Sunday, July 29, 2018

Original Research Powers Compelling Thought Leadership

It's now clear that thought leadership content is having a major impact on B2B buying decisions. Several recent studies have confirmed that business buyers are consuming more thought leadership content, and that thought leadership affects decisions at every stage of the buying process. However, many of the same studies have also found that business buyers are becoming more selective about the thought leadership content they consume.

The reality is, thought leadership is a classic double-edged sword. Great thought leadership makes a significant positive impact on potential buyers, but poor thought leadership can have a major negative impact on a company's demand generation performance. In a recent survey by Edelman and LinkedIn, over a third of C-level respondents (35%) said that a company's poor thought leadership content had directly led them not to do business with the company.

Thought leadership marketing is challenging because buyers have high standards for thought leadership content. In a survey by The Economist Group, business executives were asked why they consume thought leadership content. The top reason chosen was to encounter thoughts that go beyond current thinking. When the executives were asked what qualities make thought leadership compelling, the most popular attributes identified were innovative, big picture, transformative, and credible.

In a recent survey by Grist, senior executives were asked what qualities were most valuable in thought leadership content. The three most favored attributes identified by survey respondents were fresh thinking, forward-thinking, and evidence-led.

These high buyer standards mean that effective thought leadership content must provide buyers with information and insights that they cannot get from other sources. But developing such content on a consistent basis is challenging for most companies.

One of the most potent and reliable sources for compelling thought leadership content is original research, and a new study by Buzzsumo and Mantis Research indicates that original research is becoming an integral part of the marketing mix at many B2B companies.

This study consisted of a global survey that produced 698 responses from marketers. More than half of the respondents (53%) were affiliated with B2B companies, and another 26% worked for hybrid B2B/B2C companies. The focus of this survey was to understand how companies are developing and using original research in their marketing efforts.

In this study, nearly half of the respondents (47%) said their marketing team had created and published original research in the previous twelve months. The study also found that B2B marketers were significantly more likely to have used original research than B2C marketers (50% vs. 35%).

Most of the respondents who had used original research were satisfied with the results. Over half (56%) said their research had met or exceeded most or all of their expectations. Given this level of satisfaction, it's not surprising that nine out of ten of the respondents who are using research plan to conduct additional research in the coming twelve months.

The Buzzsumo/Mantis Research study also suggests that the use of original research is poised to increase. Half of the survey respondents who are not currently using original research said they are considering adding original research to their marketing efforts in the coming twelve months.

Finally, large majorities of the survey respondents in this study indicated that original research provides important support for their content marketing programs. Seventy percent of the respondents said that original research produces more content/editorial ideas, and 67% said it produces higher quality content/editorial ideas.

When reviewing any survey, it's important to consider how the demographics of the respondents may affect the survey results. In the Buzzsumo/Mantis Research survey, nearly two-thirds of the respondents (65%) worked for advertising or marketing agencies, technology companies, and professional services/consulting firms.

In my experience, these types of organizations tend to be relatively heavy users of original research. Therefore, this survey may somewhat overstate the use of original research in the overall population of companies. That being said, there's no doubt that original research is becoming increasingly important as source material for compelling thought leadership content.

Image courtesy of Thomas Haynie ( via Flickr CC.

Sunday, July 22, 2018

What Abraham Maslow Can Teach Us About Customer Experience

In 1943, the psychiatrist Abraham Maslow introduced a theory of human motivation which proposed that people are motivated to satisfy several needs, and that some of those needs take precedence over others.

Maslow argued that human needs are arranged in a hierarchy, with basic physiological needs (food, water, etc.) at the lowest level, and self-actualization at the highest. The hierarchy of needs is usually depicted as a pyramid like the one shown above. Maslow contended that people must satisfy lower level needs before they will be motivated to satisfy the needs on the next higher level of the hierarchy.

Maslow's hierarchy of needs has been widely used in the social sciences and in business to conceptualize important principles, and a version of the hierarchy can provide an effective framework for describing and organizing the building blocks of B2B customer experience.

The following diagram depicts the six factors that collectively define an exceptional experience for B2B customers. Each element in the diagram is a type of need, or an outcome, or a condition that most B2B customers want to satisfy, achieve, or experience in their relationship with a vendor.

These factors or elements of customer experience are fairly self-explanatory, but here's a brief description of each.

Functional quality/performance - The vendor's products or services provide the expected level of functional benefits and exhibit a high level of reliability.

Economic impact - The vendor's solution was (or can be) purchased at a reasonable price. The solution has an acceptable total cost of ownership and delivers an acceptable return on investment.

Ease of doing business - This element encompasses the functional aspects of the customer-vendor relationship. It includes attributes such as convenience and vendor responsiveness.

Trustworthiness - Information provided by the vendor is accurate and reliable, and the vendor consistently keeps its promises and fulfills its commitments. In addition, the vendor consistently puts the customer's interests ahead of (or on par with) its own.

Strategic insight - The vendor regularly provides insights that help the customer address major strategic challenges, sharpen its competitive differentiation, and/or identify new growth opportunities.

Personal value - Personal value refers to the benefits that are experienced by the individuals who are/were involved in the initial purchase of the vendor's solution and those who will make or influence the decision to continue the relationship with the vendor. Some of the most important personal value benefits are enhanced self-esteem and professional reputation.

As the diagram indicates, these customer experience needs are arranged in a hierarchy, but as with Maslow's model, the hierarchy is not based on the absolute importance of the needs. Instead, the hierarchy describes the sequence in which customers focus on and prioritize each type of need. As a general rule, customers will focus first on the needs at the bottom of the hierarchy. Once those lower level needs have been met, their attention will shift to the need in the next higher level of the hierarchy.

The hierarchy reflects the natural and common-sense way that most customers think about their experiences with a company, product, or service. For example, when customers first encounter a product or service, their attention will be on functional performance and economic impact. Once customers have determined that the product or service is providing an acceptable level of functional and economic performance, they will focus more on whether the vendor is easy to do business with.

It's important for marketing and customer experience leaders to understand that lower level customer experience needs don't disappear once they have been initially satisfied. They must continue to be satisfied, or they will again become customers' primary focus.

If, for example, a competitor significantly improves the functional performance of its product, customers may quickly decide that the performance of your product is no longer satisfactory. Therefore, it's critical to constantly monitor your performance against all of the customer experience needs in the hierarchy.

Top image courtesy of FireflySixtySeven via Wikipedia (CC BY-SA 4.0).

Sunday, July 15, 2018

How Customers Really Feel About Personalization

Over the past several weeks, I've published posts that reviewed the major findings of two recent research studies - one by Dynamic Yield, and one by Researchscape International - that focused on the current state of personalization in marketing. These studies were based on surveys of marketing professionals, so they captured the perspectives of individuals who are on the "selling side" of the personalization equation.

For obvious reasons, it's important for marketers to understand how customers and prospects view the use of personalization, and two other recent studies address this critical issue.

The Periscope By McKinsey Study

Periscope By McKinsey is a unit of McKinsey & Company that provides a suite of marketing and sales analytics software. Consumers Value Personalization - Up Your Game to not Miss the Opportunity was based on a survey of 2,500 consumers located in the United States, France, Germany, and the UK.

In all four of the markets included in the study, more than 50% of the survey respondents said they frequently receive personalized messages. However, the markets differed in terms of how much consumers like receiving personalized communications. Fifty percent of the U.S. respondents said they really or somewhat like receiving personalized messages. French, UK, and German respondents were less enthusiastic, with only 38%, 37%, and 29%, respectively, feeling somewhat or very favorable toward personalized messages.

Attitudes toward personalization also varied by gender and age. For example:
  • In the U.S. and Germany, men feel more positively than women about receiving personalized messages, but the opposite is true in France and the UK.
  • Overall, younger consumers feel more positively than older consumers about receiving personalized communications.
The Periscope By McKinsey study also revealed that companies have a long way to go to get personalization consistently right. Overall, about 40% of survey respondents said they only sometimes receive personalized messages that truly feel personal, relevant, and intriguing. In addition, the number of respondents who said that personalized messages rarely or never feel truly personal exceeded the number of respondents who said they usually or often do.

The Accenture Interactive Study

Accenture Interactive has also published the results of a recent study about how consumers view personalization. The 2018 Personalization Pulse Check study consisted of a survey of 8,000 consumers from North America and Europe.

The Accenture research confirmed the potential impact of personalized marketing. Nearly all of the surveyed consumers (91%) said they are more likely to shop with brands that recognize, remember, and provide them with relevant offers and recommendations. Moreover, about eight out of ten of the survey respondents (83%) said they are willing to share their data to enable personalized experiences, so long as companies are transparent about how they use the data and give consumers control over it.

One important concern about personalized marketing is that it can feel invasive or "creepy." The Accenture study found that this problem doesn't occur frequently. Seventy-three percent of the surveyed consumers said that a business had never communicated with them online in a way that felt invasive.

Survey participants were also clear about what triggers the "creepy" factor. Of the 27% of respondents who reported having a brand experience that felt invasive, about two-thirds (64%) said it was because the brand had information about them that they had not knowingly shared with the brand directly.

The study report explains why this triggers such a strong response from consumers:  "Brand and consumer relationships are no different than their real-life counterparts. When one party goes outside of the relationship for information, the level of trust is completely broken."

Finally, the Accenture study demonstrates that companies should be especially careful when using location data to personalize messages. When Accenture asked survey participants how creepy they found certain types of personalized marketing, 41% said it felt creepy when they received a text from a brand as they walked by a physical store, and 40% said it felt creepy when they got a mobile notification after walking by a store.

The Bottom Line

Taken together, these two studies make three important points about personalization. First, most consumers like and want personalized messages, and when it's done correctly, personalization is a power marketing tool. Second, creating messages and offers that feel truly personal and relevant to potential buyers is hard, and most companies have more work to do to get this right. And third, companies must be particularly careful not to violate buyer trust when using personalized marketing.

Illustration courtesy of Phil Wolff via Flickr CC.

Sunday, July 8, 2018

Where B2B Companies Stand With Marketing Measurement

Measuring marketing performance is both a top priority and a persistent challenge for most B2B marketers. That's the primary theme of Demand Gen Report's 2018 Marketing Measurement and Attribution Benchmark Survey. The 2018 survey produced responses from 283 marketing executives, most of whom were based in the United States. Respondents represented several industries and a wide range of company sizes (from less than $10 million to more than $1 billion in annual revenue).

Eighty-seven percent of the survey respondents said that marketing measurement is a growing priority for their company. However, more than half of the respondents (54%) said their ability to measure and analyze marketing performance "needs improvement" or is "poor/inadequate." Another 34% rated their measurement capabilities as just "average."

It also appears that progress on measurement capabilities has been slow since last year. The following table shows how respondents rated their measurement capabilities in the 2018 survey and in the 2017 edition of the study. As the table shows, the percentage of respondents rating their capabilities as excellent decreased from 13% to 7%, while the percentage rating their capabilities as poor/inadequate increased from 9% to 14%.

It's not hard to understand why measuring the financial performance of marketing continues to be a major challenge. In most companies, the two most important reasons to measure marketing performance are:

  1. To determine the economic value that marketing creates for the business; and
  2. To enable marketing leaders to optimize their mix of marketing programs and channels based on economic performance
Both of these objectives require the use of financial metrics, and this requirement has a big impact on measurement complexity. It's relatively easy to measure the performance of most digital marketing tactics and some offline tactics (e.g. direct mail) using non-financial metrics. But it's another matter to measure the financial performance of a marketing program.
The crux of the challenge is attribution, which is the process of assigning both revenues and costs to marketing activities. It's impossible to accurately measure the financial performance of a marketing program or channel unless you can accurately assign both economic benefits and costs to it. So the accuracy of your measurement system ultimately depends on the accuracy of your attribution method or model.
The Demand Gen Report survey provides strong evidence that attribution is a significant barrier to effective marketing performance measurement. Only about 30% of the survey respondents indicated they are doing any attribution analysis as part of their marketing measurement efforts. Among those using attribution, only about half (51%) said they are using some form of multi-touch attribution, while 14% said they use last touch attribution, and 12% said they use first touch attribution.
Research from other firms points to the same conclusion. In a 2017 survey by Econsultancy, in-house marketers were asked to identify the specific attribution methods they are using and rate the effectiveness of each method. The following table shows the percentage of respondents using each attribution method, and the percentage rating each method as very or somewhat effective.

These findings are troublesome because the three most widely used attribution methods (and four of the top five) are methods that attribute all of the revenue from a sale to only one marketing touch point. Even more troublesome, large majorities of the survey respondents rated these methods as very or somewhat effective, when the reality is that no "single touch" attribution method will produce an accurate picture of marketing performance.
Developing an accurate marketing attribution model is not simple or easy. The current "state of the art" is data-driven or algorithmic attribution modeling, but even these advanced solutions aren't perfect. The bottom line is that measuring the financial performance of marketing - particularly at the tactic, program, and channel level - is likely to remain challenging for the foreseeable future.
So how can B2B marketing leaders measure and demonstrate the value of marketing given the complex and imperfect nature of attribution? There are no silver-bullet solutions, but I'll offer a few suggestions in a future post. 

Top image courtesy of Pat Pilon via Flickr CC.

Sunday, July 1, 2018

Why Revenue Growth is Best Pursued Indirectly

Most marketers will say that the "prime directive" of marketing is to drive revenue growth. But in reality, revenue growth is a by-product of creating value for customers and providing great customer experiences. Paradoxically, the best way to grow revenue is by not making revenue growth the primary marketing objective.

In life and in business, some of our most important goals are best pursued indirectly. All of us want to be happy, but we can't achieve happiness by trying to be happy. Psychologists call this the paradox of hedonism or the pleasure paradox. The psychiatrist Victor Frankl described the pleasure paradox in the following way:  "Happiness cannot be pursued; it must ensue, and it only does so as the unintended side effect of one's personal dedication to a cause greater than oneself . . ."

Business success is obviously different from personal happiness, but variations of the pleasure paradox also exist in the business world. The British economist John Kay has called one of these variations the "profit-seeking paradox," which holds that the best way for a business to maximize profits is by not making profit its primary driving goal.

Although they never used the term, Jim Collins and Jerry Porras described the profit-seeing paradox in their best-selling book Built to Last. Collins and Porras compared the long-term financial performance of several pairs of companies in the same industry. In each pair, the core driving objectives of one of the companies (the "visionary" company) were mostly non-economic, while the other company was primarily profit driven. Collins and Porras found that the visionary companies were more profitable than the profit-driven companies. The authors wrote:

"Visionary companies pursue a cluster of objectives, of which making money is only one - and not necessarily the primary one. Yes, they seek profits, but they're equally guided by a core ideology - core values and sense of purpose beyond just making money. Yet paradoxically, the visionary companies make more money than the purely profit driven companies."

Another variation of the pleasure paradox - what I call the revenue growth paradox - is particularly applicable to marketing. The existence of the revenue growth paradox means that, like profit, revenue growth is best pursued indirectly, and that the most effective way to drive revenue growth is to not make it the primary direct objective of marketing efforts.

The revenue growth paradox exists because revenue growth is a by-product of doing other things well, the two most important of which are creating meaningful value for customers and providing great customer experiences. Therefore, the most effective way to grow revenue is to find ways to create more value for customers and improve customer experiences.

Marketing can and should be deeply involved in creating value for customers and delivering great customer experiences. When it comes to marketing communications programs, the key - especially for B2B marketers - is to consistently provide what Jay Baer calls "massively useful information." In addition, marketing - along with sales - should be well positioned to understand customer needs and challenges, and thus help identify opportunities for creating more customer value.

This doesn't mean that companies shouldn't have revenue growth targets. But it does mean that marketers and other business leaders must recognize that the key to achieving those objectives is to focus on the conditions that cause revenue growth to occur. Such an indirect approach may not feel comfortable to some marketers, but we have compelling evidence that it works.

For example, a 2018 study by Forrester Consulting found that companies with mature customer experience (CX) practices - what Forrester called experience-driven businesses, or EDBs - reported top-line revenue growth in 2017 of 15%, compared to an average of 11% for the other companies in the study. This research also found that the EDBs had 1.6x to 1.9x higher year-over-year growth in customer retention, repeat purchase rates, average order value, and customer lifetime value, compared to the companies with less robust CX practices.

In many ways, growing revenue is like growing corn or wheat or vegetables. Farmers don't directly "make" their crops grow. They till the soil, add fertilizer, and sow the seeds. They keep the field free of weeds and insects, and they may irrigate when needed. In other words, farmers focus on creating the conditions that are conducive for the growth of healthy crops. Then they allow nature to take its course.

Revenue growth occurs under the right conditions, and many of those conditions can be controlled, or at least influenced, by the actions of marketers and other business leaders. So the real key to driving revenue growth is to focus on creating those growth-inducing conditions.

Illustration courtesy of OTA Photos ( via Flickr CC.