Sunday, March 31, 2013

Identifying the Questions Your Prospects Need to Answer

At the most basic level, successful B2B marketing and sales depend largely on having solid answers to four questions:
  • Why do companies and businesspeople buy products or services like those we provide?
  • How do our products or services create value for our customers?
  • What differentiates our products or services from those offered by our competitors?
  • How do our prospects make buying decisions?
Of these four issues, many B2B marketers and salespeople have the least understanding of how prospects actually make buying decisions. In the 2013 Sales Perforance Optimization survey by CSO Insights, only 9.6% of respondents said that their ability to understand their customer's buying process exceeded espectations.

Over the years, marketing and sales professionals have developed several models to describe the B2B buying process. Some still use the Awareness-Consideration-Evaluation-Purchase model that's been around for decades. The SiriusDecisions model depicted below is another widely-used representation of the B2B buying process.

Models can help us understand the buying process, but all buying process models have two important limitations. First, they inevitably make the decision-making process more linear and less complicated that it actually is. And second, buying process models don't contain all of the information you need to design effective demand generation programs or develop relevant and compelling marketing content.

Because of these limitations, I use a different approach when I work with clients on demand generation/content marketing programs. What we do is identify the questions that prospects will need to answer to feel comfortable making a buying decision. These questions are developed for each relevant buyer persona, and they are also formulated with a specific product or service in mind. These critical questions are part of what Ardath Albee called a "buyer synopis" in her great book, eMarketing Strategies for the Complex Sale.

To illustrate how this works, the table below shows some of the types of questions that would likely be included in any buying process for a complex product or service. For this example, I've collapsed the six-step SiriusDecisions buying process model into three broad buying process phases - Discovery, Consideration, and Decision. The questions in this table are general, and when you develop buying process questions, you'll want to include several that relate specifically to your product or service.

Developing an extensive list of buying stage questions helps you understand how your prospects think whey they're evaluating a prospective purchase. Just as important, it helps you design effective demand generation programs by enabling you to pinpoint the issues your marketing content resources need to address to move prospects through the buying process.

Sunday, March 24, 2013

Why You Need to Think Twice About Cold Calling

The effectiveness of cold calling as a lead generation tactic is still a much-debated topic in B2B marketing and sales circles. Many thought leaders and practitioners contend that cold calling is no longer an effective and efficient way to generate new sales leads. It's also clear, however, that many B2B companies still rely heavily on their salespeople to find new leads through a variety of prospecting activities, including cold calling.

Unfortunately, most of the "evidence" used to argue for and against cold calling has been anecdotal at best, and the lack of empirical data regarding the efficacy of cold calling makes the debate interesting, but not necessarily useful for decision making.

Recent research by Baylor University's Keller Center for Research takes an important step in quantifying the effectiveness of cold calling as a lead generation tool.

The Keller study involved 50 real estate agents who made a total of 6,264 cold calls over a two-week period. The agents were using a generic, random list of telephone numbers from a geographic area not previously marketed to by the agent. So, these were truly cold calls.

Here's an overview of the study's major findings:
  • Of the 6,264 calls placed, 17% were non-working numbers, 55% were not answered, and 28% were answered.
  • Of the 1,774 calls that were answered, 1,612 of the prospects (91%) were not interested in the offering or refused to provide additional information.
  • The agents involved in the study generated 19 appointments with prospective clients and received 11 referrals as a result of the calling effort.
  • The agents had to make 209 calls to obtain one appointment or referral.
  • The overall "success rate" for the calling effort was 0.5% (30 appointments and referrals / 6,264 calls placed).
  • The authors of the study assumed that "bad" calls (non-answers and non-working numbers) required (on average) one minute per call and that answered calls required (on average) five minutes per call. Based on these assumptions, it would take about 7.5 hours to make 209 calls and obtain one appointment or referral. (In other words, based on the authors' assumptions, it would take one full day of calling to get one appointment or referral.)
Does the Keller study provide the "final" answer regarding the effectiveness and efficiency of cold calling for lead generation? I don't think so. For one thing, the study involved cold calling in a B2C setting, and I don't think the findings of the study can be projected to B2B cold calling. In a B2B setting, the results might be better or worse, but we shouldn't assume they would be the same. Nevertheless, the Keller study raises serious doubts regarding how effective cold calling can be.

Sunday, March 17, 2013

Let's End the Obsession with Marketing ROI

Periodically, I feel the urge to rant about the current obsession with marketing ROI. I say obsession, not because marketing ROI isn't a very important measure of marketing performance, but because marketers now seem to feel compelled to calculate the ROI (or a projected ROI) of almost every marketing activity - even when the ability to accurately measure ROI is questionable at best.

I published my last rant on this topic in January of last year, and Stop Trying to Measure Marketing ROI has become one of the most popular posts at this blog. I won't rehash all of the arguments here, but the biggest challenge in measuring the ROI of an individual marketing program is revenue attribution. In order to calculate the ROI of a marketing program, you must know how much incremental revenue the program produced. If you can't accurately attribute revenue to a marketing program, you can't calculate an accurate ROI.

I was thinking about this topic when I came across a post at the Harvard Business Review Blog by Alnoor Ebrahim, an associate professor in the Social Enterprise Institute at the Harvard Business School. Ebrahim's post discusses how three "social action" organizations measure the performance of their programs. The focus of the post is whether the organizations only measure the immediate outputs of their programs, or also attempt to measure ultimate impacts or outcomes.

For example, Acumen Fund is a venture philanthropy fund that invests in social enterprises in Africa and Asia. Its primary social metric is the number of lives reached in poor markets. If Acumen invests in a company that manufactures anti-malarial bed nets, it will count the number of nets made and distributed. Acumen does not try to measure ultimate outcomes such as reduction in malaria or improvements in health, because it believes that measuring ultimate outcomes is too complicated, expensive, and impractical.

Robin Hood Foundation is a grant-making foundation whose objective is to fight poverty in New York City. When Robin Hood makes educational grants, it first identifies a set of results that can be easily measured - increased school attendance, scores on standardized tests, and high school graduation rates. Then it attempts to find third-party research studies that correlate these near-term results to expected lifetime earnings or quality of life (the ultimate desired outcomes). Robin Hood uses these studies to estimate the ultimate benefits of the programs until direct measurement (or better research) is available.

Professor Ebrahim argues that organizations must be realistic about measuring ultimate impacts:  "Surely measuring impact matters but we need to be realistic about the constraints. It requires a level of research expertise, commitment to longitudinal study, and allocation of resources that are typically beyond the capabilities of implementing organizations. It is critical to identify when it makes sense to measure impacts and when it might be best to stick with outputs - especially when an organization's control over results is limited and causality remains poorly understood."

So, what does this have to do with marketing? I would suggest that the measurement challenges facing marketers are similar to those faced by these philanthropic organizations. Marketers would like to quantify the impact of every marketing program on revenue growth (the ultimate desired outcome), but that may not be realistic in some situations

In today's B2B marketing environment, prospective customers will be exposed to numerous marketing messages and programs over the course of their purchase journey. On top of that, for B2B companies that offer complex products or services, personal selling plays a significant role in driving new sales.

The issue is:  How do you accurately attribute revenues across all of the marketing and sales activities that play some role in the generation of those revenues? With the use of extensive, longitudinal testing and marketing mix modeling, it may be possible for a company to arrive at a reasonably accurate attribution of revenues. However, these techniques require significant expertise and can be very expensive to use. As a result, few companies go this far. Research by the Lenskold Group indicates that only 11% of companies use test and control groups, and only 3% use market mix modeling. Without these techniques, it can be all but impossible to accurately attribute revenues in a comlex demand generation environment.

For most companies, the more practical approach is to measure the outputs of individual marketing activities and to correlate those outputs to revenues without trying to attribute a specific dollar amount of revenue to each activity. With this approach, you can judge the value of an individual marketing activity without needing to use arbitrary revenue attribution to calculate ROI.

For a thorough and less "ranty" discussion of this topic, I recommend that you take a look at this recent post by Jon Miller at the Marketo B2B Marketing and Sales Blog.

Sunday, March 10, 2013

Three Questions Your Content Marketing Plan Must Answer

It's now abundantly clear that content marketing is a core marketing tactic for many companies. Research by the Content Marketing Institute suggests that nine out of ten B2B companies are using content marketing in some form.

Developing a content marketing program is a significant undertaking for any company. Not only does it require the creation of new content resources and the implementation of new marketing tactics, it also involves a fundamental shift in the philosophical approach to marketing.

When I'm talking with clients about implementing a content marketing program, one question that always comes up early in the conversation is: "How do I get started?" I always answer this question by saying that the first step is to develop a content marketing strategy and plan for the business. That answer usually leads to a second question:  "What should be included in a content strategy/plan?"

A complete content marketing plan will address numerous issues and contain significant detail, but at the most basic level, a content plan must answer three fundamental questions:
  • What issues or topics will the content resources address, and how will the resources be made relevant for potential buyers?
  • What digital and/or physical formats will be used for marketing content resources?
  • When and how will content resources be published, distributed, or otherwise brought to the market, and how will they be promoted?
Like the proverbial three-legged stool, the answers to these three questions define the core elements of your content marketing strategy and plan. What makes these three questions particularly critical is that they apply both to the overall content marketing plan and to individual content resources. In other words, every time you contemplate the creation of a new content resource, you need to determine what issues it will address and how it will be tailored for a specific target audience, what format will be used for the resource, and how the resource will be published, distributed, and promoted.

Of these three questions, the first is by far the most important. One of the biggest content marketing mistakes that I see companies make is allowing format, rather than message, to drive the content development process. Marketers sometimes say, "We need a white paper [or an eBook or a Webinar]," rather than, "We need a content resource that communicates message X to audience Y." If you want to create an effective content marketing program, think messaging first, and then format and distribution.

I've published several posts here that discuss how to make content messaging more effective. In case you missed those posts, here are the links:

Saturday, March 2, 2013

How to Avoid Marketing Automation Failure

I don't write frequently here about B2B marketing automation, primarily because there's a wealth of information already available on the subject. The marketing automation vendors (Eloqua, Marketo, Pardot, and several others) do a great job of providing resources that discuss the capabilities, use, and benefits of B2B marketing automation technologies. Understandably, these firms don't put quite the same emphasis on describing the challenges that B2B marketers must address to maximize the benefits of these powerful technologies.

Learning how other companies have leveraged marketing automation technology to improve business performance is useful, but it can be equally valuable to learn why some companies were not successful with marketing automation. Thanks to Joby Blume with BrightCarbon, we have some valuable insights regarding what can go wrong.

Last year, Mr. Blume published a remarkable blog post that described why a previous employer failed with marketing automation. This post triggered a huge number of comments, and the "discussion" continued for about six months. If you're considering an investment in marketing automation technology, this material should be required reading.

Mr. Blume described a dozen reasons for the marketing automation failure. His former employer was a small company - 40 employees/less than $5 million in annual revenues - so some of these reasons are particularly applicable to small firms. However, companies of all sizes can learn important lessons from Mr. Blume's experience.

Here are some of the major reasons cited by Mr. Blume, along with a few comments by me.

Lack of clear objectives - Blume's company wanted to track and identify website visitors and know where inbound leads had come from. Beyond this, however, the company didn't have clear goals for marketing automation.

Lack of marketing processes - Mr. Blume said that his company lacked a clearly defined set of marketing processes. My take:  Marketing automation will make well-designed processes more efficient and enable processes that would be impossible to perform manually. However, even the most powerful marketing automation technologies cannot overcome poorly-designed or non-existent processes. In fact, marketing automation will probably make any flaws in your marketing system more glaring and more painful. Therefore, before you invest in a marketing automation solution, you need to make sure that your underlying marketing and lead management processes are sound.

Lack of leads - Mr. Blume indicated that his company's biggest demand generation problem was not having enough leads and that marketing automation didn't solve that problem. My take:  The real strength of most B2B marketing automation solutions is lead management (nurturing, scoring, etc.). If your company needs to generate a higher volume of leads, your first priority should be to boost your lead acquisition marketing efforts, and most B2B marketing automation solutions play a very limited role in lead acquisition.

Lack of content - Mr. Blume acknowledged that his company did not have (and was not able to create) enough of the kind of marketing content that is required to generate leads effectively. My take:  Content is the fuel for the marketing automation engine, and marketing automation "burns" a lot of content. If you don't keep the fuel topped off, your marketing automation system will stop functioning effectively. Therefore, I usually recommend that companies plan and create all of the content resources they will need for about three months before launching the marketing automation system.

B2B marketing automation is powerful technology, and it's becoming more and more essential for marketing success. As with many other technologies, however, the hard part is not learning how to use marketing automation software. The more difficult challenge is doing the other work that's required to enable marketing automation to perform up to its potential.