Sunday, March 18, 2018

New Research Highlights Digital Trends for 2018

Econsultancy recently released its 2018 Digital Trends report (published in association with Adobe). This report is based on a global survey of nearly 13,000 marketing, creative, and technology professionals. Sixty percent of the respondents were from the client-side ("company marketers"), and 40% were affiliated with agencies, consulting firms, technology vendors, and other types of marketing services firms.

Econsultancy has been conducting the digital trends survey annually for eight years, and it's consistently one of the largest surveys regarding digital marketing trends that I see.

As part of the 2018 study, Econsultancy identified a group of successful organizations in order to compare the behaviors of these top-performing companies with their mainstream peers. Econsultancy defined top-performing companies as those that exceeded their top 2017 business goal by a significant margin and also significantly outperformed their competitors.

Customer Experience Remains the Prime Directive
The 2018 study revealed that customer experience remains at the top of the agenda for many marketers. When company marketers were asked to identify the single most exciting opportunity for their organization in 2018, the top three choices were:

  1. Optimizing the customer experience (19% of respondents)
  2. Data-driven marketing that focuses on the individual (16%)
  3. Creating compelling content for digital experiences (14%)
When you consider that both insights from data and compelling content are integral to delivering great customer experiences, it's fair to say that fully 49% of these survey respondents see optimizing the customer experience as their most significant opportunity for 2018.
Other findings from the research confirm the overarching importance of customer experience. The survey asked participants to rank seven areas in order of priority for their organization in 2018. Survey respondents ranked content and experience management as their top strategic priority for this year. Forty-five percent of respondents ranked content and experience management as one of their three most important priority areas, and 20% said it was their primary focus.

Other Significant Findings
The 2018 Digital Trends report addresses several other important topics. Here are some of the other significant findings:
  • Sixty percent of respondents said that digital permeates most or all of their marketing activities, and another 11% said they are a "digital-first organization."
  • Most respondents said their organization will invest in digital skills and education in 2018, but top-performing companies are twice as likely to be investing significantly in those areas, compared to their mainstream peers (45% vs. 23%).
  • The largest group of respondents (43%) said their marketing technology stack is "fragmented" with "inconsistent integration between technologies." However, top-performing companies are almost three times as likely as their mainstream peers to have a highly integrated, cloud-based marketing/customer experience technology stack.
Survey Demographics
It's important to make a couple of points about the demographics of the participants in the Econsultancy study. First, this study was somewhat European centric. Forty-four percent of the survey respondents were based in Europe. The next three largest geographies represented were Asia (21%), North America (16%), and Australia/New Zealand (12%). 
Second, this study did not focus exclusively on B2B companies. However, 31% of the company marketers were affiliated with B2B enterprises, and another 36% were with hybrid B2B and B2C organizations.
If you're involved in B2B marketing, the 2018 Digital Trends report is well worth your time.

Illustration courtesy of Jamie Spencer via Flickr CC.

Sunday, March 11, 2018

How to Show Buyers That Inaction Has a Price

It will come as no surprise to B2B marketing and sales professionals that sales cycles are getting longer. In the 2017 B2B Buyer's Survey by Demand Gen Report, 58% of the respondents said the length of their purchase cycle had increased compared to a year earlier, while only 10% said the length had decreased.

Other findings from the survey explain why the buying cycle has gotten longer:

  • 52% of respondents said the number of people in buying groups had increased significantly.
  • 77% agreed that they conduct a more detailed ROI analysis before making a purchase decision.
  • 78% agreed that they "spend more time researching purchases."
  • 75% agreed that they "use more sources to research and evaluate purchases."
I don't doubt that these factors are playing a role in lengthening purchase cycles, but I also contend that other factors are contributing to longer buying cycles, stalled deals, and the dreaded "no decision."
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 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. And if the financial ramifications of a problem aren't visible, buyers won't be likely to see the problem as urgent.
In addition, psychologists have found that we humans have a natural desire to avoid or delay making difficult of complicated decisions. These factors explain 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 potential buyers that the problem your product or service will solve is worth their time and attention. In essence, you must help your potential buyers answer two questions:  Why is it important for me to address this problem, and why should I deal with it now?
One of the most effective ways to demonstrate the importance and urgency of a problem is to make the cost of inaction visible to your potential buyers. That's why I include a cost of delay calculation in every ROI model I develop. Most ROI estimates 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 potential buyers. 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 for a particular prospect, you've determined that your solution will produce total financial benefits (cost savings, cost avoidance, etc.) of $115,000 during the first twelve months after the solution is implemented. 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 = ($115,000 / 13) - ($75,000 / 12)
Monthly CoD = $8,846.15 - $6,250.00
Monthly CoD - $2,596.15
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 potential buyers won't cure all of your sales cycle problems, but it can help create a necessary sense of urgency.
Top image courtesy of Predi via Flickr CC.

Sunday, March 4, 2018

Six Questions You Must Answer to Create Compelling Value Propositions

Customer value propositions are an essential part of a company's business strategy and the foundation for all of its marketing and sales efforts. Unfortunately, many companies don't devote enough time and energy to defining their customer value propositions, and as a result, their marketing and sales efforts aren't as productive as they could be.

It's difficult to overstate the importance of compelling value propositions. In Playing to Win:  How Strategy Really Works, A.G. Lafley and Roger L. Martin argue that a business strategy is essentially the answers to five interrelated questions, the two most important of which are:

  1. Where will you play?
  2. How will you win?
Lafley and Martin write, "These two choices, which are tightly bound up with one another, form the very heart of strategy and are the two most critical questions in strategy formulation."
Customer value propositions are the answers to the "how to win" question. As Lafley and Martin put it, "To determine how to win, an organization must decide what will enable it to create unique value and sustainably deliver that value to customers in a way that is distinct from the firm's competitors."
What Makes Customer Value Propositions Weak?
Despite their undeniable importance, many companies don't do a good job of identifying their customer value propositions or developing content resources and sales messaging that articulate those value propositions in a compelling way.

A few years ago, CEB conducted a survey of decision makers in B2B companies and found that only 57% of the "unique benefits" touted by sellers were seen by potential buyers as having enough impact to create a preference for a particular seller.
Over the past 25 years, I've reviewed hundreds of the value propositions used by clients, and what I've consistently found is that weak value propositions fall into three main categories:
  1. They are too generic. They don't speak to how value is created for specific types of companies or buyers.
  2. They focus on product or service features rather than on the tangible results a customer obtains by using a product or service.
  3. The don't include credible supporting evidence.
Not surprisingly, strong B2B value propositions exhibit the opposite characteristics. They describe specific elements of value for specific types of companies and buyers, they focus on business/economic results or outcomes, and they include credible evidence to support their value claims.
How to Develop Compelling Customer Value Propositions
Defining strong customer value propositions comes down to answering six fundamental questions about each major type or category of product or service that you offer:
  1. What are all of the significant reasons that people have for purchasing a product or service like mine? What problems or needs motivate the buying decision?
  2. What kinds of companies are likely to have the problems or needs that underlie these reasons to buy?
  3. Who within the prospect organization is affected by each problem or need? Who has the most to gain if the problem is solved and the most to lose if it isn't?
  4. What specific outcomes are these people seeking?
  5. What features of my solution will produce these desired outcomes?
  6. What will the business/economic benefits be if these desired outcomes are achieved?
Using these six questions to define your customer value propositions will provide the essential foundation for developing effective marketing and sales content and messaging.
Image courtesy of GotCredit via Flickr CC.