Sunday, September 29, 2013

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

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

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

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

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

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

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

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

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

Sunday, September 22, 2013

How to Make the Cost of Delay Visible to Your Prospects

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

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

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

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

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

The basic cost of delay formula is:

Average Solution Benefits - Average Solution Costs

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

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

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

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

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

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

Monthly CoD = $2,457.31

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

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

Saturday, September 14, 2013

Stop Wasting Your Time on Superficial Personalization

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

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

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

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

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

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

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

Sunday, September 8, 2013

Why You Need Customer Success Content

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

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

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

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

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

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

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

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

Sunday, September 1, 2013

When Marketing to Existing Customers Really Matters

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

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

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

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

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

When Customer Profitability Requires Multiple Purchases

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

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

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

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

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

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

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