Sunday, December 28, 2014

Our Most Popular Posts - 2014 Edition

This will be my last post of 2014, and I want to thank everyone who has spent some of his or her valuable time reading this blog. I hope that you have found the content here to be both thought-provoking and useful.

Thanks to analytics, I can see how many times each blog post has been viewed, and I thought this would be an appropriate time to share which posts have been most widely read. This ranking is based on cumulative total reads, and therefore older posts obviously have a built-in advantage.

So, in case you missed any of them, here are our five most popular posts.

An Inconvenient Truth About B2B Demand Generation - If you're a B2B marketer, measuring the dynamics of your lead-to-revenue funnel is critical to understanding how well your demand generation system is performing. This post shows that the demand generation system in many B2B companies is horribly inefficient and illustrates how much improvement is possible through the implementation of best practices.

Why Content Marketing is the Best Way to Build the Brand - Some respected marketing industry experts have argued that content marketing has made brand marketing or "building the brand" obsolete. This post argues that building the brand is still an essential marketing objective for B2B companies and that content marketing is now the best marketing tactic to use for branding. For another perspective on the importance of brand building, see Why B2B Branding Still Matters.

Use an Importance-Performance Matrix to Get Marketing and Sales Talking - A perennial favorite. This post explains how to use an importance-performance matrix to capture the degree of agreement or disagreement between marketing and sales regarding key demand generation activities. An importance-performance matrix won't tell you how to resolve conflicts between marketing and sales, but it will identify the issues you need to address.

It's Time to Integrate Marketing and Sales - Marketing and sales "alignment" has been a hot topic among B2B marketing and sales professionals for some time. This post argues that it may be time to move beyond mere "alignment" and actually integrate the marketing and sales functions. In a later post - Four Key Ingredients in the Marketing/Sales Integration Recipe - I discussed four critical requirements for integrating marketing and sales.

Why BANT No Longer Works for Qualifying Leads - One of the most widely-used methods for qualifying B2B sales leads is known by the acronym BANT, which stands for Budget-Authority-Need-Timeline. This post argues that BANT is no longer an effective way to qualify sales leads. In a later post - Rethinking the Value of of BANT (It's Not as Outdated as Some Suggest) - I revisited this topic and argued that the BANT criteria can still be useful for qualifying leads if they are used at the right times to answer the right questions.

Happy New Year, everyone!

Sunday, December 21, 2014

Why Print Marketing is Still Vital for Some Companies

The growth of digital marketing over the past few years has been nothing short of spectacular. According to Forrester's latest digital marketing forecast, digital marketing spend in the US will exceed $100 billion in five years, it will be about $13 billion more than television advertising, and it will represent 35% of all US advertising spend.

There's no longer any doubt that digital technologies are playing an increasingly important role in the path to purchase of both consumers and business buyers. This doesn't mean, however, that all non-digital forms of marketing have lost their effectiveness. In fact, recent research indicates that traditional print-based marketing channels and tactics are still a vital part of the marketing communications mix for some kinds of companies.

The Nielsen Research

In September of this year, The Nielsen Company published a report that focused on what sources of information consumers use to make buying decisions. The Nielsen report acknowledged the growing importance of digital technologies in consumers' path to purchase. For example, Nielsen expects that online sales of consumer product goods in the US will be 2.5 times higher in 2015 than they were in 2010.

What some people will find surprising is that Nielsen's research also reveals that print marketing is still an effective component of the marketing mix for retailers. Nielsen found that today, more than half of all US shoppers use printed circulars to obtain product and sales information, and the use of printed circulars is nearly 20 percentage points higher than the closest digital marketing touch point - email. Based on its research, Nielsen concludes that print is not dead for retailers and that digital won't be replacing print anytime soon.

The ABM Research

Research also shows that print marketing is still effective in the B2B space. Last year, The Association of Business Information & Media Companies (ABM) conducted an in-depth survey of almost 6,700 media end-users (readers, event attendees, etc.) to gain insights about how they are obtaining information to support business-related purchases. The survey focused on several kinds of digital and print media, and also included events such as conferences and trade shows.

The ABM survey found that 96% of end-users use both websites and print magazines to obtain business information. When asked what sources of information they use on a weekly basis, 73% of respondents said websites, 67% said e-newsletters, and 45% said print magazines.

ABM also asked survey participants to rate the importance of various sources of information in buying decisions. When asked about researching work-related purchases, the top three sources identified by respondents were:

  • Websites - 65% of respondents
  • Product information from manufacturers - 62%
  • Print magazines - 48%
When asked specifically what sources of information were important for learning about new products, services, or suppliers, the top three information sources identified by respondents were:
  • Websites - 80% of respondents
  • Product information from manufacturers - 73%
  • Print magazines - 69%
Key Takeaway

The growing importance of digital marketing channels and techniques is undeniable, but these research findings indicate that both consumers and business buyers are still using printed marketing materials to inform buying decisions. The evidence shows that potential buyers are increasing the number of information sources they use during their path to purchase. So, they are embracing the newer digital communication channels, but they are also continuing to rely on traditional, non-digital sources of information.

It's also clear from these studies and other research that younger buyers are more likely to use and rely on digital communication channels. Therefore, it's likely that, over time, non-digital marketing channels and tactics (including print-centric marketing) will become less important than they are today. For the intermediate future, however, print marketing will remain a useful and effective component of the marketing mix for many kinds of companies.

Sunday, December 14, 2014

Do Inbound Leads Cost Less? Maybe.

Advocates of inbound marketing frequently assert that leads acquired through inbound tactics cost less than leads obtained through outbound marketing techniques. The research usually cited to support this claim is the annual inbound marketing survey conducted by Hubspot. In the State of Inbound 2014 study, Hubspot found that in B2B companies having 51 to 200 employees, the average cost of an inbound lead was $70, while the average cost of an outbound lead was $220. Hubspot went on to say, "We did find that leads sourced through inbound practices are consistently less expensive than outbound leads, regardless of company size."

Hubspot has been conducting annual surveys for five years, and all have consistently shown that inbound leads are less expensive (on a cost-per-lead basis) than outbound leads.

Measuring the relative costs of acquiring leads through inbound and outbound marketing techniques can be useful and valuable, but marketers must keep two important points in mind. First, it's obviously critical to have an accurate picture of the costs. In many companies, inbound marketing work is done by internal employees, many of whom have other job responsibilities. Therefore, unless a company tracks labor costs on a activity basis, the costs associated with inbound marketing will often be understated.

It's also critical to remember that understanding the relative costs of acquiring leads through inbound and outbound marketing programs will not, in itself, tell you whether inbound marketing or outbound marketing is more valuable for your business.

To accurately measure the value of any lead generation tactic, you also need to know what quality of leads the tactic is producing. In this context, lead quality refers to the likelihood that a lead will actually make a purchase and become a customer. To incorporate lead quality into your evaluation, you need to use lead conversion rates to "translate" lead acquisition costs to the customer level.

I can illustrate how lead conversion rates impact lead costs with a simple example. The table below compares the costs of inbound vs. outbound leads at various stages of the lead-to-revenue cycle.

In this example, I'm using the following lead stages:

  • Inquiries
  • Marketing qualified leads (MQLs)
  • Sales accepted leads (SALs)
  • Sales qualified leads (SQLs)
  • New customers
The cost-per-inquiry values used in the above table are based on research by SiriusDecisions, and the conversion rates in the table for inbound leads are the conversion rates that SiriusDecisions says are achieved by the average B2B company. For illustration purposes in this example, I'm assuming that outbound leads convert at slightly higher rates than inbound leads - 2 percentage points at each lead stage.
As the table shows, the cost-per-inquiry for inbound leads is significantly lower than for outbound leads. At $25.00 per inquiry vs. $41.50 per inquiry, inbound leads are about 40% cheaper than outbound leads. However, when measured on a "per new customer" basis (which is the most important number), outbound leads in this example actually cost about 3% less than inbound leads.
Please understand, I'm not arguing that outbound marketing is "better" than inbound marketing. The conversion rates for outbound leads used in my example are for illustration purposes only. Your conversion rates for both inbound and outbound leads will almost certainly differ from those used in my table. In addition, research by SiriusDecisions has indicated that inbound leads cost less and have higher conversion rates, on average, than outbound leads.
The important point here is that you can't evaluate the value of inbound vs. outbound marketing for your business until you measure your lead acquisition costs at the customer level.

Sunday, December 7, 2014

Why a Little Uncertainty Makes Marketing Content More Persuasive

Developing content that will create meaningful engagement with potential buyers is a perennial challenge for most marketers. In all five of the annual content marketing surveys by the Content Marketing Institute and MarketingProfs, respondents said that producing engaging content was one of their top three challenges.

Thanks to numerous research studies, we now know that most B2B buyers are turned off by content that is overly promotional. For example, in a recent survey by The Economist Group, business executives were asked to identify the main reason that a content resource does not make a positive impression. Seventy-one percent of the respondents said content that "seemed more like a sales pitch."

Creating content that does not "seem like a sales pitch" is unfamiliar territory for many marketers because the use of promotional content is deeply ingrained in the culture of marketing. For decades, marketers have been trained to use forceful, unequivocal, and/or dramatic language and images in order to make their content as persuasive as possible. A significant body of "persuasion research" supports the general principle that strong, forceful content is more persuasive that weak or tepid content.

In reality, however, forceful and unequivocal content is not always the most engaging and persuasive content. Research by Zakary Tormala, an associate professor of marketing at the Stanford Graduate School of Business, and Uma Karmarkar, now an assistant professor of business administration at the Harvard Business School, has demonstrated that a small dose of uncertainty can actually make marketing content more engaging.

Tormala and Karmarkar conducted multiple experiments that tested the impact of three elements of a persuasive message - the strength of the arguments used in the message, the perceived expertise of the message source or provider, and the certainty with which recommendations in the message are expressed. One surprising finding of these experiments was that "experts" are more persuasive when they qualify their arguments or otherwise express some uncertainty about their opinions.

Professor Tormala says that incongruity between the source's perceived expertise and level of certainty makes a message more intriguing. He says, "Whether it's a person without established expertise in a given domain expressing very high certainty or a person with clearly established expertise in a domain expressing low certainty, the inconsistency is surprising. It draws people in. And as long as the arguments in the message are reasonably strong, being drawn in leads to more persuasion."

This research has important implications for B2B marketers. Most importantly, it means that your content will be more effective at creating engagement with potential buyers if it embodies a more reserved tone and minimizes the use of broad, absolute arguments and recommendations. This is particularly critical for content that's primarily designed for potential buyers who aren't familiar with your company. In this circumstance, understated content works better to create engagement because it's not what potential buyers expect from a vendor, and therefore it causes them to think about the arguments that your content makes.

The critical point is that marketing content must engage before it can persuade and that objective and balanced content if often more effective at creating engagement than content that makes unequivocal claims and recommendations.