Sunday, June 13, 2021

How Business Professionals Actually Consume Content

Over the past fifteen years, content marketing has become one of the most widely-used techniques in B2B marketing. Today, virtually all B2B companies are using content marketing in some form.

Ironically, the popularity of content marketing has made successful content marketing more difficult to achieve. As companies produce more and more content, the total volume of content available to potential buyers increases exponentially. And so does competition for buyer attention.

In these circumstances, understanding how business buyers actually consume content is critical to success. The 2021 State of B2B Content Consumption & Demand Report by NetLine Corporation provides several valuable insights on this vital issue.

NetLine operates a content syndication platform, and this report is based on data about millions of content downloads that occurred on the NetLine platform in 2020. This research is particularly valuable for two reasons:

  1. It captures the real-world content consumption behaviors of business professionals. The data used for the NetLine report was not derived from a survey or interviews, but from actual engagements with B2B content.
  2. The report is based on first party data. The business professionals who use the NetLine platform voluntarily share information about themselves and the organizations they work for in exchange for access to the content resources available on the NetLine's platform.
The NetLine study produced a wealth of information about content consumption behaviors, and I encourage you to review the full report. Here are a few of the report's highlights.
The COVID Effect
As might be expected, the COVID-19 pandemic affected content consumption behaviors is several significant ways. NetLine's analysis found that overall B2B content consumption increased more than 22% in 2020. In fact, the volume of content consumed between February 1st and September 30th of last year equaled 83% of the volume of content consumed in all of 2019.
COVID-19 also affected the topics that business professionals were interested in. The NetLine report states:  "The events of the past year led to a surge in content consumption related to remote work, collaboration software, IT bandwidth, security, and the ripple effects on HR and the like."
Most Popular Content Formats
The ten most popular content formats in 2020 were:
  1. eBooks
  2. Guides
  3. White papers
  4. Cheat sheets
  5. Tips and tricks
  6. Research reports
  7. Kits
  8. Webinars
  9. Magazines
  10. Subscriptions
Collectively, these ten content formats accounted for 82% of all downloads from the NetLine platform last year. The three most popular formats - eBooks, guides and white papers - accounted for more than 63% of the total downloads in 2020.
Webinars were the eighth most frequently requested type of content on the NetLine platform in 2020, but this ranking doesn't accurately reflect how important webinars and other virtual events became last year. The pandemic forced the cancellation of essentially all trade shows, conferences and other in-person B2B marketing events, and this drove a tremendous increase in the use of webinars and other virtual events.
The number of webinars uploaded to the NetLine platform increased 103% in 2020, and the number of registrations for webinars increased 49%. Registrations for live virtual events grew by a staggering 2,660%.
Measuring the Consumption Gap
One of the most useful insights provided by the NetLine report relates to the consumption gap, which NetLine defines as the time between the moment content is requested and the moment it's opened for consumption. This data point is important because it should be used to guide the timing of follow-up contacts with potential buyers. After all, it makes little sense to contact a potential buyer about a content resource before he or she has actually reviewed the resource.
In 2020, the average consumption gap across all job categories was 29.7 hours, up from 28.5 hours in 2019. The authors of the report attribute this increase at least in part to the distractions and disruptions caused by the pandemic.
More Data Points
The NetLine report provides numerous other data points, including what job categories most actively requested content in 2020. It also breaks down some data by industry vertical. As I indicated earlier, this analysis provides a wealth of valuable insights, and I recommend that you review the full report.

Image Source:  NetLine Corporation

Sunday, June 6, 2021

Why Helping Buyers Feel Confident Is Vital for Effective Marketing

In a 2020 survey of senior marketing leaders by Gartner, participants were asked to identify their company's primary strategy for fueling growth into 2021. The two most frequently identified growth strategies were increasing sales of existing products to existing customers (39% of respondents) and introducing new products to existing customers (34% of respondents). 

These survey findings demonstrate the importance marketing leaders place on increasing revenues from existing customers. But the reality is, many companies struggle to achieve their goals for revenue growth from existing accounts.

Other research by Gartner explored what factors drive growth from existing accounts and how marketers can support this objective. In this study, Gartner surveyed 1,100 B2B customers who had recently considered continuing or expanding their relationship with an existing supplier. The research tested three potential drivers of account growth - customer satisfaction, willingness to change, and decision confidence.

The Importance of Decision Confidence

The Gartner research identified an important distinction between a repurchase decision and a decision that involved expanding the relationship with a supplier (a "growth" decision). The study found that customer satisfaction had a major impact on repurchase decisions, but no significant effect on "growth" purchases. In contrast, Gartner found that decision confidence increased the likelihood of a positive growth decision by 2.6 times.

Gartner defined decision confidence as:  "The belief and feeling of affirmation that the buying group is exercising sound judgment."

While the Gartner definition captures the essence of the idea, I would argue that decision confidence is a multifaceted phenomenon that has three major components.

  1. Confidence in the specific product or service selected
  2. Confidence in the company's ability to successfully implement any organizational changes required to reap the full benefits of the product or service purchased
  3. Confidence in the soundness of the process used to make the purchase decision
These components of decision confidence are obviously related, and it's unlikely that a growth purchase decision will be made until the buying team (and in some cases other senior business leaders) develop all three types of confidence.
Marketing's Role in Cultivating Decision Confidence
Marketers have an important role to play in cultivating all three types of buyer decision confidence given that B2B buyers are relying more and more on content to support their evaluation of potential purchases. It's important to recognize that decision confidence plays a vital role in growing revenue from both existing and new customers. It's also clear that marketers are doing a better job with some types of buyer decision confidence than others.
For example, many marketers are doing a good to very good job cultivating buyer confidence in their company's products or services. In fact, most of the content produced by marketers is designed (at least implicitly) to accomplish this objective.
Some marketers are also doing a good job supporting the development of buyer confidence in the ability of their company to make the organizational changes that will be necessary to reap the full potential benefits of a new product or service. A growing number of companies now have a dedicated customer success function that is tasked with helping customers maximize the value they obtain from the company's products or services.
Overall, marketers have been less effective at cultivating buyer confidence in the soundness of the process used to make purchase decisions. To be fair, some marketers - especially those in the technology space - have created "buying guides" or similar resources for at least some of their solutions. Over the past two-plus decades, I've reviewed dozens of these buying guides, and unfortunately, most of them focus almost entirely on the attributes, features, and capabilities that prospective buyers should look for when evaluating a particular type of solution.
While identifying critical product or service attributes, features, and capabilities is obviously important, more is needed for a sound, effective, and efficient buying process. Here's a partial list of the additional questions that a comprehensive "buying instruction manual" should address.
  • Buying Team - Who should be on the buying team? How large should it be? Who should lead the team? How will the team make decisions?
  • Needs/Requirements - How should the buying team identify and prioritize the company's needs and requirements pertaining to a new product or service? Hint:  A multi-page "checklist" of requirements isn't the best approach.
  • Potential Vendors - How should the buying team identify relevant potential vendors and then decide which potential vendors to engage with?
  • Solicitation Vehicle - What type of solicitation vehicle should the buying team use - an RFI, an RFP, or an RFQ? How should the team structure the solicitation document?
  • Demos - How should the buying team structure and conduct demos to make them more relevant and valuable?
The specific content of an effective buying guide will, of course, be dictated by the nature of the product or service and by the size of the required financial investment.
Marketers must also recognize that a buying guide will only instill decision confidence if buyers perceive it to be objective and unbiased. Therefore, when developing a buying guide, marketers must resist the urge to create a document that explicitly or implicitly favors their company's solution. The sole objective of the buying guide should be to help prospective buyers make the best possible decision for their organization.

Top illustration courtesy of Chris & Karen Highland via Flickr (CC).

Sunday, May 30, 2021

Companies Take a More Holistic Path to Managing Revenue Growth

Changes in the business environment have led many B2B companies to adopt new approaches for managing their revenue generating activities. While the specific approaches vary, they all arise from the recognition that consistent organic revenue growth results from a combination of related activities. Therefore, it's important to treat such activities as components of a larger revenue generation process that must be managed holistically.

The need for a better approach to managing revenue generation and growth has been driven by the convergence of several factors, including:

  • The growing power and independence of business buyers enabled by an abundance of easily-accessible information
  • The need to provide outstanding experiences at every touchpoint across the entire customer lifecycle
  • The growing use of "as-a service" and other types of subscription-based (or subscription-like) business models
Meanwhile, the leaders of most B2B companies are under persistent pressures to provide organic revenue growth that is consistent, predictable and sustainable. To meet this challenge, many B2B companies have changed how they manage the business activities and processes that impact revenue generation.
The Rise of the Chief Revenue Officer
Some companies have responded to the growth management challenge by creating a C-level position that is usually called the chief revenue officer. The specific duties of the chief revenue officer - and the scope of his or her authority - vary across companies, but the CRO is usually tasked with managing most or all of the company's revenue generating functions. This will often include marketing, inside sales/business development, direct outside sales, channel sales and customer success/customer service.
Most of the early adopters of the CRO role were startup or early-stage SaaS companies. I have not seen any reliable estimates of how many or what kinds of companies now have a CRO. However, a LinkedIn search yesterday using the term "chief revenue officer" identified over 250,000 LinkedIn members with that job title.
The Emerging Revenue Operations Function
Some companies have sought to address the growth and revenue management challenge by creating a revenue operations (a/k/a RevOps) function in their organization. The RevOps concept is relatively new, and it's still evolving. So, as we'll see, companies have implemented RevOps in a variety of ways.
In a 2019 study report, SiriusDecisions (now part of Forrester) defined revenue operations as, ". . . a combination of sales operations, marketing operations and customer success operations teams that work together according to a set of defined operating principles to maximize revenue and performance." (Source:  Align to Win:  The Rise of Revenue Operations)
Research has shown that the use of RevOps functions is growing. In a 2019 survey of 2,462 B2B sales and marketing professionals by LeanData and Sales Hacker, 31% of the respondents said their company had a revenue operations group, up from 20% in the 2018 edition of the survey. Moreover, 27% of the respondents in the 2019 survey said they were actively building a RevOps function. That was up from 15% in the 2018 survey.
Both the LeanData/Sales Hacker study and the SiriusDecisions study identified three major models of revenue operations.
  • Virtual Alignment - Companies using this model do not have a formal RevOps structure or a dedicated RevOps team. In this model, individuals from each operations team (marketing, sales, customer success) agree to work with each other on a cooperative basis. SiriusDecisions called this model a "coalition of the willing."
  • Hybrid - This is a "somewhat centralized" model of RevOps. Companies using this model have at least two operations functions that report to a RevOps leader, while their other operations functions still report to their departmental leader.
  • Centralized - This is the most formal structure for a RevOps function. Companies using this model have s designated revenue operations leader in place, and some also have a dedicated RevOps team.
The following table shows the percentages of participants in the LeadData/Sales Hacker and SiriusDecisions studies using each model of revenue operations.

As the table shows, the most popular RevOps model in 2019 was virtual alignment, which reflects the relative newness of the RevOps concept. This also suggests that company leaders want to prove the value of RevOps before they make major changes in their organizational structure. As companies gain experience with RevOps, it seems likely that the use of a more formal and centralized RevOps model will grow.
Is More Needed?
Companies are hiring chief revenue officers and implementing revenue operations processes because they need to take a more holistic approach to managing revenue growth. These are steps in the right direction, but company leaders may need to do more to achieve their customer experience and revenue growth goals. I'll discuss what else may be needed in a future post.

Sunday, May 23, 2021

How Quickly Will U.S. Consumers "Move Past" COVID-19?

Back in March, I published a post describing the increasingly optimistic outlook for the U.S. economy in 2021. Then last month, I wrote about the equally optimistic outlook for marketing and advertising spending this year.

The optimism embodied in the economic and spending forecasts is largely due to a widespread belief that the COVID-19 pandemic in the U.S. will be brought under control in the near future and that this will unleash pent-up consumer demand that will drive rapid economic growth, increased consumer spending, and falling unemployment.

Three recent surveys have provided several important insights regarding the sentiment of U.S. consumers. These surveys explored how consumers are thinking about the overall state and direction of the U.S. economy, their spending plans, and their attitudes about returning to prepandemic behaviors and routines.

Consumer sentiment is obviously important for B2C marketers, but it also matters to B2B marketers. Consumers are at the end of many B2B value chains, and therefore consumer demand influences the revenue growth potential of many B2B companies. Boeing doesn't sell commercial airplanes to consumers, but the willingness of consumers to travel influences how many planes Boeing can sell.

The McKinsey Survey

Over the course of the pandemic, McKinsey & Company has produced an impressive library of resources addressing the public health aspects of COVID-19 and the pandemic's economic and social impacts. McKinsey's research has included periodic surveys of consumers and business executives.

The most recent consumer survey was conducted February 18-22, 2021. In this survey, 41% of the respondents said they were optimistic about the recovery of the U.S. economy, while only 14% said they were pessimistic. The survey defined optimistic as:  "The economy will rebound within 2-3 months and grow just as strong as or stronger than before COVID-19." The remaining 45% of the respondents had a mixed view, believing that the economy will be impacted for 6-12 months or longer and will stagnate or grow slowly thereafter.

Thirty-three percent of the respondents said they were already engaging in "normal" out-of-home activities (returning to stores, restaurants, etc.), and 75% of vaccinated respondents said they expected their routines will return to normal by the end of this year.

Fifty-one percent of the respondents said they expected to spend extra by splurging or treating themselves, and about half of these respondents plan to spend more in the near future.

The Gartner Survey

A January 2021 survey by Gartner paints a similar picture of consumer sentiment, although the overall tone of the survey report is more cautious. The report states:  "CMOs should plan for the possibility that consumers may take longer to resume prepandemic behaviors, even after they have received the full two doses of the vaccine." (Note:  At the time of the survey, the single-dose J&J vaccine had not been authorized by the FDA.)

Gartner asked survey participants how soon they feel their life could return to normal after being fully vaccinated. Forty-five percent of the respondents said in six months or less, 36% said they were unsure, and 15% said in a year.

Gartner also asked survey participants about their willingness to engage in several specific activities after being fully vaccinated. The following table shows the four activities that respondents were most willing to engage in. Note that none of these activities was identified by a majority of the survey respondents. And only 15% of the respondents said they would be willing to stop wearing a mask or go to large public gatherings, even after being vaccinated.

The Pew Research Survey

One of the largest recent surveys addressing the "when will things get back to normal" issue was a survey of a nationally representative panel of 12,055 U.S. adults conducted March 1-7, 2021 by Pew Research Center. In this survey, Pew Research asked participants the following questions:

  1. "Just your best guess, how long do you think it will be before most businesses, schools, places of worship and other public activities operate about as they did before the COIVD-19 outbreak?"
  2. "Just your best guess, how long do you think it will be before the job situation in the U.S. recovers to about where it was before the COVID-19 outbreak?"
The following table shows how the survey respondents answered these questions.

As the table shows, 57% of the respondents believe it will take at least a year for most businesses and other public activities to return to normal operations, and more than eight out of ten of the respondents (81%) do not believe that unemployment will fall to prepandemic levels for at least a year.
My Take
I wasn't particularly surprised by the caution identified by the Gartner survey, which was conducted in January. At that time, the vaccine rollout was just getting started, and the number of daily new cases of COVID-19 was still high. I suspect if Gartner conducted the same survey today with the same survey panel, the results would be quite different.
I was somewhat surprised that a majority of the respondents in the Pew Research survey believed that most businesses and public activities won't return to normal operations for at least a year. The Pew survey was conducted in early March, by which time the number of daily new cases of COVID-19 in the U.S. had declined significantly, and it had become clear that the vaccine rollout was going well.
Current data from the CDC regarding vaccination progress, current data from the TSA regarding the number of people flying, and the latest quarterly earnings reports from several large U.S. retailers indicate to me that the "return to normal" is progressing even faster than many of us anticipated.

Top image courtesy of Robert Couse-Baker via Flickr (CC).

Sunday, May 2, 2021

Why It Pays To Be Empathetic and Benevolent

Empathy became one of the hottest topics in marketing last year. Yesterday, I performed a Google search using the term empathy in marketing for the period of March 1, 2020 through March 31, 2021. The search returned over 5.5 million results.

Marketing thought leaders and practitioners have long recognized that empathy plays a valuable role in marketing, but the COVID-19 pandemic elevated the importance of infusing marketing actions and communications with empathy. In a global survey of marketing decision makers conducted last fall by Salesforce, 81% of the respondents said their prioritization of providing customers with empathetic, personalized messages had increased because of the pandemic.

Social scientists generally define empathy as the ability to recognize, understand, and share the thoughts and feelings of another person. To develop empathy, marketers need to put themselves in their customers' shoes in order to understand and feel what their customers are thinking and feeling. With these insights, marketers will be better able to create content and messaging that will resonate emotionally and rationally with customers.

Empathy is also vital for effective B2B marketing because empathetic marketing communications will signal that a company is worthy of a customer's trust. And trust is the single most critical component of strong, long-lasting customer relationships. To be clear, empathy alone cannot create trust, but empathetic communications will make customers more inclined to extend their trust.

How Trust Arises

Trust has been widely studied by psychologists and other social scientists, so we have a sound understanding of what creates a willingness to trust and how trust develops. Most social scientists agree that an individual's willingness to trust another person or an organization - and the level of trust that will develop - largely depends on the perceived trustworthiness of the other person or organization. Most scientists also agree that the trustworthiness of a person or organization is primarily based on three factors - ability, integrity, and benevolence.

Therefore, the willingness of a potential buyer or an existing customer to trust a vendor depends on whether - and to what extent - the vendor exhibits these three antecedents of trustworthiness. In the trust context, ability and integrity mean what they normally do, but benevolence has a special meaning. The essence of benevolence is putting the interest of another person or organization above your own.

Ability, integrity, and benevolence are equally important for the development of trust, but benevolence is the most potent source of differentiation because it is the rarest of the three trustworthiness attributes. Benevolence is rare, not because most companies are intentionally "malevolent," but because the importance of benevolence is usually underappreciated.

The Importance of Benevolence

There isn't a lot of recent research regarding the role of benevolence in business relationships, but a 2016 survey of 2,400 consumers by MECLABS Institute shows why benevolence is so important. For this study, MECLABS divided the survey participants into two equal groups. One group (the "satisfied customers") were asked to think about a company they were highly satisfied with when answering the survey questions. The other group (the "unsatisfied customers") were asked to think about a company they were very unsatisfied with.

When the unsatisfied customers were asked which of thirteen statements were true about their experience with the company, the most frequently selected statement was:  "The company does not put my needs and wants above its own business goals." In this survey, 60% of the satisfied customers said the company often or always puts their needs before its business goals, compared to only 16% of the unsatisfied customers.

This study also demonstrated how benevolence contributes to important and valuable business outcomes. MECLABS asked survey participants how likely they were to take several actions, and the following table shows the stark differences between the responses of satisfied vs. unsatisfied customers.

The MECLABS study showed that the "value chain" of benevolence works like this:  Benevolence contributes to a perception of trustworthiness, which enhances the development of trust. And trust contributes to a higher level of customer satisfaction, which leads to improved business outcomes.

So, practicing benevolence isn't only "the right thing to do," it's also a powerful driver of business performance. And empathetic marketing communications are a vital link in the customer trust value chain.

Top image courtesy of EKG Technician Salary via Flickr (CC).

Sunday, April 25, 2021

Use a "Barbell" Strategy for Better B2B Marketing

Many professional investors use a "barbell" strategy when constructing their portfolios. The barbell strategy was popularized in the early 2000's by Nassim Nicholas Taleb. Taleb has been a derivatives trader and a hedge fund manager, but he is best known as the author of The Black Swan and several other books regarding randomness, probability, and uncertainty.

The essence of the barbell strategy is investing simultaneously in extremely low-risk assets (such as U.S. Treasury bills) and extremely high-risk assets (like stock options or IPO's), while avoiding middle-of-the-road choices. The assets at the ends of the barbell have very different characteristics, and the investments are made with very different objectives in mind. Proponents argue that over time, a barbell strategy increases the odds of achieving superior overall returns.

The Barbell Strategy for B2B Marketing

A barbell is also an apt visual metaphor for B2B marketing. As the following diagram shows, the two components of the B2B marketing barbell are brand marketing and demand generation marketing. We now have persuasive evidence that companies must excel at both to produce superior marketing results.

The barbell metaphor is appropriate because brand marketing and demand generation differ in several major ways. Most importantly, they have fundamentally different objectives.

The objective of most brand marketing programs is to evoke changes in the minds of potential buyers. For example, such programs are often designed to:

  • Make potential buyers aware of the brand (company or product)
  • Cause potential buyers to remember or think of the brand when a need or buying situation arises
  • Cultivate favorable perceptions of the brand in the minds of potential buyers 
In contrast, the objective of demand generation programs is to elicit a behavioral response from potential buyers who are engaged in - or are at least ready to begin - an active buying process.
These dissimilar objectives call for different marketing tactics and messaging, and the following table highlights some of the important differences. For example, because brand marketing is primarily intended to influence the feelings and perceptions of potential buyers, the messaging usually needs to have a more emotional appeal. Demand generation messaging, on the other hand, usually works better when it is more rational.

Many companies have traditionally used separate teams for brand marketing and demand generation. This approach enables them to develop the specialized knowledge and skills needed to perform both marketing disciplines more effectively. Unfortunately, this approach often leads to the development of organizational silos that result in a disconnect between the company's brand marketing and demand generation efforts.
In a recent article, four McKinsey & Company consultants argued that this disconnect can have important negative implications. They wrote:  "For many companies, this split is inhibiting growth aspirations. Budget and impact conversations often become contentious:  performance marketers tout their ability to drive clicks while brand builders argue for longer-term investments . . ."
Some marketing thought leaders have argued that the solution to this problem is to integrate brand marketing and demand generation to create a single, so-called "full funnel" marketing discipline. The risk with this approach is that the specialized knowledge and skills required to excel at each discipline will be diluted.
The better solution is to improve the coordination of brand marketing and demand generation programs by improving the relationship between the two teams. Once again, a barbell provides a useful visual metaphor. Every barbell has a bar, and the following diagram depicts the major components of the bar that connects brand marketing and demand generation.

As the diagram shows, there are four keys to elevating the relationship between brand marketing and demand generation teams.
Recognized Interdependence - Brand marketers and demand gen marketers must recognize that the two functions are deeply interdependent, that they need each other, and that coordinated efforts are essential for success.
Shared Understanding - Marketers in both disciplines need to have a shared understanding of the fundamental factors that make up the marketing environment. This includes the brand purpose, the positioning of the brand (i.e. core value propositions), and the structure of the market (size, competitive landscape, customer buying processes, etc.).
Ongoing, Self-Directed Collaboration - Brand marketers and demand gen marketers need to work collaboratively on an ongoing basis, and this collaboration needs to occur naturally and spontaneously, at all levels of both functions, whenever and wherever it's needed.
Linked KPI's - Because of the significant differences between brand marketing and demand generation, it's not feasible for the two functions to use the same exact set of performance metrics. However, the two functions should share some KPI's, and it's particularly important to measure the impact of brand marketing on the performance of demand generation programs.

Top Image Courtesy of Lance Goyke via Flickr (CC).

Sunday, April 18, 2021

Four Essential Attributes of Outstanding B2B Customer Experience

 Merkle B2B and two of its constituent firms, B2B International and gyro recently published the results of research that focused on what is required to consistently deliver world-class customer experiences, and where most companies have work to do to meet those requirements.

The research report is based on an analysis of 5,000 previous studies relating to customer experience and on over 3,000 interviews with B2B buyers and key decision-making influencers in North America, Europe, and Asia-Pacific. The interviews examined over 5,000 brand experiences involving the purchase and use of financial services, manufactured goods, professional services, and technology solutions.

The report begins with a rather sobering assessment of the overall quality of B2B customer experiences. The authors observed that over 35% of the interviewees with large companies (1,000 or more employees) said that buying from B2B suppliers is often a difficult process. So it's not surprising that the resulting customer experience is often mediocre. An analysis of Net Promoter Scores found that two-thirds of B2B customers have a passive or negative customer experience.

Merkle's report summarized the state of B2B customer experience in stark terms:  "We have established that the process of identifying, researching, choosing, and using a B2B supplier is rarely impressive, often ordinary, and frequently suboptimal."

The Four "Brand Superpowers"

Merkle identified four factors that collectively produce world-class customer experiences - Reliability, Understanding, Enrichment, and Preeminence. The report refers to these factors as "brand superpowers," and it places each superpower into one of two groups based on the type of value delivered.

Reliability and Understanding are superpowers that deliver "business" value directly to the customer organization, while Enrichment and Preeminence provide "personal" value to individual buyers, influencers, and users. Here's a brief overview of the attributes of each superpower.

Reliability - Merkle uses the term Reliability to describe company and product/service attributes that address basic business requirements. So this superpower includes good product quality, dependable customer service, and appropriate product/service pricing. If we think in terms of a hierarchy of needs, Reliability would be at the base.

Understanding - In Merkle's framework, Understanding refers to the quality of the relationship between a company and the business organizations it serves. Merkle says that Understanding includes attributes such as tailoring, adaptability, service, and aligned business cultures and philosophies. The report puts it this way:  "Where Reliability speaks to performance, Understanding is concerned with experience - the whole business-to-business customer journey must work in a seamless and integrated way."

Enrichment - Enrichment refers to a company's ability to make work life easier or better for the individuals in the customer organization who use or otherwise interact with the company or its product or service. So Enrichment provides personal value because the benefits are experienced by individuals, rather than by the customer organization. Enrichment also includes enhancing the professional knowledge and skills of individuals through educational resources and events.

Preeminence - In Merkle's model, Preeminence is the superpower that enables a company to enhance the professional status of the people in the customer organization who made the decision to do business with the company. A company that succeeds with this superpower is usually a recognized innovator and thought leader in its field, and if it also excels at Reliability, Understanding, and Enrichment, the people who made or influenced the decision to do business with the company will see their status enhanced in the eyes of their colleagues.

The B2B decision makers interviewed for the Merkle study generally gave companies good marks for delivering on the Reliability superpower, but they rated performance on the Understanding superpower as no more than satisfactory. The interviewees rated performance on almost every aspect of the Enrichment and Preeminence superpowers as unsatisfactory.

The idea that companies must provide both "business" and "personal" value isn't new. For example, a 2013 study by CEB (now part of Gartner) and Google also demonstrated that providing "personal" value is critical. This study tested the impact of more than seventy brand benefits on a range of "commercial outcomes," including familiarity, consideration, preference, purchase, repeat purchase, premium payment, internal advocacy, and external advocacy.

The researchers divided the benefits into two categories - business value benefits (those that flowed to the customer organization), and personal value benefits (those that flowed to individual "buyers"). The study found that personal value benefits had twice as much impact (lift) on commercial outcomes as business value benefits.

The Merkle research highlights the importance of the personal dimensions of B2B customer experience, and it provides a helpful framework for marketing, sales, and CX professionals to use when evaluating the quality of the experiences they are providing.

Image courtesy of frontriver via Flickr CC.

Sunday, April 11, 2021

How Brand Marketing Improves B2B Financial Performance

Persuasive evidence shows that most B2B companies will maximize growth by balancing the use of long-term brand marketing and short-term demand generation marketing. Yet few companies have adopted this approach. This post explains why the disconnect exists, and what to do about it.

Earlier this year, I wrote about the "Cold War" between B2B marketers (and agencies, consultants, and technology providers) who focus on the various forms of demand generation marketing, and those who advocate the importance of brand marketing.

It's clear that the proponents of demand generation marketing have been winning the war. For the past several years, the primary focus of most B2B marketers has been on using data and technology to improve the performance of their demand generation programs. Meanwhile, only a relatively small cadre of marketing thought leaders have continued to make the case for B2B brand marketing.

The preference for demand generation marketing is due to several factors.

Demand for Short-Term Results - Most B2B marketing leaders are under intense pressure to prove the value of marketing programs, and more specifically, to execute programs that will produce results quickly. Many marketing leaders emphasize demand generation programs because they usually produce measurable results faster than brand marketing programs.

Ease of Measurement - The performance of demand generation programs is relatively easy to measure. Such programs are usually designed to elicit a behavioral response from potential buyers, and those behaviors are easy to track. And because demand generation programs produce results quickly, the measurement timeframe is short. In contrast, the objective of most brand marketing programs is to evoke a change in the minds of potential buyers. For example, they are often designed to raise brand awareness and increase brand salience. These objectives are vital for growth, but they are difficult to measure because they don't involve observable behaviors.

Research Focus - Most of the research regarding the benefits of brand marketing is focused on B2C brands, while there is an abundance of research about the benefits of improving the effectiveness of B2B demand generation programs. This imbalance of evidence makes it easier for B2B CMOs to persuade their CEO to invest in demand generation.

Traditional Perceptions - The traditional view is that B2B buying decisions are primarily rational, and that personal selling is the primary driver of revenue generation. These perceptions cause many B2B company leaders to undervalue the contribution of brand building to revenue growth.

How Brand Marketing Creates Value

In order to convince CEOs and other senior company leaders to make appropriate investments in building the brand, B2B marketing leaders must be able to explain how brand marketing will drive important business outcomes. The chart below illustrates how effective brand marketing contributes to revenue growth, increased profitability and cash flow, and ultimately to increased company value.

The model depicted in the chart was inspired by the brand valuation model developed by the Marketing Accountability Standards Board (MASB), an organization composed of marketing industry professionals and marketing academics. The mission of the MASB is to develop evidence-based standards for measuring marketing performance and linking that performance to business financial outcomes. The chart specifically relates to the role of brand marketing in a B2B company.

This chart illustrates three major points about B2B brand marketing.

Customer Preference - Cultivating customer preference is the linchpin goal of all B2B brand marketing, and in fact, it's the primary goal of all forms of marketing. Customer preference is what ultimately drives sales, and in B2B, customer preference is formed from a combination of rational and non-rational factors.

Brand Marketing Operates Directly and Indirectly - Effective brand marketing operates directly to increase buyer awareness and familiarity and to cultivate customer preference. But it also works indirectly by improving the performance of demand generation programs, as research has shown.

Impact on Revenue/Profit - By  cultivating increased customer preference, effective brand marketing impacts four key measures of revenue and profit growth. More specifically, an effective brand marketing program will contribute to increases in:

  • The number of sales
  • The velocity of sales (shortened sales cycles)
  • The average gross margin earned on sales (by reducing price sensitivity)
  • Market share
Parting Thought

Brand marketing is an integral part of a complete marketing strategy in a B2B company, but its importance and value are often not appreciated. The model discussed above can help B2B CMOs have meaningful conversations with their CEO and other senior company leaders about the need to make sufficient investments in building the brand. 

Top image courtesy of EdgeThreeSixty via Flickr (CC).

Sunday, April 4, 2021

2021 Looks To Be a Rebound Year for Marketing and Advertising

The COVID-19 pandemic upended marketing and advertising at many companies last year. Confronted by a historically high level of business and economic uncertainty, many marketers were forced to dramatically change their marketing plans, and in some cases at least, to substantially reduce marketing and advertising spending.

Today, the outlook for marketing and advertising is considerably brighter. As I wrote last month, many economists now believe the U.S. economy will grow (measured by real GDP) between 4% and 7% in 2021, a rate of growth we haven't seen in decades. As a result, many marketing industry forecasters are predicting that marketing and advertising spending will also grow substantially in 2021. 

The Ad Agency Forecasts

Three global advertising agencies - IPG's Magna, Publicis' Zenith, and WPP's GroupM - recently published their estimates of advertising spending for 2020 and 2021. The following table shows the agency forecasts for total advertising spending in the United States. As might be expected, these agencies estimate that overall advertising spending declined in 2020, but they expect the advertising market to grow significantly in 2021.

The strength of digital advertising is clearly reflected in the agency estimates. The table below shows the estimates of year-over-year growth of spending on digital advertising in the U.S. for 2020 and 2021. All three agencies estimate that despite the COVID-19 pandemic - or perhaps because of the pandemic - digital advertising spending actually increased in 2020, and they expect the growth to continue this year.

All three agencies also estimate that spending on digital advertising will represent more than half of total advertising spending in the U.S. in both 2020 and 2021.

I should note that these estimates were published in December of last year. Therefore, they don't reflect the current level of optimism about the growth of the U.S. economy. I suspect these agencies will soon be increasing their estimates of U.S. advertising spending for 2021.

The Winterberry Group Forecast

Winterberry Group, a specialized management consultancy focused on the advertising, marketing, data, technology, and commerce sectors, issued a new forecast for advertising and marketing spending in January of this year. Winterberry divided its forecast into two major categories - offline media and online media. 

The following table contains Winterberry's estimates for U.S. offline media spending for 2020 and 2021. As the table shows, Winterberry is estimating that spending fell in 2020 in every offline media category except addressable TV. The firm predicts that six of the nine offline media categories will return to growth in 2021, with the laggards being linear TV, newspapers, and magazines.

The Winterberry forecast also reflects the resilience and continuing growth of marketing and advertising via digital channels. The table below shows Winterberry's estimates for U.S. online media spending for 2020 and 2021. Winterberry is estimating that spending in five of the eight online media categories actually grew in 2020, and the firm predicts that spending in all eight categories will grow substantially this year.

What Marketers Are Saying

The latest edition of The CMO Survey provides strong evidence that U.S. marketers are also expecting a rebound in marketing and advertising this year. The February 2021 edition of the survey generated 356 responses from senior marketing leaders in the United States. Almost two-thirds (64.6%) of the respondents were affiliated with B2B companies, and 94.5% were at VP level or above. The survey was fielded January 6-26, 2021.

The survey asked participants how their level of marketing spending had changed in the twelve months preceding the survey (essentially 2020), and how they expected spending to change in the twelve months following the survey (essentially 2021).

The survey respondents reported that their marketing spending declined by 3.9% (mean of all responses) over the twelve months preceding the survey, but they expect spending to increase 10.1% over the twelve months following the survey. More specifically, the respondents expect digital advertising spending to grow 14.3% over the following twelve months, while traditional advertising spending will be essentially flat (-0.2%).

The Takeaway

If history is a guide, it's likely that these forecasts and marketer expectations won't prove to be completely accurate on the specifics, but they are likely to capture the larger trends. Rapidly improving economic and business conditions will drive increase spending on marketing and advertising this year, and the popularity of digital methods and channels will continue to grow.

Top image courtesy of (CC)

Sunday, March 28, 2021

McKinsey Touts the Value of Industrial Brands

Earlier this year, McKinsey & Company published an article - "The rising value of industrial brands" - that provides important evidence regarding the value of strong brands for industrial companies. This article describes the results of an analysis of more than 5,300 brands of about 900 companies.

The McKinsey researchers examined brands in ten major industrial sectors, specifically:

  • Automotive and ancillaries
  • Aviation, aerospace, and defense
  • Electrical components and equipment
  • Electronic components and equipment
  • Home and building products and technology
  • Industrial diversified
  • Industrial machinery
  • Industrial materials
  • Industrial services
  • Industrial trading and distribution
To enable accurate comparisons, the researchers grouped similar brands (in terms of products offered and end-market focus) in more than a thousand "microvertical" segments.
The Value of Brand Visibility
The McKinsey analysis produced several interesting data points about the market structure of the industrial sector, but the findings relating to brand visibility are most relevant for B2B marketers.
To evaluate brand visibility, the researchers tallied the mentions earned by each brand in media outlets, including the industry publications that potential customers use to educate themselves about products and services. The researchers also tracked the volume of searches for each brand on major online search engines.
The analysis found that brand visibility is highly concentrated. On average the top 5% of industrial brands capture 95% of the total share of voice. And in each of the ten major industrial sectors, the top three companies capture about 60% (on average) of the share of voice in relevant publications.
The analysis also revealed that brand visibility tends to decline over time. From 2015 through 2019, about 60% of the brands studied became less visible. However, 10% of the brands in the study grew their visibility by 50% or more over the same period.
McKinsey's researchers also found that brand visibility (specifically, brand visibility growth) was strongly correlated with higher levels of financial performance. From 2015 through 2019, companies in the top quartile of brand visibility growth produced an average return on invested capital (ROIC) that was 33% higher than companies in the bottom quartile.
In addition, companies in the top quartile of brand visibility growth saw their ROIC increase by an average of one percentage point from 2015 through 2019, while companies in the bottom quartile saw their ROIC decline by two percentage points over the same period.
Why Strong Brands Improve Performance
Marketing experts widely agree that a strong brand produces several important benefits. Numerous research studies have shown that a strong brand will improve the performance of sales activation and demand generation marketing programs, which ultimately results in lower customer acquisition costs. There is also persuasive evidence that a strong brand can reduce the price sensitivity of some prospective buyers and make them more willing to pay a price premium, which can improve gross profit margins.
The McKinsey article enumerates even more advantages of a strong brand:  "Powerful brands also make customers more loyal, more willing to tolerate small missteps, and more likely to promote products and services to colleagues, friends, and family."
A strong brand produces these benefits primarily by inspiring confidence. In essence a strong brand provides reassurance to potential buyers and existing customers that they are making/have made a good buying decision.
The McKinsey article argues that such confidence and reassurance are just as important to business buyers as they are to consumers. The article states:
"Across industries, many senior procurement executives tell us that they rely on just a handful of brands for critical services, equipment, spare parts, and so on. They believe these brands offer high quality and reliability to help users avoid downtime, delays, and accidents . . ."
Some marketers have tended to assume that brand visibility, brand salience, and brand positioning are less important for B2B companies than for B2C companies. The McKinsey article should cause marketers to rethink these assumptions.

Image courtesy of David Fulmer via Flickr (CC).

Sunday, March 21, 2021

Research Explores the Value of B2B Thought Leadership

Image Source:  Grist

Grist, a B2B thought leadership and content marketing agency based in London, recently published the results of its Value of Thought Leadership Survey 2020 (the "2020 Survey"). The 2020 Survey was conducted in October of last year and produced responses from 525 senior executives at global organizations operating in ten industry sectors. Respondents were located in eleven countries.

The 2020 Survey is the third installment of Grist's research regarding B2B thought leadership. The firm also conducted surveys in 2018 (the "2018 Survey") and 2016 (the "2016 Survey"). This type of research can be particularly useful because it allows us to see how survey responses have or haven't changed over an extended period of time.

The Grist research echoes the findings of many other studies regarding the importance of thought leadership in the B2B marketing mix. In the 2020 Survey, 91% of the respondents said thought leadership is either critical (40%) or important (51%) to their decision making. The comparable percentage in the 2018 Survey was even higher - 99%.

The 2020 Survey also revealed that many senior executives had increased their consumption of thought leadership content since the beginning of the COVID-19 pandemic. Nearly half (45%) of the respondents reported consuming a little more (26%) or a lot more (19%) thought leadership content. Twenty-eight percent of the respondents reported consuming the same amount.

Reasons for Consuming Thought Leadership Content

In all three surveys, Grist asked participants why they consume thought leadership content. The following table shows the three reasons most frequently cited by respondents in each of the three surveys.

As the table shows, the most popular reasons for consuming thought leadership have been relatively consistent in all three surveys. One notable development is that thought leadership content is now playing a larger role in the process of vetting potential vendors. In the 2020 Survey, 60% of the respondents said they use thought leadership to evaluate the expertise of potential suppliers. That was up from only 36% in the 2016 Survey.

Other research has also shown that the quality of thought leadership has a major impact on supplier selection. For example, in the 2020 B2B Thought Leadership Impact Study by Edelman Business Marketing and LinkedIn, 48% of the survey respondents said thought leadership content had led them to award business to a company, and 25% said poor thought leadership content had directly led them not to do business with a company. 

Qualities of Valuable Thought Leadership

In all three surveys, Grist also asked participants what qualities make thought leadership content valuable and useful. The following table shows the qualities most frequently selected by respondents in each of the three surveys.

As this table reveals, the qualities that senior executives look for in thought leadership content have also been relatively consistent since 2016. Fresh thinking was a top three selection in all three surveys, and forward-thinking was a top three choice in the 2020 Survey and the 2016 Survey. In addition, the quality called evidence-led in the 2016 Survey was defined as "containing robust data." So robust data was a highly-rated quality in two of the three surveys.

One type of thought leadership content that significantly increased in importance between 2018 and 2020 is content that is action-oriented. In the 2020 Survey, 32% of the respondents said that being action-oriented ("helping make more informed decisions") is a valuable quality of thought leadership content. That was up from only 18% in the 2018 Survey.

The "Lifespan" of Thought Leadership

In the 2020 Survey, Grist asked senior executives what management time frame they were primarily concerned about. Twenty-nine percent of the respondents said the "next 3 months," and almost half (49%) said the "next 3-12 months." These responses should not be surprising.

When the survey was fielded in October of last year, the COVID-19 pandemic was still foremost in the minds of most business leaders. New cases were rising in many countries, and it wasn't clear when safe and effective vaccines would become available. Under these circumstances, it's not surprising that senior executives were focused primarily on the immediate and near-term future.

The Grist report states that thought leadership content has traditionally focused on time horizons of "3, 5, 10 or even 20 years into the future," and that marketers are rethinking "how long it takes to produce thought leadership and how long it remains relevant."

My view is that the "time frame" issue will have less impact on thought leadership than the authors of the Grist report seem to believe. In my experience, most good thought leadership content addresses major issues that are likely to have a significant impact over an intermediate time frame, say the next 1-2  years. In addition, as the COVID-19 pandemic subsides and business conditions begin to normalize, senior business leaders are likely to expand their management time horizons and return to somewhat longer-term thinking.

Sunday, March 14, 2021

B2B Highlights From "The CMO Survey"

The findings of the February 2021 edition of The CMO Survey were published last month. The CMO Survey is led by Dr. Christine Moorman and sponsored by Duke University's Fuqua School of Business, the American Marketing Association, and Deloitte.

The latest survey results are based on responses from 356 senior marketing leaders at companies based in the United States. Almost two-thirds (64.6%) of the respondents were affiliated with B2B companies, and 94.5% were VP level or above. The survey was fielded January 6-26, 2021.

The CMO Survey is conducted semi-annually, and it's a valuable resource for capturing the views of U.S. marketing leaders regarding the overall economic environment and major marketing trends. In addition to top-level results, survey findings are reported by four economic sectors - B2B product companies, B2B services companies, B2C product companies, and B2C services companies. Unless otherwise indicated, the results described in this post are based on the responses of B2B marketers.

B2B Marketers Are Optimistic About the Economy

The survey asked participants to rate their optimism about the overall U.S. economy using a 100-point scale, with 0 being the least optimistic and 100 being most optimistic. The following table shows how B2B survey respondents rated their level of optimism in the February 2021 survey and the two immediately preceding surveys. As this table shows, B2B marketers' current level of optimism surpasses the February 2020 (pre-pandemic) level.

The survey also asked participants whether they were more or less optimistic compared to the fourth quarter of 2020. More than half of the B2B respondents - 51.3% of those from B2B product companies and 58.8% of those from B2B services companies - said they were more optimistic.

Marketing Became More Important in 2020

A substantial majority of B2B marketers believe the importance of their marketing function increased in 2020. Sixty-nine percent of the survey respondents from B2B product companies, and 76.6% of those from B2B services companies said that marketing became more important at their company last year.

It should not be surprising that the marketing function increased in importance in 2020. In a survey of B2B decision makers conducted last April by McKinsey & Company, 96% of the respondents reported that the COVID-19 pandemic had already required them to make changes in their go-to-market model. Many of these changes involved a shift from face-to-face interactions with existing and potential customers to content-based interactions, many of which were/are digitally enabled. Hence the growing importance of the marketing function.

Pandemic-Driven Strategies Will Be Durable

The COVID-19 pandemic caused dramatic changes in how both consumers and business buyers shop for, learn about, and buy products and services. As a result, many marketers made major changes in how they reached and engaged with customers. The big challenge for marketers now is to determine which of the new customer behaviors will persist after the pandemic has subsided, and therefore, which of the new marketing strategies will continue to be important.

An overwhelming majority of B2B respondents in The CMO Survey believe the marketing strategies implemented because of the pandemic will remain important after the pandemic has ended. The survey asked participants to what degree they thought the marketing strategies they used during the pandemic would be important in the long term. Respondents rated the continuing importance on a 7-point scale, and more than eight out of ten B2B respondents rated the long-term importance at 5 or above.

Other Findings

The CMO Survey addressed several other important issues, and I recommend that you review the full report. Here are a few of the other important findings.

  • Respondents from B2B product companies reported that their marketing spending declined 6.5% in the twelve months preceding the survey, but they expected spending to increase 11.3% in the twelve months following the survey.
  • Respondents from B2B services companies reported a 1.6% increase in marketing spending over the preceding twelve months, and they expected a 10.3% increase over the following twelve months.
  • B2B companies weathered the pandemic reasonably well. On average, B2B product companies grew revenues by 1.6% over the twelve months preceding the survey, while B2B services companies sustained an average revenue loss of only 1.0%.
  • A large majority of B2B survey respondents (77%) do not believe it is appropriate for their brand to take a stance on politically-charged issues. The picture is quite different for B2C marketers, where 33% of respondents from B2C product companies, and 42% of those from B2C services companies said it is appropriate for their brand to take a stance on such issues.
Top Image Source:  The CMO Survey.

Sunday, March 7, 2021

Why Marketers Should Be Preparing for Robust Economic Growth

Back in January, I wrote that B2B marketers should use a quarterly approach to planning in 2021 so that they are able to adapt to changing business conditions. Specifically, I recommended that marketers develop a revenue forecast for each quarter of the year and finalize the forecast in the month before the beginning of each quarter. Then, marketers can lock down their marketing plans for the coming quarter based on the final revenue forecast.

Marketers using a quarterly approach to planning in 2021 should be finalizing their revenue forecast for the second quarter within the next few days. The purpose of this post is to take an updated look at the prospects for the U.S. economy for the rest of this year. The good news is, the outlook for the economy has improved considerably over the past several weeks, and marketers need to be ready to take full advantage of robust economic growth over the balance of 2021.

Pandemic Progress = Economic Optimism

In 2020, economic and business conditions were tightly linked to the state of the COVID-19 pandemic and the public health measures implemented to mitigate the spread of the virus. That linkage will continue this year, but with very different results.

The state of the pandemic has improved dramatically over the past several weeks.

  • The number of daily cases, total hospitalizations, and daily deaths have all fallen substantially since their peak in early January. As of March 5th, daily reported cases were down 78%, hospitalizations were down 68%, and daily reported deaths were down 44%. (Data Source:  The New York Times)
  • The rollout of vaccines is progressing well. As of March 5th, about 55.5 million people had received at least one vaccine dose, and providers were administering vaccines at an average rate of about two million per day. (Data Source:  CDC)
  • On February 27th, the U.S. Food and Drug Administration granted emergency approval to the Johnson & Johnson vaccine, and the company is committed to delivering 20 million doses this month and a total of 100 million doses by the end of June. The Biden administration is now projecting that the U.S. will have enough vaccine doses for every American adult by the end of May.
There are still concerns about the virus "variants" that have already been identified and about the possibility of additional mutations appearing in the coming months. So far, however, it appears that the three vaccines approved for use in the U.S. will be effective against the known virus variants.
Because of these developments, there is now a widespread belief that the pandemic will be brought under control in the near future, and this is driving expectations for an accelerated economic rebound. As a result, many economists have recently raised their forecasts for the performance of the U.S. economy in 2021. Here are two examples.
The Conference Board Forecast
The Conference Board (a non-partisan economic and policy think tank) publishes a monthly forecast for the U.S. economy. The following chart compares the forecasts for real GDP growth in 2021 made by The Conference Board in December of last year and February of this year.

As this chart shows, The Conference Board has raised its forecast for real GDP growth in all four quarters of this year. The largest increases are in the first two quarters of 2021, which indicates The Conference Board's economists now believe the economic recovery is progressing faster than they previously anticipated.
For the entire year, The Conference Board expects real GDP to grow 4.4%, and it expects the U.S. unemployment rate to fall to 5.0% in the fourth quarter. The Conference Board is now projecting that the monthly output of the U.S. economy will return to pre-pandemic levels in July of this year.
The Conference Board's February forecast is based on four assumptions:
  1. New cases of COVID-19 peak early in the first quarter, and no widespread lockdowns are implemented.
  2. COVID-19 vaccinations rise in the first quarter, and vaccines are broadly available in the second quarter and universally available in the third quarter.
  3. The federal government approves a $1.5 trillion COVID relief package in March, and the fiscal support is deployed in the second quarter.*
  4. Modest improvements in labor markets and consumption in the first quarter precede a sharp rebound in the second and third quarters.
The Congressional Budget Office Forecast
The U.S. Congressional Budget Office issued a new economic forecast in February of this year. In this forecast, CBO projects that real GDP will grow 4.6% in 2021, and that the unemployment rate will fall to 5.3% in the fourth quarter of this year.
CBO noted that it was projecting a stronger U.S. economy in 2021 (compared to its July 2020 forecast), ". . . because the downturn was not as severe as expected and because the first stage of the recovery took place sooner and was stronger than expected . . ." CBO is now forecasting that real GDP will return to its pre-pandemic level in mid-2021.
It's important to note that CBO's forecast does not factor in any impact from President Biden's $1.9 trillion COVID relief proposal.* The forecast assumes, " . . . that current laws governing federal taxes and spending (as of January 12, 2021) generally remain in place and that no significant additional emergency funding or aid is provided . . ." (Emphasis added)
Many Economists are Even More Optimistic
Many economists are even more optimistic about economic growth in 2021 than The Conference Board and the CBO. For example:
  • On February 9th, Goldman Sachs raised its forecast for 2021 real GDP growth in the U.S. to 6.8% from 6.6%.
  • On February 22nd, Bank of America increased its estimate of 2021 U.S. real GDP growth from 6.0% to 6.5%.
  • On February 25th, Kiplinger predicted that U.S. real GDP will grow by about 5.5% in the first quarter and by 6.2% or more over the entire year.
Marketers, Get Ready for Growth
As I wrote back in January, the biggest challenge for marketers this year is to align their level of marketing activities and spending with business conditions that are likely to be evolving rapidly. The economic forecasts described above suggest that the U.S. economy is poised to generate robust growth in 2021. So marketers need to be preparing now to take advantage of the expected growth.

*On March 6th, the U.S. Senate passed its version of President Biden's $1.9 trillion COVID relief package. The Senate's version differs from the version previously passed by the U.S. House of Representatives. Therefore the House will need to approve the Senate version, and the House is expected to vote on the measure on March 9th. 

Top image courtesy of (CC).

Sunday, February 28, 2021

Emphasize Safe Innovation When Marketing to Millennial B2B Buyers

Numerous research studies have shown that millennials are now playing pivotal roles in B2B purchase decisions. Many marketing industry pundits contend that millennial buyers have distinctive characteristics that require a different approach to marketing and sales.

But many claims about the attributes of millennials are gross oversimplifications of reality. In a 2017 report, the global research firm Ipsos MORI wrote, "Myths and misunderstandings [about millennials] abound, with bad research jumping to general conclusions based on shallow caricatures . . ."

A research report published last November by The B2B Institute and GWI provides a detailed and nuanced view of millennial attitudes and behaviors. Work in BETA:  The Rising B2B Decision Makers ("Work in BETA") was based on surveys of business professionals between the ages of 21 and 64 in ten countries. The report focuses primarily on the attitudes and behaviors of survey respondents between the ages of 21 and 40.

The Work in BETA research produced several insights that have significant implications for B2B marketers. One important group of findings relates to the attitudes of millennial business professionals toward innovation and risk.

The Desire to be Innovative - The Need to Feel Safe

Millennials value innovation highly, and they are also keen to enhance their professional status. These two aspects of the millennial mindset are both evident in the findings of the Work in BETA surveys, and they create a tension that is manifested in how millennials make business decisions.

For example, the surveys asked participants what types of improvement initiatives were important for their company to implement in the coming year. Improving efficiency and productivity, and finding cost savings were the most frequently identified initiatives by respondents of all ages. However, millennial business professionals were far more likely that older survey respondents to identify improving innovation as an important initiative.

Millennials also want to be trendsetters, and they want to be sure they are keeping up with peers and competitors. In the Work in BETA surveys, millennial respondents were more likely than older respondents to agree that "I always like to try new products" and "Having the latest technological products is very important to me."

When survey participants were asked about the reasons that might lead them to consider bringing a new product or service into their company, millennial respondents were more likely than older respondents to say:

  • To keep up with the latest trends
  • Because a competitor is using it
Somewhat surprisingly, the Work in BETA research found that millennial business professionals are more risk averse that is commonly thought. The report states that millennial buyers ". . . spend the most time on research, explore the widest range of vendors, and yet are the most likely to ultimately pick one that they already know."
The inclination of millennial buyers to be risk averse is evident in the sources of information they see as most influential when researching products or services. The Work in BETA surveys asked participants to rate the influence of 16 sources of information used when researching potential purchases. The three sources most frequently described by millennial respondents as very influential were:
  1. Recommendations from experts in my network (53%)
  2. User reviews (51%)
  3. Recommendations from industry analysts (50%)
These survey responses show that millennials are very aware that their decisions or recommendations regarding potential purchases will have an impact on their professional status, and therefore they seek out the opinions of trusted experts and other users to support their decisions.
Implications for Marketers
The implications of this group of findings for B2B marketers are fairly obvious. The actions suggested below will be effective to some extent with potential buyers of any age, but they are particularly important when marketing to millennial buyers.
Emphasize Innovation - To make an impact with millennial buyers, it's vital to position products or services as innovative to the greatest extent possible, and marketers should make innovation a major theme of the brand story. Products or services can be innovative because of their design, architecture, or functionality, or because they will enable users to implement innovative business processes.
Expert Endorsement - As noted earlier, recommendations by trusted experts are very influential for millennial B2B buyers. Therefore, marketers should have a plan for keeping recognized experts in their industry informed about product/service capabilities and new developments. Marketers should also look for opportunities to establish and cultivate relationships with relevant experts.
Social Proof - In the Work in BETA surveys, just over half of the millennial respondents (51%) rated user reviews as a very influential source of information when researching potential purchases. So marketers should encourage customers to share their experiences with the company's products or services and provide an easy-to-use way for customers to give reviews. Case studies can also be an effective way to provide the social proof that millennial buyers want.
Brand Salience - About 30% of the millennial respondents in the Work in BETA surveys said they will only buy from a company they've heard of before. As the report states, millennial buyers are ". . . drawn to names that have a ring of familiarity and an established reputation." Therefore, programs that are designed to raise brand awareness and increase brand salience are important for marketing effectively to millennial buyers.

Image courtesy of Epic Top 10 via Flickr (CC).