Sunday, June 24, 2012

In Marketing, More Isn't Necessarily Better

About once a month, I am publishing a post that shares insights I've discovered at another blog. This month, the insight comes from the Harvard Business Review blog. The HBR blog publishes content that is written by numerous authors and includes posts that discuss a wide range of business topics.

Last month, Karen Freeman, Patrick Spenner, and Anna Bird with the Corporate Executive Board wrote a series of three blog posts discussing the findings of a recent CEB survey that involved over 7,000 consumers worldwide. Those three posts were:
While the CEB study focused on consumers, the basic findings are applicable to business buyers and are therefore relevant for B2B marketers.

For me, the most significant finding in the CEB survey is that consumers are overwhelmed by the volume of information they're exposed to and the choices they're presented with, and as a result, many are making purchase decisions differently than in the past. The authors of these blog posts refer to this condition as "cognitive overload."

Because of cognitive overload, the traditional purchase funnel (consumers moving from awareness to interest to desire to action and reducing the number of options they consider along the way) no longer describes how most consumers actually buy. According to the study:
  • Only about one third of consumers now use the traditional funnel approach when they buy.
  • About 30% of consumers follow an open-ended purchasing path. The perform a lot of research, and they add and drop brands along the way.
  • Another 30% of consumers don't perform a search at all. They simply zero in on a single product or brand.
What does this mean for marketers? In the last post in the series, the authors identify three myths that they believe are "dangerous" for marketers.
  • Most customers want to have "relationships" with brands - Only 22% of consumers in the CEB study said they have a relationship with a brand. The authors argue that most consumers reserve relationships for family, friends, and colleagues.
  • Interactions build relationships - The CEB study found that shared values, not frequent interactions, are the main reason that consumers decide to have a relationship with a brand.
  • The more interactions the better - The authors say that there's no correlation between the number of interactions with a consumer and the likelihood that he or she will complete a purchase, make repeat purchases, or recommend the brand.
This last myth may be the most dangerous one of all. The conventional wisdom among marketers today is that producing new and valuable content on a frequent basis is a critical success factor. And with marketing automation technologies, it's never been easier to communicate with prospects and customers on an individual, personalized level.

The problem is, even relevant and "helpful" interactions are adding to the avalanche of information that's inundating business buyers. Most of these buyers might well appreciate marketers who understand that less can often be better.

Sunday, June 17, 2012

Why Lead Nurturing Needs a Human Touch

It's now clear that nurturing leads is critical for companies with long sales cycles. Several research studies from a couple of years ago revealed that only about 25% of new sales leads were ready to have a meaningful sales conversation. I suspect the percentage is even lower today. Several studies have also found that most of these prospects will eventually buy. Lead nurturing is the mechanism for maintaining a relationship with these "lukewarm" leads until they are ready to buy.

Until recently, most B2B companies relied on salespeople to handle lead nurturing. They expected their sales reps to manage prospects through the entire buying process. The problem is, this approach no longer works very well because today's buyers are self-educating, and they are avoiding interactions with salespeople until later in the buying process.

As a result of these changes in buyer behavior, many companies have shifted the responsibility for lead nurturing from salespeople to the marketing department. Many companies have also implemented B2B marketing automation/lead management technology solutions to automate the execution of lead nurturing programs.

I agree that marketing should have the primary responsibility for managing the lead nurturing process, and I recognize that B2B marketing automation technologies can enable highly sophisticated lead nurturing programs. However, I also believe that lead nurturing needs a human touch to achieve maximum results.

Marketing automation systems provide an impressive set of communication capabilities, but there is no real substitute for human-to-human communications. When you have a personal conversation with a prospect, you have the potential for a richer exchange of information. A personal conversation with a prospect provides three distinct advantages over automated lead nurturing communications.
  • It enables you to accurately assess how interested a prospect is in your product or service and where the prospect is in the buying process. This produces more accurate prospect qualification than automated lead scoring systems can deliver on their own.
  • It allows you to discover and then explore issues or topics that arise unexpectedly, and these unanticipated discussions can often provide insights that enable you to help the prospect move forward in the buying process in a more expedited fashion.
  • It enables the seller's representative to establish a personal "connection" with the potential buyer and begin the human-to-human relationship that will be needed to produce a sale.
So, how do you add a human touch to your lead nurturing programs? The simple answer is, you design it in. When you map out your lead nurturing program, include an appropriate number of outreach calls by a designated outside salesperson or inside sales rep/business development person. Many marketing automation software systems enable you to include "non-automated" activities in your lead nurturing programs, so including outreach calls is not usually a major issue.

Automated lead nurturing programs are powerful marketing tools, but the best lead nurturing programs also include person-to-person communications that enable you to leverage human insight and human judgment.

Sunday, June 10, 2012

What To Do When Growth Stalls

The fundamental purpose of marketing is to generate revenue and drive revenue growth. Everything we do as marketers is (or should be) focused on achieving this ultimate objective. In The End of Marketing As We Know It, Sergio Zyman captured this principle succinctly when he wrote, "The sole purpose of marketing is to get more people to buy more of your product, more often, for more money."

Marketers spend most of their time and energy creating and executing programs that are designed to increase revenues from their company's core business. Some companies have a vibrant core business that provides plenty of growth opportunities, but many companies operate in mature markets where growth is more difficult to achieve. In addition, most markets evolve from a "growth stage" to a "mature stage," so even if a company's core business is producing healthy growth today, that can change quickly.

When the growth of the core business slows, company leaders will likely start to think about some kind of business expansion. Expansions that take a company "beyond the core" are always strategic business moves that require thorough evaluation. In my view, marketing should play the leading role in evaluating such expansion opportunities. Marketers have (or should have) the specific skills needed to analyze the growth potential presented by new markets. In fact, I contend that marketers should always be evaluating potential expansion moves, so that they are always prepared to provide senior company leaders a range of viable strategic options for increasing growth.

One of the more attractive growth opportunities for most companies is adjacent market expansion. An adjacent market expansion is a move by a company into a market that is related to the company's core business. As the diagram below illustrates, there are four primary ways to move into an adjacent market.
  • Sell core products or services to new types of customers
  • Sell new products or services to existing types of customers
  • Open new selling channels
  • Move into new geographic market areas

Adjacent market expansions can produce significant growth, but like all business expansions, they carry substantial risks. As the "distance from the core" increases, so does the risk, and that means adjacent market expansions require careful evaluation.

Any marketer who is evaluating a potential adjacent market expansion must answer two critical questions:
  • Does the adjacent market offer significant opportunities for long-term profitable growth?
  • What must my company do to win in that market?
My new white paper - Cracking the Growth Code:  Winning Profitable Growth from New Markets - describes a four-step process for evaluating adjacent market growth opportunities. It explains how to define your current core business, identify potential adjacent market opportunities, evaluate the economic attractiveness of an adjacent market, and measure your odds of winning in an adjacent market.

If you'd like a copy of the new paper, just send an e-mail to ddodd(at)pointbalance(dot)com.

Sunday, June 3, 2012

How Stealth Buyers Change the Rules for B2B Demand Generation

Sixteen years ago, Andrew Grove introduced the business community to something called a strategic inflection point. In his best-selling book, Only the Paranoid Survive, Grove described strategic inflection points as follows:

     "For now, let me just say that a strategic inflection point is a time in the life of a business when its fundamentals are about to change. . . They are full-scale changes in the way business is conducted, so that simply adopting new technology or fighting the competition as you used to may be insufficient."

By this definition, B2B marketing and sales have clearly reached a strategic inflection point. Over the past decade, B2B demand generation has changed in fundamental ways. Many tried and true marketing and sales techniques and tactics no longer work as well as they did in the past. Fewer people are going to trade shows, potential buyers are less likely to accept or return sales prospecting calls, and it's harder to entice prospects to respond to direct mail and e-mail campaigns.

Strategic inflection points occur when there is a dramatic change in the business environment that alters the ground rules for success. In the case of B2B demand generation, that change is the shift in power from sellers to buyers. Business buyers now have easy access to a wealth of online tools and information, and this makes them much less dependent on potential vendors and their sales reps.

As a result, potential buyers are self-educating, and they are postponing personal interactions with salespeople until later in the buying process.
  • A recent study by the Corporate Executive Board reported that B2B buyers are 57% of the way to a buying decision before they are willing to talk to a sales rep.
  • In a survey last year by DemandGen Report, 77% of B2B buyers said they did not talk with a salesperson until after they had performed independent research, and 36% of buyers said they didn't engage with a sales rep until after a short list of preferred vendors was established.
For B2B sellers, what's even more concerning is that potential buyers can perform their research and self-education under a cloak of anonymity. They can run a Google search about your company or your products or services, visit your website, or read what others are saying about you on social networks all before you even know who they are. These stealth buyers will begin forming opinions about your company and your products or services long before they identify themselves, if they ever do.

The ability of business buyers to perform research and self-education anonymously requires nothing less than a new approach to B2B demand generation. In the face of a strategic inflection point, continuing to do the things you've always done or making small changes at the margins won't be sufficient.

So, what can B2B marketers and sales professionals do to make demand generation work in this new and far different environment? Here are three essential starting points.
  • Recognize that marketing must play a larger role in the demand generation process. Many B2B companies have traditionally relied primarily on salespeople to find and win new customers. Sales efforts are still important, but it's now clear that marketing content is often the only effective and efficient way to create engagement with empowered and independent buyers. For many companies, this will require an increased investment in marketing.
  • Accept that you can no longer push prospects through the buying process any faster than they are willing to move. In today's environment, the primary job of marketing and sales (after creating initial engagement) is to eliminate the friction that slows prospects down.
  • Understand that your marketing content and your marketing and sales process must provide value to potential customers. If you want to stand out from the crowd, you must be able to provide valuable insights that prospects cannot easily obtain from other sources.