Why Marketers Shouldn't Go All In on In-Market Buyers

Some providers of B2B predictive analytics solutions are describing the benefits of their technologies in rather effusive ways. Consider, for example, the following language in a content resource from a leading PA vendor:

"Imagine a world where you can find buyers early in the sales cycle and predict who your next customer will be with 85% accuracy. [XXX's] predictive intelligence engine gives you the ability to see your entire universe of potential buyers at every stage of their buying journey. We uncover net-new, in-market prospects based on powerful data science and billions of time-sensitive intent interactions."

This is heady stuff because the ability to know which prospects are engaged in an active buying process could enable fundamental changes in the practice of B2B marketing. For example, suppose that your company uses account-based marketing. With predictive analytics, you could select ABM target accounts based on both fit (how closely a prospect resembles your best existing customers) and interest (whether a prospect is "in-market"). You could also use your PA solution to frequently update your list of target accounts, so that you have a near real-time view of which accounts are engaged in an active buying process.

This sounds like marketing nirvana, right? When you know which of your prospects are actively in-market, you can focus your marketing programs on this "low-hanging fruit," which should result in higher conversion rates, greater marketing efficiency, and lower customer acquisition costs.

There Be Dragons Here

Focusing marketing efforts on in-market prospects has undeniable benefits, but this strategy also carries some less obvious hazards. If taken to the extreme, it can lead marketers to ignore prospects who don't make the "in-market" cut. This is a dangerous approach because of changes in how business decision makers consume information.

A B2B buying process usually begins when a company's leaders or managers recognize a need or a problem, and decide to do something about it. These "buyers" then gather information about the need or problem, evaluate possible solutions, and may or may not decide to buy a product or service to address the problem or need.

So, our traditional view of buyer behavior is that most information gathering and learning occurs after an intentional buying process is underway. Today, however, information is so readily available that many business leaders and managers routinely consume information about business issues long before they've formed anything close to "buying intent." I've used the term casual learning to describe learning and information-gathering activities that occur before an intentional buying process has started, and it's clear that this type of "low-intensity" learning is becoming more and more prevalent.

What marketers need to remember is that casual learners will form impressions and embryonic preferences based on the content they consume, and that those impressions and preferences will remain influential when they get involved in an actual buying process. Therefore, marketing to casual learners is important, even though most casual learners probably shouldn't be characterized as "in-market."

As predictive analytics solutions get better and better at identifying companies that are in an active buying process, it will be very tempting for marketers to focus more and more of their marketing efforts on active buyers. That's not a bad strategy, so long as you remember that you must continue marketing to prospects who aren't currently "in-market."

There's nothing wrong with harvesting the low-hanging fruit, so long as you continue to tend the immature fruit that's higher on the tree.

Illustration courtesy of Andreas Fischler via Flickr CC.

The Unfinished Business of Marketing-Sales Alignment

A little over six years ago, I published a blog post that discussed the need for a more collaborative relationship between marketing and sales. Since 2010, I've written about various aspects of marketing-sales alignment 22 times.

I certainly wasn't the first person to discuss the disconnect that frequently exists between marketing and sales or the need for better marketing-sales alignment. For example, the July-August 2006 issue of the Harvard Business Review contained an article by Philip Kotler, Neil Rackham, and Suj Krishnasvamy titled "Ending the War Between Sales and Marketing."

For at least the past decade, both B2B marketing and sales professionals have recognized the importance of forging a closer relationship between marketing and sales. Over the past ten years, many B2B companies have made marketing-sales alignment an important business priority, and some companies have made significant progress in improving the quality of this critical relationship.

Despite the gains, however, two research studies from earlier this year clearly show that marketing-sales alignment is still a work-in-progress for many companies.

The CallidusCloud Research

The 2016 Sales and Marketing Sentiment Study by CallidusCloud was based on a survey of B2B marketing and sales professionals that produced 227 responses. The responses were nearly evenly split between marketers and sales pros. Sixty-two percent of the respondents were based in North America, and 22.7% were based in Europe.

Over two-thirds of the respondents (67.1%) said their company's sales and marketing teams are fully or somewhat aligned. In the 2015 edition of this survey, 71.9% of respondents reported full or partial alignment.

This research also found that both marketers and sales pros are less satisfied with their counterpart's performance in 2016 than they were in 2015. CallidusCloud asked survey participants this question:  "How satisfied are you in the performance of marketing (if you're in sales) or of sales (if you're in marketing)?" In 2016, 26.7% of all respondents said very satisfied or satisfied, down from 38.7% of respondents in 2015.

The CallidusCloud research pointed to several factors that may be making alignment more difficult to achieve. For example:

• Only 29.8% of respondents said that lead data is fully shared between sales and marketing.
• 41.9% of respondents said their company uses separate technology solutions to manage marketing and sales. Only 28.3% said their company uses a single integrated technology solution.

The Marketing Advisory Network Research

The 2016 B2B Sales & Marketing Collaboration Study by The Marketing Advisory Network was based on a survey of business, marketing, and sales professionals that produced 123 responses. More than 95% of the respondents were with B2B or hybrid B2B/B2C companies. This study also found several areas of "misalignment" between marketing and sales. For example:

• 50% of sales respondents (but less than 20% of marketing respondents) said that sales follows up with 95% or more of the leads supplied by marketing.
• Over 50% of sales respondents (but less than 20% of marketing respondents) said that sales reps regularly use virtually all of the sales assets and tools that their company makes available.

Conclusion

One reason that many companies are still struggling with marketing-sales alignment is that the two functions are still managed separately. I've long argued that optimizing demand generation in today's business environment requires the integration of marketing and sales for operational management and planning purposes. For an in-depth discussion of why such integration is needed, take a look at my earlier post titled Why Marketing-Sales "Alignment" Is No Longer Enough.

Image courtesy of Steven Guzzardi via Flickr CC.

Why Successful Marketing Is All About "Give to Get"

Earlier this year, The Economist Group and Hill+Knowlton Strategies published a report regarding the development, use, and effectiveness of thought leadership content. The report was based on a 2016 survey of 1,644 global marketers and business executives.

The survey found that most business executives consume thought leadership content at least weekly, and 63% of surveyed executives said they have increased their content consumption over the past 12 months. But the survey also found that, on average, executives only engage with about 25% of the thought leadership content they see every day.

The Economist Group attributed this low level of engagement to several factors.

• The pressure on marketers to produce a "continuous stream" of content makes it more difficult to create the kind of content that executives really value - content that is innovative, credible, and transformative.
• The proliferation of content has caused business executives to become more selective about the content they consume.

The report also argues that internal disconnects make it harder for marketers to develop effective thought leadership content. For example, most marketers (82% in the survey) recognize that to create compelling thought leadership, content needs to center on the interest and needs of the audience. Yet, when marketers were asked to identify their three more important objectives for creating thought leadership content, four of the five most popular objectives focused on benefits to the brand, rather than benefits to the audience, as the following table shows:

This dichotomy permeates most aspects of marketing, not just content marketing. Senior business leaders are demanding that marketers demonstrate the value of marketing to the business, and marketers are responding by linking their activities to important business outcomes - things like revenue and market share growth. But the reality is, these business outcomes are not directly caused by marketing activities and programs. Instead, they result from how customers and potential customers respond to our marketing efforts.

This means that our ability to achieve our marketing goals depends on whether we are successful at winning the right responses from our customers and prospects. So therefore, the key to marketing success is to make our marketing activities, programs, and content truly useful and valuable to our customers and prospects, and thereby earn the responses that drive our desired business outcomes.

Some thought leaders describe this approach as "putting your customers interests above your own," but I don't agree with this characterization. It's not about subordinating your company's interests to those of your customers and prospects. It's about recognizing that your business objectives are only achievable by making yourself useful and valuable to your customers and prospects.

This post may sound a bit like Marketing 101. I suspect that most readers will agree with what I've just written. But this principle is easy to accept conceptually, and hard to consistently apply in practice, especially when the pressure is on to produce results quickly.

There's nothing wrong with having business outcomes as strategic marketing objectives, but it's essential to remember that these goals are best pursued indirectly.

For another good discussion of this important topic, take a look at this recent article at CMO.com.

Why Marketers Must Beware of Bad "Research-Based" Conclusions

If you're a B2B marketer, you probably read survey reports on a fairly regular basis. They have become popular marketing tools for companies that provide marketing-related services and/or technologies. Survey reports can be valuable sources of information about marketing trends, practices, and technologies, but they can also mislead. Perhaps more accurately, survey results and reports can make it easy for us to draw inaccurate, or at least unjustified, conclusions.

A survey report published this past spring provides a good vehicle for illustrating my point. For reasons that will become obvious, I'll refer to this research as the "PA survey" and the "PA report." I'm using this report, not because it is particularly flawed, but because it resembles many of the research reports I review.

The PA report was prepared by a well-known research firm, and the primary focus of the PA survey was to show the impact of predictive analytics on the B2B demand generation process. The PA survey was sponsored by one of the leading providers of predictive analytics technology.

The PA survey asked participants to rate the effectiveness of their demand generation process as Effective, Neutral, or Ineffective. The PA report then provides data that shows the correlation between the use of predictive analytics and demand generation performance. The following table shows that data:

The PA report contains very strong statements regarding the impact of predictive analytics on demand generation performance. For example:  "Overall, less than one-third of study participants report having a B2B demand generation process that meets objectives well. However, when predictive analytics are applied, process performance soars, effectively meeting the objectives set for it over half of the time." (Emphasis in original)

The PA report doesn't explicitly state that predictive analytics was the sole cause or the primary cause of the improved demand generation performance, but it comes very close. The issue is:  Do the results of the PA survey support such a conclusion?

One of the fundamental principles of data analysis is that correlation does not imply causation. In other words, data may show that two events or conditions are statistically correlated, but this alone doesn't prove that one of the events or conditions caused the other. Many survey reports devote a great deal of space to describing correlations, but most fail to remind us that  correlation doesn't necessarily mean causation.

The following chart illustrates why this principle matters. The chart shows that from 2000 through 2009, there was a strong correlation (r = 0.992558) between the divorce rate in Maine and the per capita consumption of margarine in the United States. (Note:  To see this and other examples of hilarious correlations, take a look at the Spurious Correlations website by Tyler Vigen.)

I doubt that any of us would argue that there's a causal relationship between the rate of divorces in Maine and the consumption of margarine, despite the high correlation. These two "variables" just don't have a common-sense relationship.

But when there is a plausible, common-sense relationship between two events or conditions that are also highly correlated statistically, we humans have a strong tendency to infer that one event or condition caused the other. Unfortunately, this human tendency can lead us to see a cause-and-effect relationship in cases where none actually exists.

Many marketing-related surveys are narrowly focused, and this can also entice us to draw erroneous conclusions. The results of the PA survey do show that there was a correlation between the use of predictive analytics and the effectiveness of the demand generation process among the survey participants. But what other factors may have contributed to the demand generation effectiveness experienced by this group of survey respondents, and how important were those other factors compared to the use of predictive analytics?

For example, the PA report doesn't indicate whether survey participants were asked about the size of their demand generation budget, or the number of demand generation programs they run in a typical year, or the use of personalization in their demand generation efforts. If this data were available, we might well find that all of these factors are also correlated with demand generation performance.

There are a couple of important lessons here. First, whenever a survey report states or implies that improved marketing performance of some kind is correlated with the use of a particular marketing practice or technology, you should remind yourself that correlation doesn't indicate causation. And second, it's critical to remember that the performance of any major aspect of marketing is very likely to be caused by several factors, not just those addressed in any one survey report.

One final comment. Despite what I have written in this post, I actually believe that predictive analytics can improve B2B demand generation performance. What we don't have yet, however, is reliable and compelling evidence regarding how much improvement predictive analytics will produce, and what other practices or technologies may be needed to produce that improvement.

Top image courtesy of Paul Mison via Flickr CC.

B2B Marketers Embrace Interactive Content

Interactive content has become an integral part of the marketing efforts of many B2B companies, according to a 2016 survey conducted by the Content Marketing Institute and sponsored by ion interactive.

In this research, 53% of the survey respondents said their organization uses some interactive content in its marketing efforts. Not surprisingly, large enterprises - those with 1,000+ employees - are more likely to use interactive content than smaller firms, but the differences are not as large as many might think. Sixty-five percent of large enterprise respondents said they are using interactive content, but about half of the respondents from mid-size and small companies also reported the use of interactive content.

The CMI survey also indicates that the use of interactive content is growing. Seventy-five percent of respondents said they anticipate their use of interactive content will increase in 2016 compared to 2015. And about one-third (32%) of non-users said they are likely to begin using interactive content in the next 12 months.

For this survey, CMI defined interactive content as "content that engages participants in a two-way dialogue or exchange, often providing utility and usefulness . . ." Some of the more popular types of interactive content include assessments, calculators, contests, quizzes, and interactive infographics, e-books, and white papers.

Benefits of Interactive Content

The majority of interactive content users in the CMI survey said that it provides several significant benefits. The following table shows the percentage of user respondents who agreed or strongly agreed with six benefits statements:

The findings of the CMI research reinforce the results of earlier research by other firms. For example:

• In the 2016 Content Preferences Survey by DemandGen Report, when participants were asked about several possible changes in their B2B content consumption habits, 84% of the respondents agreed or strongly agreed with this statement:  "I prefer more interactive/visual content accessible on demand."
• A 2014 survey by Demand Metric found that interactive content outperforms static or passive content at three critical marketing functions - producing prospect conversions, educating the buyer, and creating differentiation from competitors.

Interactive Content Works . . . If It's Useful to Buyers

The evidence described above clearly shows that interactive content can be a powerful marketing tool. But B2B marketers should remember that interactive content will only produce above-average results if it is useful and valuable to potential buyers.

As more and more companies use interactive content, the "novelty factor" for buyers will begin to wane. So, the real key to success with interactive content is to use interactivity to make your content even more useful and valuable for your potential buyers.