Why B2B Buying Cycles Are So Long

(The following is a post I published about two years ago. Since then, the number of people in the average B2B buying group has increased, and buying cycles are getting longer. New research by the Aberdeen Group explains why long buying cycles are still a fact of life for B2B marketing and sales professionals.)

The Original Post

New research reveals what influences B2B buying decisions and explains why the B2B buying process is getting longer.

Earlier this month, Demand Gen Report published the findings of the 2017 B2B Buyer's Survey. The 2017 research was based on a survey of 283 C-level executives, VPs, and Directors across several B2B industries. Each respondent in this study was qualified to have been involved in a B2B purchase decision within the 12 months preceding the survey.

The 2017 survey findings reveal that B2B buyers' journeys are becoming longer and more complex. Fifty-eight percent of respondents said that the length of their purchase cycle had increased compared to a year earlier, while only 10% said that the length had decreased.

Other findings explain why the buying cycle has gotten longer.

• 52% of respondents said the number of buying group members 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."

The 2017 study also found that content continues to play a vital role in B2B buying decisions. When surveyed buyers were asked why they selected the winning vendor over others, 75% said that the winning vendor's content had a significant impact on their choice, and 89% said that the winning vendor "provided content that made it easier to show ROI and/or build a business case for the purchase."

The Demand Gen survey also asked participants to rate how important eleven factors became once they were at the point of evaluating a set list of possible vendors. The table below shows the percentage of respondents who rated each factor as very important.

Research regarding the attitudes and behaviors of business buyers can be extremely valuable to B2B marketing and sales professionals. However, it's always important to examine the details of any research study and ask how applicable the findings are to your business.

For example, the respondents to the Demand Gen survey represented a variety of industries and a mix of company sizes. However, more than half (53%) of the purchase decisions those respondents participated in involved computer software, and another 16% involved IT hardware. So, this study is particularly relevant for companies that sell software solutions and other technology products, but some of the specific findings may be less relevant if your company sells other types of products or services.

Update

Recent research by the Aberdeen Group (conducted in collaboration with PJA Advertising & Marketing) shows that business buyers are still struggling with buying decisions, and it provides several insights regarding how B2B marketing and sales professionals can help buyers navigate the process. This study was a survey of more than 340 B2B buyers. Sixty-six percent of the survey respondents were VP level or above, and 75% reported being "the decision maker" in B2B purchases.

Fifty-three percent of the respondents in the Aberdeen survey said they halt the purchase process or postpone the buying decision on at least half of their purchases. And it's easy to understand why. For one thing, many buyers simply don't know what they need. Fifty percent of the respondents said their needs are either partially, not well, or poorly defined when they are involved in a purchase.

Beyond poorly-defined needs, the two most common reasons for cancelling or postponing a purchase were:

• Buyers saw no differentiation between the prospective solutions (66% of respondents)
• Buyers decided that no vendor/solution met their needs (57%)

The Aberdeen study also found that most business buyers reach out to prospective vendors fairly early in the buying process. Forty-seven percent of the respondents said they speak with vendors "when we're beginning to research and explore our options," and 26% said they talk with vendors "when we're defining needs and requirements."

More importantly, 38% of the respondents said they are more willing to talk with vendors earlier than usual in the consideration process if the vendor can "provide me with objective information and help me frame my decision."

The good news is that B2B marketing and sales professionals can have an impact on the length of the buying cycle. Two-thirds (66%) of the buyers in the Aberdeen survey said that when a vendor shows them a new way to solve a problem, it shortens their buying process.

Top image courtesy of Dafne Cholet via Flickr CC.

Two Ways to Make Personalization Welcomed

In my last post, I discussed the inconsistent and often contradictory attitudes of consumers and business buyers regarding personalized marketing. On one hand, numerous research studies have confirmed that most consumers and business buyers want personalized offers, messages, and experiences, and are willing to provide personal information in order to receive such offers, messages, and experiences.

On the other hand, several studies have found that customers and potential buyers are growing more concerned about privacy, and aren't comfortable with how some companies are collecting, accumulating, and using their personal or business information. In one fairly large study, less than half of the respondents (48%) agreed that, "There are ethical ways in which a company can use my personal information.

These conflicting attitudes are creating a Catch-22 for marketers because it's now clear that personalization is a high-stakes game. Effective personalization drives broad and significant business benefits, but when marketers get personalization wrong, the consequences can be serious. In one survey, 38% of the respondents said they would stop doing business with a company that sends them "creepy" personalized messages.

So far, most marketing pundits and many marketing leaders seem to believe that the key to maximizing the benefits of personalized marketing is more personalization. In other words, collect and use more data about customers and prospects, make personalization more specific, and use personalization more frequently, in more channels, and for more types of communications and experiences. This explains why hyper-personalization and personalization at scale have recently become such popular buzzwords.

The "more personalization" approach is based on the idea that increased personalization will increase the relevance of messages and experiences, and that the improved relevance will make those messages and experiences more compelling, interesting, and/or satisfying for customers or potential buyers. The problem with the approach is that it doesn't address the privacy half of the personalization-privacy conundrum, nor does it provide specific guidance about what attributes (other than relevance) cause personalized marketing to be welcomed by potential buyers.

We need to use a different approach to deal with privacy concerns and maximize the benefits we obtain from personalization. Here are two related steps marketers can take to get the most from personalized marketing.

Base Personalization on "Informed Consent"

The key to alleviating privacy concerns is to base personalization on data that each customer or prospect has willingly and consciously provided for a clearly-stated purpose. This approach addresses three practices that frequently cause a customer or prospect to view personalized communications as presumptuous, invasive, or "creepy:"

• When a company bases personalization on data that the customer has not directly shared with the company (e.g. third-party data)
• When a company bases personalization on data that the customer or prospect has not consciously shared with the company (e.g location data from a smartphone, browsing history, etc.)
• When a company ostensibly collects information for one purpose and then uses the data for other purposes.

Customers and prospects won't see personalized marketing as intrusive or "creepy" when they willingly provide personal data in exchange for personalized content or experiences that are designed to serve a clearly understood purpose.

Make Personalization Pragmatically Useful

The most effective personalized marketing programs are those that deliver meaningful, pragmatic value to recipients. A recent study by Gartner/CEB provides strong confirmation of the importance of making personalization useful. The centerpiece of this study was a 2018 survey of more than 2,500 consumers in North America, Europe, and Asia-Pacific.

One objective of this study was to identify what type of personalization is most effective. So survey participants were asked several questions about the content of the personalized messages they received. Based on the survey responses, Gartner/CEB identified two basic types of personalization:

• "Prove You Know Me" Personalization - These types of messages mention the recipient's personal information, base personalization on information about the recipient's past purchases from the company, or generally reflect the recipient's interests in some way.
• "Help Me" Personalization - According to Gartner/CEB, these types of messages can make it easier for the recipient to complete a purchase, help the recipient understand how to better use a product, or otherwise help the recipient solve a problem or address a need.

To measure the relative effectiveness of these types of personalization, Gartner/CEB created a "Commercial Benefit Index" that considered four consumer intent or behavior factors - brand intent, purchase, repurchase, and increase in shopping cart size. When Gartner/CEB analyzed the change in the Commercial Benefit Index produced by each type of personalization, they found that "Help Me" personalization produced a 16% increase in the CBI, while "Prove You Know Me" personalization resulted in a 4% decline in the CBI.

The Takeaway

The important point here is that marketers should organize their personalization efforts around specific "programs" that are designed to serve a clearly-defined purpose and provide pragmatic value. When customers or prospects proactively choose to participate in a program by providing relevant personal information, the personalization-privacy conundrum disappears, the personalization will be welcomed, and it will be more compelling and impactful.

Top image courtesy of Richard Patterson via Flickr CC.

The Growing Personalization Conundrum for Marketers

For more than two decades, the value of personalization has been largely unquestioned in marketing circles. Most marketing leaders now view personalization as essential to marketing success, and providing personalized marketing messages and customer experiences has become a top priority in many companies.

Several recent research studies have confirmed that marketers strongly believe personalization drives improved marketing performance, and that most are committed to making personalization a core component of their marketing efforts. For example:

• In the 2019 Trends in Personalization survey by Researchscape International and Evergage, 70% of surveyed marketers said personalization has a strong or extremely strong impact on advancing customer relationships, and more than half of the respondents said personalization produces increased conversion rates, increased visitor engagement, improved customer experience, and increased lead generation/customer acquisition.
• In the 2018 State of Marketing research by Salesforce, more than eight out of ten surveyed marketers said personalization delivers major or moderate improvements in brand building, lead generation, customer retention, customer acquisition, and customer advocacy.
• In the 2019 Digital Trends research by Econsultancy and Adobe, targeting and personalization was the second most frequently identified priority for 2019 among survey respondents from larger enterprises.

There are also several studies showing that consumers want (and increasingly expect) personalized experiences.

• In a 2018 survey of 8,000 consumers by Accenture Interactive, 91% of respondents said they are more likely to shop with brands that provide them relevant offers and recommendations.
• In a 2018 survey of more than 6,700 consumers and business buyers by Salesforce, 76% of all respondents said they expect companies to understand their needs, and 72% of the business buyers said they expect vendors to personalize engagement based on their needs.

Given these research findings, it shouldn't be surprising that many marketing pundits are now advocating the use of "hyper-personalization," which generally refers to the use of real-time data and artificial intelligence to deliver more relevant content to each recipient.

So the correct strategy for marketers is to personalize everything they can, whenever they can, as much as they can, right? Well, not so fast!

Why More Personalization Isn't Always Better

There is a growing body of evidence indicating that consumers and business buyers are increasingly concerned about privacy and do not always welcome personalized marketing. For example, in a 2018 survey of nearly 6,400 individuals in France, Germany, the U.K., and the U.S. by data security firm RSA, less than half of the respondents (48%) agreed that, "There are ethical ways in which a company can use my personal information."

When survey participants were asked about specific types of personalization, the results were even more stark, as the following table shows:

Note that more than half of the respondents in this survey believe all four of these personalization practices are unethical, not just annoying or ineffective.

Other research has confirmed that people will react strongly when they perceive personalization goes too far. In the 2018 Consumer Personalization Panel research by Gartner/CEB, survey participants were asked how they would react if a company sent them irrelevant or annoying emails. Forty-eight percent of the respondents said they would unsubscribe, and 12% said they would stop doing business with the company.

But when they were asked how they would respond if a company sent them personalized messages that were "creepy," 57% of the respondents said they would unsubscribe, and 38% said they would stop doing business with the company.

When all of the recent research is considered, it's clear that marketers are facing a Catch-22 when it comes to personalization. On one hand, most customers and potential buyers say they want personalized offers, messages, and experiences, and large majorities also say they are willing to provide personal data in order to receive such offers, messages, and experiences.

At the same time, however, most customers and potential buyers are growing more concerned about privacy, and they aren't comfortable with how companies are collecting, accumulating, and using their personal or business information.

So, how can marketers deal with buyers' inconsistent and contradictory attitudes toward personalization? How can marketers balance the benefits produced by effective personalization against the risks of creating personalized messages or experiences that buyers will perceive as intrusive, presumptuous, or otherwise "creepy?" In my next post, I'll provide a few suggestions for dealing with this growing conundrum.

Top image courtesy of Anders Sandberg via Flickr CC.

Marketing Myopia Revisited

(The following is a post I published more than six years ago. Given the recent focus on marketing's responsibility for managing customer experiences and driving growth, the topic is as relevant and timely today as it was in the fall of 2012.)

The Original Post

In 1960, Theodore Levitt wrote a landmark article for the Harvard Business Review titled "Marketing Myopia." When it was republished in 2004, HBR editors said the article "introduced the most influential marketing idea of the past half century."

Levitt's central argument was that companies will cease to grow if they define their business too narrowly - in terms of specific products or services, rather than in terms of customer needs. In a quintessential passage from the article, Levitt explained the decline of railroads in terms that have become part of the business lexicon:

"The railroads did not stop growing because the need for passenger and freight transportation declined. That grew. The railroads are in trouble today not because that need was filled by others (cars, trucks, airplanes, and even telephones), but because it was not filled by the railroads themselves. They let others take customers away from them because they assumed themselves to be in the railroad business rather than in the transportation business."

The "disease" that Levitt wrote about is still with us, but now, some marketers are also afflicted with another kind of myopia. This new strain of marketing myopia is characterized by an almost exclusive focus on marketing communications and the technologies that support them. As practiced in many companies today, marketing means marketing communications and not much more.

Marketing communications are certainly important, but marketing also has other responsibilities that are essential for business success.

For more than four decades, the term marketing mix has been used to describe the operational aspects of the marketing function. The term became popular in the 1960's after Neil H. Borden published an article in the Journal of Advertising Research titled "The Concept of the Marketing Mix." Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotion, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that we know today as the 4P's of marketing - product, price, place, and promotion.

The point of this brief history lesson is that marketing has long had a mandate that is broader than marketing communications (promotion). Companies can suffer when marketing ignores these broader responsibilities because, of all the major business functions, marketing is (or should be) the best suited to relate a company to its external competitive environment.

So, if you're a marketer, give these ideas some thought:

• Marketing is about communicating your company's value proposition, but it must also be about determining what those value propositions will be.
• Marketing is about communicating the important features and attributes of your company's products or services, but it must also be about determining what features and attributes your products/services need in order to be attractive to buyers.
• Marketing is about communicating your company's price-value equation, but it must also be about determining what your company's pricing strategy will be.

Marketing communications will always be a critical part of the marketing function. But marketers need to keep the other aspects of marketing in mind in order to avoid a bad case of marketing myopia.

A Brief Update

Since my original post was published in 2012, numerous research studies have reported that many marketing leaders believe they are (or soon will be) primarily responsible for managing end-to-end customer experiences. Recent studies have also shown that a growing number of marketing leaders now believe they are primarily responsible for driving business growth, and that other senior executives largely agree with that view.

It seems clear, therefore, that marketing leaders recognize that the scope of marketing's responsibilities needs to expand. It's also clear, however, that this particular transformation in marketing is still a work in progress. For example, in the February 2019 edition of The CMO Survey, only 42.4% of respondents said that marketing is leading customer experience efforts in their organization, and only 43.4% reported that marketing is leading revenue growth efforts.

Earlier this year, I published a series of posts discussing the growth challenge facing marketers, and exploring what marketers need to do to effectively drive growth. You can read more about this vital topic here:

• Have Marketers Fully Embraced the Growth Challenge?
• Both Market and Customer Expertise are Needed to Drive Growth
• Focus on "High-Yield Behaviors" to Drive Revenue Growth

Marketing myopia may be less prevalent today than it was six years ago. The big challenge now is to translate the improved "vision" into tangible actions.

Image courtesy of Rob via Flickr CC.