two short articles and two or three blog posts.

Outsource the First Wave

Even if you follow the first three suggestions, you may still find that you don't have the time or internal resources to create the content you need as fast as you need it. If that's the case, you should consider outsourcing some or all of the content development work. Once the initial wave of content is developed, you may find that you can build on that foundation to create the additional content you need.

The "Other" Jobs of B2B Marketers

2010-04-12T09:05:00.000-05:00

A lively discussion is underway in the Marketing Communications group at LinkedIn. The question that started the discussion was: "In one sentence, what is marketing?" In less than a month, this question has produced 145 comments. As you might expect, the comments have included a wide range of definitions, but I think it's fair to say that most have focused, in one way or another, on the "persuasion" aspect of marketing.

Because of my work, I read almost everything I can find about B2B marketing. For example, I regularly follow over three dozen B2B marketing blogs, and the list keeps growing. There are some wonderful B2B bloggers sharing insights and ideas - Seth Godin, Ardath Albee, Steve Woods, and Jon Miller, just to name a few.

The hot topics today in the B2B marketing blogosphere include the use of social networks, inbound marketing, content marketing, lead management (lead scoring, lead nurturing, etc.), and marketing automation. All of these topics also relate to how we communicate with and persuade potential buyers.

It's understandable why we devote so much attention to marketing communications. Most B2B marketers spend most of their time developing and executing marketing communications programs of various kinds. Marketing communications are extremely important, but they are only part of the "promotion" component of marketing. And promotion is only one of the "four P's" of marketing.

Peter Drucker once said, "Because the purpose of business is to create a customer, the business enterprise has two - and only two - basic functions: marketing and innovation." I might not go quite that far, but I do believe that B2B marketers can and should play a broader role that just managing marketing communications.

Let's consider just two examples. First, marketers should have a strong voice in the development of new products and services. Marketers (in collaboration with salespeople) are best suited to be the "eyes and ears" of the company in the marketplace. Gathering information about the changing needs and challenges of customers and prospects should be an ongoing priority for marketers, and you should create a systematic process for collecting and evaluating this information. This kind of market intelligence can be vital for developing new products or services that will win in the marketplace.

Marketers should also play a significant role in making decisions about pricing. I realize that pricing is a sensitive subject in many companies and is often the source of contention among marketers, salespeople, and financial/accounting professionals. Research has shown that pricing is the single most powerful profit lever that managers can use on a daily basis. It's up to marketers to understand the real economics of pricing decisions so that they can bridge the gap between those who view pricing as a tool for closing a sale and those who believe that your company's costs should dictate its prices.

Managing the marketing communications effort is important, but B2B marketers also have other critical jobs to perform.

B2B Value Propositions That Resonate With Buyers

2010-04-08T08:17:00.000-05:00

One of my favorite definitions of value proposition comes from Jill Konrath, author of Selling to Big Companies. She says that a value proposition is, "a clear statement of the tangible results a customer gets from using your products or services."

Value propositions are a core element of your marketing strategy. They describe how you create value for customers and, therefore, they are the ultimate source for your marketing content. In fact, you can't create compelling marketing content until you really understand how you create value for customers.

Despite their undeniable importance, most companies don't do a good job of formulating and communicating compelling value propositions. A recent survey of decision makers in B2B companies conducted by the Marketing Leadership Council of the Corporate Executive Board found that 86 percent of the "unique benefits" touted by sellers were not seen by potential buyers as having enough impact to create a preference for a particular seller.

In their 2007 book, Value Merchants, James C. Anderson, Nirmalya Kumar, and James A. Narus identified three basic types of B2B value propositions.

All Benefits - Essentially, a list of all the benefits that managers believe their solutions might deliver to target customers. This type of value proposition requires the least knowledge about specific customers or competitors, but it has one major drawback. This approach can lead managers to claim advantages for solution features that actually provide little real benefits to target customers.

Favorable Points of Difference - When managers use this type of value proposition, they attempt to differentiate their solution by identifying favorable points of differrence between their solution and the customer's next-best alternative. While better than an All Benefits vallue proposition, this type of value proposition still has a major drawback. It can lead managers to assume that all favorable points of difference will be valuable to a prospect, while the reality may be that many points of difference contribute little value to a particular prospect.

Resonating Focus - The third type of value proposition is called Resonating Focus. Anderson, et. al. say that in a world where potential buyers are extremely busy, sellers must use value propositions that are both compelling and simple. The basic idea behind a Resonating Focus value proposition is to identify the one or two points of difference (between your solution and your competitor's) that deliver the greatest value to the target customers.

Resonating Focus value propositions dovetail nicely with content marketing. To begin with, companies that use Resonating Focus value propositions develop customized value propositions for various customer segments. This is necessary because the elements of value that matter most are likely to vary based on the type of customer involved.

It's also possible to extend the Resonating Focus value proposition concept from customers (organizations) to individual buyers or buyer personas. And when you develop Resonating Focus value propositions for each of your buyer personas, you will have taken a large step toward identifying the marketing content you need.

The Limits of Marketing ROI

2010-04-04T16:23:00.001-05:00

For the past several years, B2B marketers have faced growing pressure to prove the value of their activities and programs. CEO's and CFO's are increasingly demanding that marketers monitor and measure the results of their activities and calculate the return on investment (ROI) produced by those activities.

ROI is now seen as the "gold standard" for measuring the performance of marketing programs. ROI has been used for decades to evaluate all kinds of investments, and it's widely accepted by financial professionals. Some marketers believe that calculating the ROI of marketing activities will enhance their credibility in the C-suite.

Marketing ROI is certainly an important metric, but like any tool, it must be used in the right way for the right job. There is no single "magic metric" that can fully capture the effectiveness of marketing. So, it's important for marketers (as well as CEO's and CFO's) to understand the limitations of ROI for measuring marketing performance. I'll talk about some of the limitations and complexities here, but there are many others.

The basic ROI formula is extremely simple:

ROI = Return / Investment

The basic formula for marketing ROI (MROI) is almost as simple:

MROI = (Return - Marketing Investment) / Marketing Investment

Unfortunately, however, this simple formula hides a number of complexities. For example, what does the term "Return" mean? Total gross revenues or incremental gross revenues? Total gross margin or incremental gross margin? Total contribution margin or incremental contribution margin? The best answer is incremental contribution margin, although incremental gross margin is also widely used.

But now I've introduced a new term - incremental contribution margin - that requires a definition. Contribution margin is easy to define. It's total revenues less variable costs. The incremental part of the term is more complex. Marketing ROI experts tell us that, ideally, a marketing ROI calculation will measure the incremental (new) returns produced by incremental (new) marketing investments. So, supposedly, we can use marketing ROI to calculate the return on investment of an expanded TV advertising program, or a new direct mail program, or a new social media program.

Or can we? How can we really know which marketing program actually produced the incremental (new) contribution dollars, especially when we are running several marketing programs simultaneously. This won't always be a huge issue. For example, if we run a direct mail campaign that incorporates a discount coupon, we can count the number of coupons that are actually redeemed. But even this may not provide a completely accurate answer. What if a new customer had already been predisposed to buy because of an earlier marketing program? Should the discount coupon campaign get all of the "credit" for the new contribution margin associated with this new customer?

I am not suggesting that calculating marketing ROI is the equivalent of putting on a blindfold and throwing darts at a target. There are, in fact, well-accepted methods for dealing with the kinds of issues I've just described. I am trying to make the point that most marketing ROI "models" are based on numerous assumptions and judgment calls about the definition and the "allocation" of both returns and costs. This does not mean that marketing ROI has no value. It does mean that MROI often appears to be more precise than it actually is.

Use an Importance - Performance Matrix to Get Marketing and Sales Talking

2010-04-01T08:36:00.000-05:00

In my last post, I discussed the importance of building a collaborative relationship between marketing and sales. The first step toward achieving this objective is to establish where your marketing/sales relationship is today, and one useful tool for describing the "current state" of the relationship is an Importance - Performance Matrix like the one shown below.

This matrix is used to capture the opinions of individual marketers and sales personnel about specific marketing and sales activities. Each activity is evaluated along two dimensions - the importance of the activity and how well the company (marketing and/or sales) is performing the activity.

The vertical axis of the matrix is used to describe the importance of the activity. Less important activities are placed in the lower portion of the matrix, while more important activities are placed in the upper portion. The horizontal axis of the matrix is used to describe how well the company is performing the activity. Activities that the company performs poorly are placed in the left side of the matrix, while activities that the company excels at performing are placed in the right side.

An Importance - Performance Matrix will often reveal wide gaps in the views of marketing and sales personnel and point to the issues you need to focus on in order to improve the marketing/sales relationship.

To illustrate the kind of information that an Importance - Performance Matrix can reveal, I'll use a highly simplified example. Suppose that we want to capture the opinions of marketing and sales personnel regarding the quality of leads provided by marketing to sales. Also suppose that our company has four marketers and ten salespeople. All fourteen people would complete a matrix, and then we would combine the responses in a single matrix. Individual responses are not personally identified, but we do identify which responses come from sales and which come from marketing.

The results of this hypothetical example are shown below. As you can see, both marketing and sales personnel view generating quality leads as important, but they differ significantly about how well marketing is performing this activity.

An Importance - Performance Matrix won't tell you how to resolve conflicts between marketing and sales, but it can identify the issues you need to address.

Beyond Alignment to Collaboration

2010-03-29T08:27:00.000-05:00

One of the hot topics today in B2B marketing is the need to create better alignment between marketing and sales. There is a growing recognition that marketing and sales are out of sync in many B2B companies. They often have widely different views about such fundamental issues as what kinds of companies make the best prospects and what constitutes a sales-ready lead. One major objective of improving the alignment between marketing and sales is to develop a common view regarding these basic issues.

Creating better alignment between marketing and sales is certainly important, but "alignment" doesn't adequately describe the kind of relationship that's really needed between marketing and sales. Today, a growing number of B2B companies realize that both marketing and sales activities are components of a single demand generation process. And to create and sustain a demand generation process that produces significant revenue growth, what's really needed is an active and close collaboration between marketers and salespeople.

Not that long ago, such active and close collaboration wasn't absolutely essential. In most B2B companies, the roles and responsibilities of marketing and sales were fairly distinct and independent. Marketing ran campaigns to raise brand awareness and generate sales leads, produced marketing collateral materials, and coordinated the participation in trade shows. Leads generated by marketing were passed along to sales and were rarely seen by marketing again. Salespeople had two basic jobs - to generate leads (prospect) and to take those leads (plus those supplied by marketing) and close sales.

This siloed approach to marketing and sales is simply not effective in today's business environment. Companies are encountering potential buyers long before they are ready to meet with a salesperson. So, marketing must play a larger role in nurturing prospects until they are ready to have a meaningful conversation with sales. And when a prospect does talk with a salesperson, he or she expects the sales rep to build on the existing relationship, not start over from scratch.

A collaborative relationship can help make the transition from marketing to sales nearly seamless, but the benefits of collaboration don't stop there. Salespeople are talking with prospects and customers every day, and they can provide marketers with real-time input about the issues that prospects are actively thinking about. Marketers can then use this information to develop new marketing content or modify existing content. On the flip side, marketers can provide salespeople with information about strategic developments and trends that are affecting potential buyers.

The bottom line is that B2B companies need an effective demand generation process in order to drive consistent revenue growth, and an effective demand generation process requires that marketers and salespeople work as a cohesive team.

Getting Specific About Value

2010-03-25T09:36:00.000-05:00

We now know that providing relevant content to potential buyers is essential for effective B2B marketing. One key to increasing the relevancy of marketing content is to make it more specific. Consider the following two statements:

"Our new ProWidget can enable you to reduce equipment downtime and improve manufacturing efficiency."
"Customers using our new ProWidget have reduced the cost of equipment downtime by an average of $100,000 per year."

Which of these statements is more compelling? I think it's clear that the second statement is more powerful because it's more specific.

To make marketing content more specific, you need to have a thorough understanding of how your products and services produce value for customers. In an earlier post, I explained how to build a customer value matrix that will provide detailed insights about this critical issue.

Now for a confession. You may need more than one customer value matrix to get a complete picture of how your products and services produce value for customers. This is likely to be true if you sell to more than one industry or type of business.

To understand why, we need to review a few principles about value. All products and services have features and attributes that enable certain jobs to get done. By providing ways to get things done, features and attributes produce benefits for the people and companies that use the product or service. The value of any product or service depends on the value of the benefits the product or service produces.

The catch is that the value of any particular benefit can vary significantly from customer to customer depending on the nature of each customer's business.

To capture these differences, you need to create a separate customer value matrix for each industry or major type of business you serve. After you've created your initial "catch-all" matrix, think about one of the industries of major types of business your serve. Go back through your catch-all matrix and create a separate version that is targeted to that industry or type of business. What you are likely to find is that some benefits or sources of value become much more important when you're focused on one particular type of business. This insight will enable you to develop content that is more specific, and therefore more relevant, to that industry.

Marketing Effectiveness vs. Marketing Efficiency

2010-03-22T09:01:00.000-05:00

Today's B2B marketers are facing growing pressure from the C-suite to improve the value provided by the marketing function. The value created by marketing depends on both the effectiveness and the efficiency of marketing activities. Marketing effectiveness and marketing efficiency are not conflicting objectives, but they are different. And both are necessary for marketing to create value.

The essence of marketing effectiveness is producing the required results. Are your lead generation programs producing enough new inquiries? Is your lead nurturing program converting enough inquiries into sales-ready leads? The measures of marketing effectiveness tend to be absolute numbers: number of inquiries, number of marketing-qualified leads, number of sales-ready leads, etc.

Marketing efficiency is all about delivering effective marketing programs at the lowest possible cost. Measures of marketing efficiency are typically expressed in dollars and are usually ratios: cost per inquiry, cost per sales-ready lead, etc.

Many of today's "best practices" in B2B marketing can improve both marketing effectiveness and marketing efficiency. For example, profiling your ideal customer, developing buyer personas for the people who make up your buying group, and creating content for each buyer persona can improve the effectiveness of your lead generation programs by increasing response rates. These same activities can also improve marketing efficiency by enabling you to target lead generation campaigns more narrowly.

So far, most efforts to improve marketing efficiency have focused on individual campaigns and programs. But recently, marketers have begun to focus on improving the efficiency of marketing operations. Marketing operations is the term for all of the activities required to perform the marketing function. Therefore, marketing operations would include coordinating the work of external marketing services firms, performing marketing research, and managing the procurement, production, and distribution of marketing collateral materials.

Marketers have started to realize that improving the efficiency of marketing operations can be a great way to conserve marketing dollars and stretch marketing budgets.

The bottom line - marketers must improve both marketing effectiveness and marketing efficiency to increase the value that marketing provides.

To Gate, or Not to Gate, Marketing Content?

2010-03-18T12:10:00.000-05:00

An ongoing debate in the B2B marketing community is whether a person should be required to register in order to gain access to marketing content. Requiring registration is usually called putting the content behind a "gate."

The arguments for and against registration are fairly easy to summarize. Proponents of requiring registration argue that for most B2B companies, the purpose of offering content is to generate leads, and you don't have a lead until a person identifies himself/herself. Without registration, content offers simply can't generate actionable leads.

Proponents of making content available without registration argue that this approach will cause your content to spread much further and thus make many more potential customers aware of your company. David Meerman Scott is an advocate of this view, and he shared an example to make his point in this blog post.

My view this that a significant amount of content should be made available without any registration requirement. Ungated content is becoming a critical component of B2B marketing because the way business buyers make purchasing decisions has changed dramatically.

We now know that B2B buyers are researching potential purchases long before they are ready to talk with a salesperson. Most of this research is conducted online and, increasingly, through the use of social media. We also know that B2B buyers are performing a lot of research anonymously. A recent survey by DemandGen Report and Genius found that:

70% of buyers began their research by using online search or by visiting a vendor Website
78% of buyers started their purchasing process with informal information gathering
44% or buyers conducted anonymous online research

The reality today is that many early-stage buyers are out there actively looking for useful information, but they aren't ready to "raise their hand" and identify themselves. Yet, many of these buyers will be prepared to engage with potential sellers later in the buying process. If you make valuable, high-quality content freely available to these early-stage buyers, you can create a favorable "first impression" and provide these buyers a powerful reason to engage with your company when the time is right.

Personalization Alone Doesn't Create Relevance

2010-03-15T13:19:00.000-05:00

Today's B2B marketers have more ways to reach out to customers and prospects than ever before. Digital technologies have created new marketing channels and enabled marketing techniques that would have been impractical, if not completely impossible, only a few years ago.

But despite the new marketing channels and technology tools, most B2B marketers are finding it more difficult to capture the attention of potential buyers and create the kind of engagement that leads to new business. Easy access to information makes B2B buyers less dependent on sellers than in the past, and our environment is filled with advertising and marketing clutter.

As I've written before, the real solution to overcoming these hurdles is to use marketing messages that are relevant to the problems and issues B2B buyers are facing.

The good news is that B2B marketers now have an array of tools to improve the relevance of marketing communications. Personalization technologies can enable marketers to create marketing messages that are customized for individual prospects. For example, marketers can use variable data printing to create direct mail pieces that are customized for each recipient. Other personalization technologies make it possible to create customized e-mail messages and Web pages.

The capabilities of personalization technologies are impressive, but it's important to remember that personalization alone does not necessarily create relevance. For some time, marketers have been personalizing marketing messages by including specific facts about the recipient - her name, job title, or company affiliation, for example - in the message. I call this explicit personalization, and the reality is that explicit personalization alone won't make an irrelevant message relevant.

Effective marketing can be defined as getting the right offer in front of a potential buyer at the right time. Information about a potential buyer - particularly the buyer's behavior - can be a powerful tool for determining what the right offer should be and when that offer should be presented. When personal information is used this way, the result is a personalized, customized, and relevant marketing message. What makes this kind of message different from one based only on explicit personalization is that the personalization is embodied in what the offer is and how it is presented, rather than in a collection of "facts" about the recipient.

All relevant marketing messages are in a very real sense personalized, but not all personalized messages are relevant.

For Effective Content Marketing, "Form Follows Function"

2010-03-12T08:29:00.000-06:00

When marketers decide to implement a content marketing program, there is a tendency to think first about content in terms of format. You might, for example, hear a marketer say something like, "We're going to need a few articles, two or three white papers, at least four customer case studies, and a Webinar."

This approach misses the mark. When you start planning the development of marketing content, the first thing to think about is the purpose or function of the content. As a whole, your marketing content has to perform three basic functions. I call these functions educate, demonstrate, and reassure.

Educate - This type of content is designed to help potential buyers understand the problem or issue they're facing and how the problem or issue can be addressed. Educational content is factual and mostly non-promotional. It focuses on your prospects' challenges and not on your company or your products or services. Educational content includes content that:

Explains the root cause of the problem/issue
Describes the ramifications of the problem/issue
Explains why it's important to address the problem/issue now
Describes how other companies have successfully addressed the problem/issue
Explains how to evaluate potential solutions

Demonstrate - Those of us who advocate content marketing stress the importance of providing content that is not self-promotional and not focused primarily on your company or your products or services. But prospective buyers who reach a certain point in the buying cycle will want and need to learn about a prospective vendor's solutions. So, you still need marketing content that "demonstrates" how your solution works and what specific benefits it provides. This includes marketing content that:

Describes the features/functionality of your solution
Describes the unique or differentiated benefits that your solution provides
Describes your company (history, values, etc.)
Demonstrates the value of your solution

Reassure - This type of content is designed to alleviate the fear that always surrounds a major purchase decision. In its groundbreaking BuyerSphere research project, Enquiro found that B2B buying decisions are usually driven by fear. More specifically, B2B buying is all about minimizing fear by reducing or eliminating risk. "Reassurance" content is content that helps buyers feel comfortable about purchasing your solution. The best kind of reassurance content is content that involves third parties - customers, industry experts, industry analysts, etc. Some examples are:

Customer success stories that prove the value of your solution
Customer success stories that validate ease of implementation and use
Analyst reports that show the financial stability of your company

In general, educational content is most relevant for buyers who are in the early stages of the buying cycle, demonstration-oriented content becomes important for those in the middle stages of the buying cycle, and reassurance content takes center stage in the later stages of the buying cycle.

Once you're sure that your content plan includes content that performs all three of these functions, then you can focus on specific formats.

Content Marketing Basics: Create Content for All Buying Stages

2010-03-08T08:23:00.000-06:00

To create engagement with today's B2B buyers, marketers must develop and use relevant and compelling marketing communications and marketing content. There is simply no substitute for relevancy when it comes to establishing and maintaining meaningful relationships with potential buyers.

In an earlier post, I described how to develop buyer personas. Personas enable us to create relevant marketing content because the process of creating personas forces us to develop a deeper understanding of the individual buyers we work with. Personas enable us to identify the issues and problems that our buyers are facing, and this allows us to develop marketing messages and marketing content that speaks directly to those concerns.

Developing content for each buyer persona is essential, but it's also critical to have content that speaks to where the buyer is in the buying process. That's because the kind of information that is most relevant to a buyer changes as he or she moves through the buying cycle.

The key to developing content for each stage of the buying cycle is to put yourself in the buyer's shoes and identify the questions that he or she is likely to have at each stage. Then, you create content that answers those questions.

There are many ways to describe the B2B buying cycle. Ardath Albee, author of eMarketing Strategies for the Complex Sale and the Marketing Interactions blog, uses a seven-step framework: Status Quo - Priority Shift - Research - Options - Step Backs - Validation - Choice.

Using Albee's framework, we can identify some of the questions that a buyer is likely to have at each stage of the process.

Status Quo - Why do I need to change? What are the ramifications of not changing? Has something happened in my industry that makes change necessary?

Priority Shift - Can the issue/problem be solved? What are the benefits of addressing the issue/problem? How have my peers and/or competitors dealt with the issue/problem?

Research - What are the alternative ways to address the issue/problem? What are the risks and benefits of the alternative approaches?

Options - What specific solutions should I consider? Which potential solution providers should I include in my short list? What are the features and functionality of each possible solution?

Step Backs - What happens if I don't have the resources to implement the proposed solution? What if I don't have real buy-in from my end users? What if the solution doesn't produce the promised results?

Validation - Why should I trust your company? What is my ROI if I purchase your solution? How can I be sure that the estimated ROI will actually be realized?

As you develop your questions, be as specific as possible, and keep in mind that you will need a separate set of questions for each buyer persona you've identified. This approach will enable you to develop rich and compelling content that will resonate with your buyers.

Yes, You Still Need "Promotional" Content

2010-03-04T13:12:00.000-06:00

In two recent articles, MarketingSherpa described the results of research into how technology buyers view e-mail offer content. The research was conducted by Bob Johnson with IDG Connect in partnership with MarketingSherpa, and it involved two surveys. One survey was directed to technology buyers. The second survey presented the same questions to B2B marketers. The marketers were asked to answer the survey questions based on what they believed motivated buyers.

One of the survey questions was, "Do each of the following offer types increase the likelihood a prospective buyer will click on a link to additional information and insight?"

Here are the top five types of content offers identified by buyers - based on the percentage of surveyed buyers who answered "yes" to the above question:

News and Articles - 84%
Competitive Comparisons and Buying Guides - 73%
Promotional Content - 70%
Educational Content - 65%
Free Research Reports - 64%

Here are the top five types of content offers identified by marketers:

Educational Content - 92%
Free Research Reports - 86%
Peer Best Practices - 79%
Competitive Comparisons and Buying Guides - 77%
Interactive Peer Comparison Tool - 74%

Only 42% of marketers said that an offer of promotional content would motivate buyers to act. Seems like we marketers may not know buyers as well as we would like to think.

Those of us who advocate content marketing stress the importance of using buyer-centric informational and educational content, and we argue that most marketing content should not be self-promotional (focused on my company or the features and attributes of my product or service). This is the right approach, but the key word in the previous sentence is most.

Prospective buyers who reach a certain point in the buying cycle will want and need to learn about a prospective vendor's products or services. Therefore, every company needs "promotional" marketing content that provides that information. The problem with promotional content comes when you use it with prospects who aren't ready for it.

In my next post, I'll explain the importance of mapping content to all stages of the buying cycle.

Content Marketing Basics: Developing Buyer Personas

2010-03-02T11:27:00.000-06:00

Effective content marketing requires a thorough understanding of your prospective buyers. Let's face it. It's awfully hard to really connect with someone you don't understand. That's why buyer personas must be a core component of your content marketing effort.

According to Adele Revella, author of the Buyer Persona blog, a buyer persona is, "a detailed profile of an example buyer that represents the real audience - an archetype of the target buyer." In her book, eMarketing Strategies for the Complex Sale, Ardath Albee defines a buyer persona as, "a composite sketch representative of a type of customer you serve."

Just to be clear, a buyer persona is a biograhpical sketch of a typical buyer. It is more than a job description. Buyer personas are written in narrative form, and they are written as if the archetypical buyer is a real human being. Buyer personas enable you to create more relevant and personalized communications, which is why they are so important for effective content marketing.

You will need to create a persona for each type of buyer who makes or significantly influences the decision to purchase your product or service. Most sales methodologies use categories to indentify buying roles. So, for example, you may have economic buyers, technical buyers, user buyers, and so on. I prefer to describe buyer types by job title or job function in additon to these buying role categories.

It's also important to identify the type of business the buyer works for. Buyers performing the same job function in different industries can have different issues, problems, or concerns. Therefore, you may need to create "industry specific" personas.

The next step in developing a buyer persona is to answer a series of questions about the buyer. Here are some examples:

What are the buyer's major business objectives and job responsibilities?
What strategies and tactics does the buyer use to achieve his objectives and fulfill his responsibilities?
What meaures are used to evaluate the buyer's job performance?
What issues and problems keep the buyer awake at night?
How old is the typical buyer? [Age range is OK]
Is the buyer typically male or female?
What is the buyer's educational background?
What sources does the buyer turn to for information?
How would the buyer describe the issues he or she is facing?

In my earlier post about developing a customer value matrix, I recommended using a cross-functional team that includes both marketing and sales personnel. That approach also works well for developing buyer personas.

Content Marketing Basics: First Understand How You Create Value

2010-02-22T08:26:00.000-06:00

The first step in creating an effective content marketing program is to identify and describe all of the significant ways that your products or services create value for customers. Creating buyer personas, describing the stages of your customers' buying process, and developing content for each buyer persona and for all stages of the buying cycle are all essential steps in building an effective content marketing program. But I contend that it's critical to start with a thorough understanding of how your products or services create value for customers.

Knowing how your products or services create value tells you what issues and problems you can help customers solve and what benefits customers can gain by using your products or services. When you combine this knowledge with good buyer personas and then apply good content marketing principles, you can create exceptional marketing content.

To develop a complete picture of how your products or services create value, you should assemble a cross-functional team and construct a customer value matrix for each of your product or service offerings. The team should include both marketing and sales personnel and could also include customer service and other support personnel.

The first step in building a customer value matrix is to identify all of the reasons that people might have for purchasing a product or service like yours. These reason-to-buy statements should describe a basic need, issue, or pain point and the logical explanation for the need, issue, or pain. The best format for reason-to-buy statements is I or We want or need to do something because of some reason. Be sure to include reason-to-buy statements for all of the people (or groups of people) in the customer organization who would be significantly affected by your product or service. This broad-brush approach will help you identify the people who will make or influence the decision to purchase your product or service and the buyer personas you will need to create.

Once you have listed all the reasons to buy, add the following information for each reason.

Affected Parties - Who is affected by the need, issue or problem described in the reason to buy? Who has the most to gain if the need, issue or problem is resolved, and who has the most to lose if it isn't? Use job titles or job functions to describe the affected parties.

Desired Outcome - The specific results that the affected parties want to achieve with respect to the reason to buy. The desired outcome will resolve the need, issue, or problem described in the reason to buy.

Solution Component - The specific features or functions of your solution that will resolve the issue described in the reason to buy and enable the desired outcome. This can be an attribute or feature of the product or service, a characteristic of how you produce or deliver the product or service, or a particular capability that your company possesses.

Value Measure - The specific way that your product or service creates value with respect to the reason to buy. Your solution can create measurable value by enabling the customer to reduce existing costs, avoid future costs, or increase revenues. Your task here is to identify the specific kinds of costs that will be reduced or avoided or the kinds of revenues that will be increased.

Building a complete customer value matrix takes time and effort, but when it's done right, the matrix will provide a comprehensive picture of how a product or service creates value. And understanding how a product or service creates value provides the foundation for an effective content marketing effort.

Content Makes Marketing and Sales a Value-Adding Process

2010-02-19T08:18:00.003-06:00

The forces that are reshaping the B2B marketing landscape have given rise to a new marketing discipline - content marketing. There's little doubt that content marketing will be a driving force in B2B marketing in 2010. According to a recent survey by Junta42, 59 percent of marketers plan to increase spending on content initiatives in 2010, up from 56 percent in 2009, and 42 percent in 2008. A study by the Custom Publishing Council found that branded content accounted for 32 percent of the average overall marketing, advertising, and communications budgets in 2009. The CPC said that this is the greatest ever proportion of total marketing/communications funds dedicated to branded content. It's not insignificant that just this week, the Custom Publishing Council changed its name to Custom Content Council.

What is content marketing? Joe Pulizzi, co-author of Get Content. Get Customers. says that, "Content marketing is a marketing technique of creating and distributing relevant and valuable content to attract, acquire, and engage a clearly defined and understood target audience - with the objective of driving profitable customer action."

Content marketing has become a critical discipline because B2B buyers are increasingly researching buying decisions online, and they are delaying conversations with salespeople until much later in the buying cycle. So, marketing content must carry a heavier load in the overall demand generation process. Adam Needles at the Propelling Brands blog puts it this way: "What is interesting is that this type of interaction is what you might have once thought of as a dialogue with the sales person - except in this context it is dialogue being managed by a marketer . . ."

Content marketing is a tested and proven technique, and we can identify several "best practices" for creating great content. I'll describe those best practices in future posts. But content marketing is still a relatively new discipline, and it requires a different way of thinking. I believe it helps to place content marketing into a larger context.

To put content marketing in the proper perspective, think of your marketing and sales activities and programs as being part of a process that must in itself create value for customers. In other words, treat the marketing and sales process as if it is another service that you offer to customers. You wouldn't expect a company to purchase your products or services if they don't provide value to that company. If your marketing and sales process doesn't provide value to potential buyers, your shouldn't expect them to engage with you in that process.

And how do marketing and sales create value for potential buyers? By providing information and tools that help them make better purchasing decisions. More specifically, marketing and sales activities create value for potential buyers by helping them understand:

The full ramifications of an important business issue, challenge, or problem
How the issue, challenge, or problem can be addressed
How they should evaluate potential solutions
Why your solution is the right one for their organization

Content marketing is the vehicle for providing this kind of information to potential buyers. Therefore, once you start treating marketing and sales as a process that must provide real value for prospective customers, the logic behind content marketing becomes clear and compelling.

Why B2B Marketing is Like Curling

2010-02-12T08:29:00.004-06:00

The 2010 Winter Olympics begin tonight in Vancouver, and I'm sure that I will watch at least a few minutes of the curling competition at this year's Games. I'm not really sure why I'll watch because curling is definitely not an exciting sport. If you're not familiar with curling, it's a little like shuffleboard (true curling fans, please forgive me). The big difference is that curling is played on a rectangular sheet of ice and involves sliding a large, polished granite stone weighing about 40 lbs toward a target painted on the ice. The playing surface is prepared by spraying water droplets (called "pebble") onto the ice. Because of friction between the stone and the pebble, the moving stone will turn or "curl" to one side or the other.

After one team member "throws" the stone toward the target, two other team members accompany the stone as it moves down the ice and guide it toward the desired position on the target. The catch is, these players are not allowed to actually touch the moving stone. Instead, they use long-handle brooms to sweep the ice in front of the stone. Sweeping temporarily melts the top of the ice and thus reduces the friction between the stone and the ice. By reducing the friction, sweeping changes both the speed and the direction of the stone. Knowing when and how much to sweep is a critical skill in curling.

In some ways, curling provides a good metaphor for describing the job faced by today's B2B marketers and salespeople, particularly those involved in selling complex products or services (such as, for example, marketing services). As I've written before, B2B buyers are now firmly in control of the purchasing process. They determine when and how they will research purchasing decisions and when and how they will interact with potential suppliers. They also decide how quickly they will move through the buying process. In these circumstances, the most important job for the seller (whether a marketer or a salesperson) is to provide prospective buyers with the information they need when they need it.

Like the sweepers in a curling match, your main job is to reduce the friction that slows prospects down and causes them to veer off course. You would like to be able to directly lead your prospects through the buying process. That would be the equivalent in curling of touching the stone, and that's against the rules. In today's B2B buying environment, attempting to push your prospects through the buying process toward your desired objective on your schedule just doesn't work - at least not very often.

You can't dictate what buying decisions your prospects will ultimately make, and you can't completely eliminate friction from the buying process. But if you consistently provide information that is useful and valuable to your prospects and appropriate to where they are in the buying process, you can help them move more easily through the process and, even more importantly, make better buying decisions. This also means, by the way, that you're likely to win more sales.

Automating B2B Marketing

2010-02-10T07:50:00.003-06:00

Three forces are shaping today's B2B marketing landscape - the growing power of B2B buyers, the need to make marketing messages and materials relevant to potential buyers, and the recent emergence of technology tools that automate many marketing tasks. I've covered buyer empowerment and the importance of relevant marketing communications in previous posts. This post will focus on marketing automation technologies.

By the way, if you want to dig deeply into the topic of B2B marketing automation, I highly recommend that you read David Raab's Customer Experience Matrix blog. This post will briefly cover the major points.

B2B marketing automation systems - also called demand generation systems - are software tools that are designed to help marketers acquire, nurture, qualify, and distribute leads to sales. Demand generation systems automate four types of B2B marketing tasks.

Lead Generation - All demand generation systems enable users to create and execute lead generation e-mail campaigns. Demand generation systems can also host landing pages and the forms that are used to capture campaign responses, and they can use cookies to track visits to Web pages at a company's main Website in addition to the campaign landing page(s). Support for channels other than e-mail and Web pages is inconsistent. For example, if a lead generation campaign involves direct mail, the direct mail component must usually be managed outside the demand generation system.

Lead Nurturing - Lead nurturing is the process of communicating with prospects on a regular basis until they are ready to buy. For example, a lead nurturing program might involve sending a prospect a particular sequence of e-mails on a specified schedule. Demand generation systems automate the execution of lead nurturing programs. Automated lead nurturing is probably the most important feature of demand generation systems because nurturing programs are difficult to implement without automation.

Lead Scoring - Lead scoring is a method of qualifying prospects by assigning numerical "points" based on information provided by the prospect and on the prospect's behavior (e-mails opened, white papers downloaded, Webinars attended, etc.). All demand generation systems allow users to define scoring criteria and assign scoring values to those criteria.

Lead Distribution - When a prospect's lead score reaches a pre-determined value, the lead is deemed to be sales ready, and the demand generation system passes the lead to sales. Other events can also be used to trigger a hand-off to sales. Demand generation systems are usually configured to distribute leads to sales automatically when these triggering events occur. Most, if not all, demand generation systems offer integration with salesforce.com, and some vendors offer integration with other sales automation and CRM products. This integration makes distributing leads virtually seamless.

Forrester Research has estimated that only 2 to 5 percent of B2B companies have implemented demand generation systems. My take is that this market is on the cusp of a huge growth spurt. I believe this growth will occur for three reasons. First, demand generation systems exist for virtually all sizes of B2B companies. Monthly costs start as low as $200. Second, all of the major demand generation systems are sold as a hosted solution, which means that companies don't need extensive IT resources to implement and use them. And finally, there is a growing body of evidence from early adopters that demand generation systems can significantly improve marketing and sales performance.

If you are a corporate marketer and you haven't already invested in a demand generation system, you should start looking at these technologies now. If you are a marketing services firm, you need to be thinking about how you can help your clients leverage the capabilities of demand generation technologies.

There's No Substitute for Relevancy

2010-02-08T08:10:00.003-06:00

In my previous post, I described some of the characteristics of today's B2B buyers, and I said that because of easy access to information, business buyers now essentially control the buying process. Buyer empowerment is one of three forces that are shaping the B2B marketing landscape. Just like moving water shapes the physical world, these three forces are redefining what effective B2B marketing is and how it's done. The third force is marketing automation technologies, and I'll cover this topic in my next post.

The second force driving fundamental change in B2B marketing is the growing need to create and use marketing communications and materials that are relevant to potential buyers. Relevance has become a necessity for two reasons. First, our environment is filled with marketing and advertising clutter, and the clutter is getting worse, not better. As marketing clutter increases, the effectiveness of generic, self-promotional marketing messages decreases. B2B buyers simply tune them out. Second, today's B2B buyers are incredibly busy. Their time is their most precious commodity, and they protect it at all costs. If a buyer doesn't see your message as relevant, he or she will ignore it.

The dictionary definition of relevant is, "having significant and demonstrable bearing on the matter at hand." Therefore, to be relevant, a marketing message must speak directly to an issue, problem, challenge, or outcome that's important, or at least interesting, to the potential buyer.

To create relevance, you have to know two things about your potential buyer. First, what role does the buyer play in his or her organization, and how will your products or services create value for this specific buyer? How do they make his life easier? What problems do they help her solve? Most B2B sales involve several "buyers" and these buyers will have different needs, issues, and problems. This means that you need to create marketing messages and materials that are customized for each type of buyer you typically encounter. In an upcoming post, I'll describe how you create buyer "personas" and then develop marketing materials for each persona.

The second thing you need to know is where the buyer is in the buying cycle. This is important because the kind of information that a potential buyer will find relevant changes as he or she moves through the buying process. For example, a prospective buyer who has just started to focus on a particular problem will likely welcome a white paper that explains the ramifications of the problem and the benefits of solving the problem. That buyer would not be as likely to welcome a product brochure at this stage of the buying process. So your marketing messages and materials must also speak to where your prospect is in the buying cycle.

The growing need to make marketing messages and materials relevant multiplies the amount of marketing content you need and, therefore, complicates the B2B marketing process. But relevance is absolutely essential to reach today's B2B buyers.

The Age of the Self-Directed Buyer

2010-02-03T09:54:00.003-06:00

The starting point for understanding the new face of B2B marketing is the fundamental shift in power from B2B sellers to business buyers. Now more than ever before, prospective buyers control the buying process. They decide when and how they will access information and research purchasing decisions and when and how they will interact with potential suppliers.

A good analogy is the self-directed learning courses offered at many universities. The course requirements are spelled out, textbooks and other course materials are identified, and mileposts (required exams, papers, etc.) are established. Then students study at their own pace to complete the course. In the world of B2B marketing, we're now living in the age of the self-directed buyer.

The driving force behind the empowerment of business buyers is the Internet. The Web has put a huge volume of information about almost every conceivable product and service at the fingertips of business buyers, and they've become convinced that they can find whatever information they need, whenever they need it, on their terms. In fact, the Internet has become the primary source of information for many business buyers. According to a survey by Forbes Insights, 81 percent of business executives who are under 50 years of age use the Internet daily to gather business information.

Last fall, Adam Needles provided a detailed discussion of the changing nature of B2B buyers in an excellent post at his Propelling Brands blog. He identified four major characteristics of today's B2B buyer.

B2B buyers are using online sources of information (especially early in the buying cycle) to research purchasing decisions, and they are delaying conversations with vendor's sales reps until late in the cycle.
B2B buyers are leveraging social media to collect information and opinions about prospective vendors, products, and services.
B2B buyers are using several communications channels to research purchasing decisions.
B2B buyers are increasingly part of a "buying unit" rather than acting as a single decision-maker.

The bottom line is that easy access to information makes business buyers much less dependent on sellers than in the past, and this means that many traditional marketing and sales techniques and practices don't work as well as they once did.

What is working today? That's what we'll discuss in future posts.

2010-02-02T14:11:00.003-06:00

Welcome to the B2B Marketing Directions blog.

Before a writer puts pen to paper - or fingers to keyboard - he or she should think through a couple of questions. What is the purpose and what are the objectives of what I am about to write? And, who am I writing for?

The purpose of this blog is to discuss the profound changes that are occurring in the world of marketing, specifically business-to-business marketing. "The Internet changes everything." That's a cliche, of course, but it's also an indisputable reality for B2B marketers. One of our primary objectives here is to describe how the Web is transforming the practice of B2B marketing and what strategies B2B marketers can use to succeed in this new marketing environment.

As far as the "who" question is concerned, this blog is designed primarily for marketers in small and mid-sized B2B companies and for marketing practitioners in small and mid-sized marketing services firms - advertising agencies, direct marketing agencies, graphic design firms, and print service providers who are repositioning their companies to offer marketing services.

Why the focus on marketing services firms? Two reasons. First, changes in the way B2B marketing is done are also changing the competitive structure of the marketing services industry. As the popularity and use of some marketing channels have declined, firms that operate in those channels must broaden their services in order to find new revenues. Even firms that are not focused on "declining" channels need to diversify because their clients want to use new marketing techniques and to integrate their marketing activities across an ever-increasing number of marketing channels.

This diversification takes firms into new territory and usually means they must acquire or develop new business capabilities. Diversification also means that the marketing business is getting more competitive as the internal boundaries that once separated different kinds of firms are blurring. The firms that master the right new marketing techniques will win.

Second, marketing services firms are B2B organizations. So, the forces that are changing the B2B marketing landscape are also changing the approach that marketing services firms must use to effectively market their services.

The bottom line? It's a new world for B2B marketers whether they're in B2B companies or B2B marketing services firms. Our goal here is to provide ideas and information that will help B2B marketers successfully navigate the new terrain.