Sunday, November 24, 2019

Why Your Marketing Content Should Be "Job Focused"

The first step to designing an effective marketing strategy and creating compelling marketing content is to understand what your potential customers are trying to accomplish when they purchase products or services like those you provide. In most cases, people don't buy a product or service because they want that product or service itself. More often, what they really want is what the product or service will help them accomplish.

Theodore Levitt, the legendary professor of marketing at the Harvard Business School, captured this idea in a memorable way when he often reminded his students that, "People don't want to buy a quarter-inch drill. They want a quarter-inch hole."

In The Innovator's Solution, Clayton Christensen and Michael Raynor built on Professor Levitt's idea to describe what is called the jobs-to-be-done framework. The basic idea of this framework is that when people become aware of a "job" they need to get done, they look for a product or service they can "hire" to perform the job.

Christensen and Raynor argue that this is how customers "experience life." Their thought processes begin with an awareness that they need to get something done, and then they seek to hire something or someone to to the job as effectively, conveniently, and inexpensively as possible.

What Milkshakes Can Teach Us About Marketing

Christensen and Raynor also provided a memorable example of hiring a product to get a job done. In their case study, a fast-food restaurant chain wanted to increase sales of milkshakes, and it commissioned market research to determine how to accomplish this goal. The most surprising finding of the research was that almost half of the milkshakes were purchased in the early morning. The milkshakes were usually the only item purchased, and they were rarely consumed at the restaurant.

Digging a little deeper, the researchers found that most of the morning milkshake customers were people on their way to work. Many of them faced a long commute, and they needed something to make the drive more interesting. Also, they were in a hurry, they were usually wearing their business clothes, and they only had one hand free.

These customers sometimes "hired" other foods to fill their morning needs, but most of the alternatives had significant disadvantages. Bagels left crumbs on their clothes, and breakfast sandwiches made their hands and the steering wheel greasy. It wasn't so much that these customers "liked" milkshakes more than bagels or breakfast sandwiches, but milkshakes were simply better than those alternatives at performing the job the customers needed to get done.

The Magic of Job-Focused Marketing

The jobs-to-be-done framework is often used to guide the process of developing new products or services, but it also has implications for marketing. What it tells us is that one key to effective marketing is to focus the majority of our marketing messages and content on the jobs our potential buyers need to get done.

To create compelling "job-focused" messages and content, marketers need to thoroughly understand the jobs their potential customers are trying to get done, including:

  • What the specific jobs are
  • Why the jobs are important
  • What happens if the jobs don't get done
  • How potential buyers are trying to perform the jobs - what tools and processes they are using
  • What is preventing them from getting the jobs done effectively and efficiently - the limitations and shortcomings of their existing tools and processes
As marketers, it's easy for us to forget that most potential buyers aren't really interested in our products or services per se. What they are (or can become) interested in is what those products or services can help them accomplish. Our products or services are simply the means to an end, and it's critical to keep this in mind when planning our marketing efforts. 
To use Professor Levitt's metaphor, our marketing strategy and our marketing content should be more about quarter-inch holes than quarter-inch drills.

Image courtesy of GotCredit ( via Flickr CC.

Sunday, November 17, 2019

Two Ways to Improve Your ROI Credibility

With the fourth quarter of 2019 well underway, many marketing leaders will have already started planning for 2020. In most cases, the planning process will include an analysis of how well marketing performed in 2019. and many marketing leaders will use return on investment (ROI) as the primary tool for conducting this assessment.

Over the past two-plus decades, ROI has become the "gold standard" for measuring marketing performance and for communicating the performance and value of marketing to senior company leaders. So you would think that, by now, marketing leaders would thoroughly understand what marketing ROI is, and how to calculate it correctly. Unfortunately, however, that is not always the case, as a recent survey conducted by LinkedIn Marketing Solutions makes clear.

The LinkedIn Research

The Long and Short of ROI report is based on a survey of 4,000 B2B and B2C marketing professionals from 19 countries. Survey respondents worked in a wide range of industry sectors, including technology, financial services, professional services, and manufacturing. The survey was conducted in June 2019.

Most of the results presented in the survey report refer to "digital marketers." Unfortunately, the report does not define who "digital marketers" are, nor does it indicate whether all of the survey respondents were "digital marketers." With that caveat in mind, here are the "headline" findings from the LinkedIn study:

  • 70% of digital marketers claim they are currently measuring ROI.
  • 77% of digital marketers measure ROI during the first month of a campaign, even though 55% of those marketers reported having a sales cycle that is at least three months long.
  • When most digital marketers say they are measuring ROI, they are actually measuring a variety of key performance indicators (KPIs), but not true ROI.
  • 63% of digital marketers don't have a high level of confidence in the "ROI" metrics they are currently using.
The LinkedIn survey report argues that marketers should (a) clearly distinguish between KPI-based metrics and ROI, and (b) measure ROI over the length of the sales cycle in order to obtain accurate results.
When You Say ROI . . .Mean ROI
The findings of the LinkedIn survey highlight two of the still all-too-prevalent ways that many marketers are misusing ROI. First, many marketers use "ROI" as a catch-all term to describe a wide variety of benefits produced by marketing activities. But return on investment is a specific financial metric that has a well-established meaning among management and financial professionals.
This means that none of the following constitutes ROI:
  • Increased brand awareness
  • Increased market share
  • Increased customer lifetime value
  • Increased average deal size
  • Improved conversion rates
  • Improved response rates
  • Improved NPS/customer satisfaction scores
For many companies, tracking some or all of these performance measures will be valuable, but they do not constitute marketing ROI. Calling any of these benefits "ROI" reflects a misunderstanding of what ROI is, and if a marketing leader presents one of these kinds of ROI calculations to a CEO or CFO, his or her credibility will be weakened.
Calculate ROI Correctly
The second way that many marketers misuse ROI is to calculate it incorrectly. The basic formula for marketing ROI (MROI) is:

MROI = (Gain from Marketing Investment - Cost of Marketing Investment) / Cost of Marketing Investment

So the basic MROI formula contains only three components:
  1. The financial gain from the marketing investment
  2. The cost of the marketing investment
  3. Time - Although the formula doesn't expressly contain a "time" value, MROI is always measured for a defined period of time.
While the basic MROI formula appears to be quite simple, that simplicity is deceptive. In reality, calculating MROI accurately can become a complex task because every component of the formula presents questions that require thoughtful answers and sound judgment calls.
I've addressed many of these issues in several previous posts, so I won't repeat that material here. However, I've provided links to my ROI-related posts below. If you're involved in calculating MROI, I encourage you to take a look at these posts and carefully consider the issues they discuss.

Image courtesy of Rick B via Flickr CC.

ROI-Related Articles

Sunday, November 10, 2019

A Fresh Look at Millennial B2B Buyers

The role of millennials in B2B buying decisions, and their distinctive attitudes and behaviors as business buyers have become major topics of interest for B2B marketing and sales professionals over the past five years. Since 2014, numerous research studies - including studies by the IBM Institute for Business Value, Google/Millward Brown Digital, Merit, and Heinz Marketing/SnapApp - have focused specifically on this subject.

A few days ago, Demand Gen Report published the results of new research - conducted in partnership with The Mx Group - that provides a current take on the roles, perspectives, and preferences of millennial business buyers. The B2B Millennial Buyer Survey Report is based on a survey of "close to" 200 millennials - people born between 1981 and 1996 - working for B2B companies.

The Demand Gen survey results provide numerous specific insights about the attitudes and behaviors of millennial B2B buyers, but I suggest there are three key takeaways from this research.

Millennials Take Charge

Many millennials have risen to leadership positions and are now exercising significant authority in B2B purchase decisions. Fifty-six percent of the respondents in the Demand Gen survey held director-level positions or above, and another 42% held managerial positions. Twenty-one percent of the respondents were vice presidents or held C-suite positions.

Forty-four percent of the survey respondents indicated they are a primary decision maker at their company for purchases valued at $10,000 or more. Another one-third of the respondents reported being a key influencer and/or recommender.

Other research has confirmed the growing responsibility and authority of millennial B2B buyers. For example, in a 2015 survey of 1,469 employed millennials by Merit, 73% of the respondents said they were involved in B2B buying decisions, and approximately one-third (34%) of the respondents reported being the sole decision maker for their department

A Preference for Peer/Colleague/User Content

The millennial buyers surveyed by Demand Gen expressed a strong preference for learning about products or services from peers, colleagues, and other users. When the survey participants were asked what types of content were most helpful in their buying decisions, the top choice was user reviews (61% of respondents), and case studies came in third (34% of respondents).

When the survey participants were asked what resources they usually depend on when researching business purchase decisions, the top choice was review sites (49% of respondents).

The desire to learn from peers also influences how millennial buyers use social media. When asked what role social media plays in their process for researching potential purchases, a majority of the survey respondents said they browse existing discussions to learn more about their topic of interest (63%) or ask for suggestions and recommendations from other users (55%).

On this issue, it's clear that millennial B2B buyers aren't significantly different from other business buyers. Recent research has shown that buyers of all generations are now relying more on information from peers, colleagues, users, and other independent third parties. For example, in a 2019 survey of 712 business technology buyers by TrustRadius, participants were asked to rate the trustworthiness of fifteen sources of information used in buying decisions. Four of the seven most trusted sources involved independent third parties (peers, friends, or colleagues, users, analysts, and communities or forums).

The Challenges Haven't Changed (Much)

The Demand Gen survey also revealed that millennial B2B buyers face many of the same challenges that all business buyers confront. More than half (52%) of the survey respondents said there are too many people involved in buying decisions at their company, and nearly half (49%) complained that their buying group is often indecisive and misaligned.

The next three most frequently identified challenges were:
  • Difficulty getting budget allocated (39% of respondents)
  • Lack of trust from senior management/not taken seriously (38%)
  • Difficulty proving clear potential of ROI (28%)
While a lack of senior management trust may be a slightly bigger challenge for younger buyers, it's likely that B2B buyers of all generations would say they're affected by the challenges identified in this survey.

Image courtesy of Jeff Djevdet ( via Flicker CC.

Related Articles

Sunday, November 3, 2019

Two Observations on the New CMI/MarketingProfs Content Marketing Survey

A few days ago, the Content Marketing Institute and MarketingProfs published the findings of their latest content marketing survey. The B2B Content Marketing 2020:  Benchmarks, Budgets, and Trends - North America report is based on 679 survey responses from content marketers and marketing executives with B2B companies in North America. All respondents were with companies that have been using content marketing for at least one year.

The annual CMI/MarketingProfs survey has become one of the most popular and widely-cited research studies in the content marketing world. The latest survey has already triggered several articles and blog posts, and I'm sure many more are now being written.

In many ways, the findings from the latest survey echo those in previous versions of the study. For example, they tell us that having a documented content marketing strategy is vital for success, and that top-performing content marketers prioritize the information needs of their audience over their company's promotional messages.

In this post, I'll focus on how some of the attributes of top-performing content marketers have changed since last year's survey, and I'll argue the latest survey shows that most small and mid-size companies should be outsourcing more of their content marketing activities.

Notable Changes in the Attributes of Top Performers

CMI and MarketingProfs provide survey data for both "most successful" and "least successful" content marketers. The survey defines "most successful" marketers as those respondents who characterized their company's content marketing effort as extremely successful or very successful at achieving the company's desired results. "Least successful" marketers are those respondents who described their content marketing program as minimally successful or not at all successful.

The survey report compares most successful to least successful content marketers across several attributes and practices, and as might be expected, there are substantial differences between the two groups. It's also useful to look at how the most successful marketers have evolved over the past year.

The following table depicts how the most successful marketers rated several attributes of their content marketing program in both the latest survey and in last year's survey:

This table shows that in the latest survey, higher percentages of the most successful content marketers reported that their organization's content marketing is sophisticated and/or mature, that they have a documented content marketing strategy, and that they have successfully used content marketing to build loyalty with customers, nurture subscribers, audiences, or leads, and generate revenue.

Somewhat surprisingly, the share of the most successful marketers who said they measure content marketing ROI fell by five percentage points. This could be interpreted as a step backward, but I don't believe that's wholly accurate. I would argue that the change is more likely due to the recognition by sophisticated content marketers that the primary focus of marketing measurement should not be on content marketing per se. Here's my view on this topic.

Small and Mid-Size Companies Underutilize Outsourcing

In this year's survey, half of all respondents said they outsource at least one content marketing activity. However, the use of outsourcing varies greatly depending on company size, as the following chart shows:

Only 37% of respondents from small companies (1-99 employees) said they outsource any content marketing activity, compared to 56% of respondents from mid-size companies (100-999 employees), and 71% of respondents from large companies (1,000+ employees).

These findings suggest that many small and mid-size companies are outsourcing less than they should to optimize their content marketing program. Other findings from the survey show that 44% of small company respondents have no employees working full time on content marketing, and another 29% have only one full time content marketer. More surprising, just over half (53%) of survey respondents from mid-size companies reported having no or only one full time employee dedicated to content marketing.

As the use of content marketing has continued to grow, the competition for buyer attention and mindshare has become more intense. One effect of this heightened competition is that a significant amount of high-quality content has become a prerequisite for content marketing success.

The survey data suggests that many small and mid-size companies aren't committing enough internal resources to create and sustain an effective content marketing program. Under these circumstances, outsourcing some aspects of content marketing - particularly content development - can be a smart and cost-effective way to close the gap.

Top image source:  Content Marketing Institute/MarketingProfs