Our Most Popular Posts of 2021

This will be my last post of 2021, and I want to thank everyone who has spent some of his or her valuable time reading this blog. My goal for this blog has always been to provide content that readers will find informative, thought-provoking and useful, and I've been immensely gratified by the attention and engagement this blog has received.

I'm planning to make a few changes to this blog in 2022. The plans are mostly final, and I'll be detailing them in my first post of next year. In general, though, I want to diversify the blog content and build it around a few major content categories. For example, I'm planning to include a book review on about a monthly basis.

For the past several years, I've used my last post of the year to share which posts have been most widely read. For this list, I'm only considering posts that were published in 2021. I've ranked the posts based on cumulative total reads, so posts published early in the year have an obvious advantage.

So in case you missed any of them, here are our five most popular posts of 2021: 

1. B2B Highlights From The CMO Survey
2. Marketing to Millennial B2B Buyers - The Rise of Micro-Moments
3. Marketing Week Article Takes Aim At Account-Based Marketing 
4. Research Explores the Value of B2B Thought Leadership
5. [Tie] Digital Transformation Comes of Age:  B2B Findings from "The CMO Survey"
6. [Tie] Use a "Barbell" Strategy for Better B2B Marketing 

Happy holidays to everyone, and best wishes for a great 2022!

Image courtesy of Republic of Korea via Flickr (CC).

One More Key to Better Marketing in 2022

My posts here over the past several weeks have focused on providing information and discussing concepts that can help marketing leaders develop more effective marketing plans for 2022. By now, many marketing leaders will be in the final stages of their planning for next year, but there's one more important point to make.

It's undeniable that the landscape of B2B marketing is constantly changing, and successful marketers must be prepared to adapt their strategies and tactics to fit those changes. But it's equally important that marketers recognize and be prepared to leverage what hasn't changed. Here's a personal anecdote to illustrate the point.

Wisdom from the Past

Early in my business career, I was fortunate to meet and get to know a great B2B salesperson. I met William in 1988 and talked with him frequently until he retired in 1995.

William sold printing presses and other production equipment to commercial printing companies and businesses that had an internal print department. The company William worked for was (and is) highly respected in the printing industry, and William was a very successful salesperson.

William told me that one important key to his success was identifying which companies in his territory were ready to engage in a serious evaluation process that could lead to a buying decision. William also told me that at any given time, only about 10% of the prospects in his territory fit this description.

William realized that he could use his time more effectively and close more deals if he could consistently identify which prospects were ready to begin an active buying process. So he spent a fair amount of his time "taking the pulse" of his prospects.

How did he do this? Well, he devoted two or three days of almost every week to visiting prospects. In most cases, the business owner or another senior manager would be willing to spend thirty minutes or an hour with William even when he showed up unexpectedly.

During these visits, William and his prospect would talk about what was happening in the prospect's business and in the overall printing industry. William's company regularly sponsored research regarding important printing industry trends, and he would share the research reports with his prospects. Most importantly, they would discuss any issues or problems the prospect was having with his or her equipment.

Through these visits, William could get a pretty good idea of which prospects were ready to have a meaningful conversation about buying new equipment. When he identified the "sales-ready" prospects, William would shift to a more focused selling process.

Recognize What Has and Hasn't Changed

I frequently write in this blog about the many ways that B2B marketing and B2B buyers have changed and why these changes require new B2B marketing techniques. So it would be easy for me to devote this post to a discussion of why William's approach won't work in today's environment. But when I think about what William taught me, I'm struck by how many things haven't really changed all that much.

In 2022, as in William's day, B2B companies will need a way to determine which prospects are ready to begin an intentional buying process . . . and which ones aren't.

In 2022, as in William's day, B2B companies will need to be engaged with prospects who aren't ready to begin a buying process . . . because some day many of those prospects will be ready. (Note:  For more on this point, see my recent post explaining why astute B2B marketers don't ignore "out-of-market" prospects.)

In 2022, successful B2B marketing will be more about connecting with potential buyers empathetically, emotionally and rationally, demonstrating value and nurturing buyer confidence, and less about "persuading" unprepared prospects to buy. This, too, was largely true in William's day.

The pace of change in some aspects of B2B marketing over the past two-plus decades has been breathtaking, and those changes have been discussed ad nauseam in the B2B marketing literature and in hundreds of webinars and conference presentations.

But marketing leaders should not lose sight of the reality that many of the core principles of marketing and buyer psychology have changed very little. The tools and techniques that successful marketers will use next year will necessarily be different from those used in the past, but the thoughts and emotions that marketers need to evoke in customers and potential buyers haven't changed much in decades.

So as marketing leaders finalize their plans for 2022, it's vital to consider both what has and what hasn't changed.

Image courtesy of R. Miller via Flickr (CC).

Two Ways To Make Your Case Studies Stand Out

Earlier this month, Michael Brenner published a great post at the Marketing Insider Group blog describing how to create compelling customer case studies. Michael offered several valuable suggestions including:

• Make case studies "relatable" to potential buyers
• Include sufficient detail to make case studies feel real
• Tell the complete story (including challenges encountered and how they were addressed)
• Demonstrate clear results using real numbers
• Include customer quotes and testimonials
• Use compelling visuals 

Customer case studies have long been a staple of the B2B content marketing mix. In the latest content marketing survey by the Content Marketing Institute and MarketingProfs, 61% of the B2B respondents said they are using case studies in their content marketing programs.

However, recent research suggests that the value potential buyers ascribe to case studies has declined. For example, in the 2021 Content Preferences Survey by Demand Gen Report, 35% of the surveyed business buyers identified case studies as one of the most valuable types of content they use when researching potential purchases. That was down from 72% in the 2016 edition of the survey.

Michael Brenner described several ways to improve the quality of customer case studies, and I agree with most everything he wrote. In fact, I discussed some of the same points in a short guide to creating effective case studies that I wrote several years ago. But there are two additional steps that B2B marketers need to take to make their case studies really stand out.

Make the Customer the Hero

I'm frequently asked by clients to review their customer case studies, and unfortunately, what I see far too often is self-promotional "brochureware" disguised as a case study.

The mistake many companies make is to cast themselves, rather than their customer, as the hero of their case studies. The story line of many case studies resembles an old silent movie where the villain ties a helpless damsel (the customer) to railroad tracks, and the hero (the selling company) rides in at the last minute to rescue the damsel in distress from an oncoming train.

A good case study will lead readers to identify with the customer. You want readers to vicariously experience the pain the customer was feeling and the success the customer achieved. In essence, you want readers to finish the case study believing they can achieve comparable success. When you make your company the hero of your case studies, you're asking readers to identify with your company, not the customer.

An outstanding case study will be written from the customer's perspective. It will tell the customer's story and describe what the customer was able to accomplish with, of course, help from your solution. So when you're preparing a case study, you can give your company a strong supporting role, but always let your customer be the star.

Solve the Case Study "Data Problem"

Most potential buyers turn to case studies to help them evaluate potential solutions and validate their purchase decisions. Therefore, a case study needs to contain sufficient detail to describe the customer's business situation and challenges, the experience the customer had with your company's product or service, and the results the customer obtained.

One of the most powerful ways to add persuasive detail to a case study is to include quantitative data when describing the customer's problem or challenge and the results the customer produced by implementing your company's solution. The problem is, this type of data can be difficult to obtain, particularly when a case study isn't prepared until several months after the customer buys and begins using your solution.

When that happens, the marketer developing the case study must construct (or reconstruct) the needed data. Having gone through this process on many occasions, I can attest that it's not an easy or quick task. In addition, it usually requires substantial help from the customer, and you are asking for help when the customer's time and attention has moved on to other pressing issues.

Because of these difficulties, case study developers are often forced to fall back on generic descriptions that simply don't have the impact of real numbers.

While many kinds of B2B companies use case studies in their marketing efforts, they are most frequently used by companies that offer expensive and/or complex products or services, or solutions that will require the buyer to make significant changes in some aspect(s) of their business operations. These are high consideration purchases, and case studies function as a form of "social proof" for potential buyers.

In many cases, these types of companies will acquire new customers at a relatively slow pace, and that can enable marketers to engage in some advance planning that will make it easier to create more compelling case studies. Here are three steps marketers can take to reduce or eliminate the case study "data problem."

Identify Likely Candidates - Meet with your sales team regularly to review recently closed deals and identify new customers that may be good subjects for case studies. A new customer can be a good case study candidate because of the customer's identity (large, well-known companies are always nice) or because the customer will potentially reap outsized benefits by implementing your solution.

Leverage ROI Estimates - Many companies that offer expensive and/or complex solutions create ROI estimates as part of the sales process. When these estimates are well done, they will usually capture a significant about of data about the customer's existing business problem or challenge. So, once you've identified the new customers that look like promising case study candidates, sit down with relevant members of your sales team and review any ROI estimates that were prepared for the customer.

Monitor Customer Success - Identify the quantitative metrics that will best capture the benefits that a new customer is likely to derive by implementing your solution, and begin tracking those metrics at the beginning of the customer relationship. If your company has a "customer success" function, you probably have the mechanisms in place to gather most of this data. Helping customers reap the maximum benefits from your solution is important for reasons that go far beyond creating case studies. So even if you don't have a formal, dedicated customer success function, you still need a process for monitoring how customers are benefiting from your solution.

Image courtesy of Animated Heaven via Flickr (Public Domain).

Empathetic Marketing Will Be Vital in 2022 . . . But It's Not Easy

Empathy has become a hot topic in marketing circles over the past couple of years. The increased interest has been largely driven by the COVID-19 pandemic, which disrupted the personal and professional lives of millions and wreaked havoc on the operations of businesses almost everywhere. Astute marketers quickly recognized that communications with customers and potential buyers would only be effective if they embodied a healthy dose of empathy.

If anything, empathy will become even more essential for effective marketing in 2022. So marketing leaders need to make empathy an important focus of their planning for next year.

Why Empathy Matters

Empathy is generally defined as the ability to understand and vicariously experience the thoughts and feelings of another person. It's the ability to put yourself in the "heart and mind" of someone and "see the world" as that person sees it.

Empathy is essential for effective human communications of all kinds, and it's particularly important in marketing. One of the primary objectives of marketers is to craft messages that will resonate with customers and potential buyers, and empathy is necessary for achieving that goal.

To create messages that are truly empathetic, marketers must perform two sequential tasks:

• First, they must put themselves in the shoes of their target audience(s) and see the world through their eyes. This step is often called perspective-taking.
• And second, marketers must adapt their messages to fit the mental and emotional perspective(s) of their target audience(s).

In short, marketing messages must be tailored based on all relevant aspects of the audience's perspective in order to produce maximum effectiveness.

Why Empathetic Marketing Is Hard

If you think my description of empathetic marketing sounds a bit like "Marketing 101," you'd be right. Understanding potential buyers and leveraging those insights to create compelling marketing messages has been the fundamental job of marketers for decades. But while empathetic marketing isn't new, it remains very difficult to do well.

One reason is that empathetic marketing requires deep insights about potential buyers, and those insights can't be totally derived from the demographic and behavioral data that most marketers rely on. Therefore, marketers are required to make inferences about several important aspects of their audiences' perspectives.

For marketing messages to be empathetic, those inferences must be reasonably accurate, but drawing accurate inferences about potential buyers isn't easy, even under the best conditions. And that brings us to the second reason that empathetic marketing is difficult to do well.

The Problem of Marketer Bias

Remember that empathetic marketing requires marketers to take on the mental and emotional perspective of their target audience. This means that marketers must be able to set aside their own likes, dislikes and feelings and adopt the persona of their audience. As the insightful Mark Ritson recently wrote:

". . . the first rule of marketing is that you are not the market. All your thoughts and immediate responses to things like advertising, price and packaging are not just incorrect - they are dangerous . . . Learning to separate your own instinctive thoughts and feelings from the actual insights from real consumers is, literally, the first thing a trained marketer learns to do well."

Recent research suggests that many marketers have more work to do to master this vital skill. Over the period of 2017-2020, Reach Solutions (the advertising arm of Reach, plc, the largest national and regional news publisher in the UK) published the results of four studies that provide a wealth of fascinating insights about the state of advertising in the UK. I've provided links to the study reports at the end of this post, and I encourage you to read them.

The first study in 2017 found that the relevance of brands and advertising had declined significantly in the UK, and it revealed that the UK advertising industry was out of touch with the mainstream UK population. The next three studies were designed to explore the potential causes of this disconnect.

The Reach research uncovered several stark differences between the people working in the UK advertising industry and the mainstream UK population. For example:

• People between the ages of 18 and 40 represent just 35% of the UK adult population, but they account for 84% of the UK advertising workforce.
• Less than a third of UK adults have received a college degree, but in the UK advertising industry, ". . . a degree is the minimum requirement for entry level roles."
• Forty-four percent of people working in advertising self-identify as being on the left of the political spectrum vs. only 25% of the mainstream UK population.

Just as important, Reach found that the people working in advertising and marketing do not have an above-average aptitude for empathy. Only 30% have high levels of perspective-taking and affective empathy vs. 29% of the mainstream population.

Reach concluded that the people who work in the UK advertising industry have cognitive biases that cause them "to literally see and experience the world differently from the modern mainstream" and that people in the ad industry "are driven by distinctive personality traits that are not shared by the modern mainstream."

The Reach research was conducted exclusively in the UK, but if comparable studies were done in the U.S., I suspect many of the findings would be similar.

The bottom line is, marketers must make a concerted effort to put aside their emotions, beliefs and cognitive biases in order to take the perspective(s) of their target audience(s). That's not easy to do on a consistent basis, and that's why truly empathetic marketing is hard to do well.

Image courtesy of Ian Burt via Flickr (CC).

Reach Solutions Research Reports

When Trust Falls Down (2017) (Note: Reach Solutions was formerly Trinity Mirror Solutions)

Why We Shouldn't Trust Our Gut Instinct (2018)

The Empathy Delusion (2019)

The Aspiration Window (2020)

Define "Buying Scenarios" for Better Marketing in 2022

The predominant view of B2B buying is that it involves expensive and/or complex products or services, large buying groups and long buying cycles. In reality many B2B companies derive substantial revenue from other types of sales. That's why marketing leaders should define relevant buying scenarios as part of their planning for 2022.

Most of the research and other literature relating to B2B marketing has focused on "high consideration" purchases that involve multiple decision makers, complex decision-making processes and lengthy buying cycles.

For example, in a recent survey of sellers by Forrester, 94% of the respondents said they sell to buying groups of three or more individuals, and 38% said they sell to groups of ten or more people.

In the 2020 B2B Buyer Behavior Study by Demand Gen Report, 54% of the survey respondents said four to nine people were involved in their buying decisions, and 11% reported having buying groups of ten or more people. And in the 2021 edition of the study, 55% of the survey respondents said the length of their buying process had increased substantially or somewhat compared to a year earlier.

But high consideration purchases with large buying groups and long buying cycles have never represented all B2B buying. In fact, many B2B purchases are routine, and the buying decision is made quickly by a small number of people, or even by one person.

In a 2021 survey of 401 "industrial buyers" by Thomas, 53% of the respondents said they make buying decisions in less than one month, and another 33% said they make buying decisions in one to three months.

It's likely that substantial dollars are associated with purchases that don't fit the high consideration stereotype. In a major survey of business buyers conducted several years ago by Enquiro, respondents estimated that 50% of their budget was spent on low risk purchases that are made frequently and involve only minimal changes from purchase to purchase.

The reality is, many B2B companies earn revenue from multiple types of purchases, and different buying scenarios call for different marketing strategies and tactics to achieve maximum success. Therefore, B2B marketing leaders need to define the buying scenarios that are relevant for their company and map revenue to those scenarios as part of their planning for 2022.

Elements of a Buying Scenario

A buying scenario is a description of a buying process that includes two major components - the functional attributes of the process itself, and the factors that describe the context in which the buying decision is made. The following diagram depicts the buying scenario model I've used for several years.

The functional attributes of the buying process are shown on the right side of the diagram. They include the size and composition of the buying group, the length of the buying process and the activities performed by the buying group.

The items on the left side of the diagram describe the context in which a buying process is conducted. The common denominator across all these factors is that they describe the level of risk that buyers associate with a prospective purchase.

As the level of perceived risk increases, buyers will take steps to mitigate the risk, and those steps will largely dictate the functional attributes of the buying process they will use. So for example, the buying process used for an expensive product or service, or for a purchase that will require a significant amount of change in the buyers' organization will usually involve more decision makers, include more research activities and take longer to finish.

A Buying Scenario Example

One buying process attribute that often receives too little attention is what I call "Influence of individual buying group members." It's not uncommon to identify a buying scenario in which the official buying group includes several people, but the buying process is actually driven primarily by one member of the group.

The value of identifying this type of buying scenario is illustrated by one of the case studies in The Organic Growth Playbook by Bernard Jaworski and Robert Lurie. This case study involved a company that manufactures commercial heating, ventilation and air conditioning equipment and building management systems.

To improve sales growth, the company conducted research to map the buying processes used for commercial HVAC equipment and building management systems. Among other things, the research identified the steps in the buying processes and the participants in the buying decision.

The research found that the typical buying process involved multiple "buyers" including building owners, financial executives, facilities managers, procurement personnel and facilities engineers. The research also found, however, that the facilities manager was the key buyer in many buying situations. In these scenarios, the facilities manager drove the entire buying process and made the final purchase recommendation. 

Equally important, the research also revealed that many facilities managers were authorized to make purchases up to a set dollar amount from discretionary operating funds without having to use a full-blown capital investment review process.

Based on these research findings, the company made several changes to its go-to-market model. It changed its marketing communications strategy to focus on creating better engagement with facilities managers, and it modified its product line to enable customers to buy equipment and services in modules, which made it possible for facilities managers to make purchases using a more streamlined buying process.

As a result of these changes, the company's sales growth accelerated significantly in the three years after the changes were implemented.

Top image courtesy of Mark Morgan via Flickr (CC).

Economic Forecasters Predict a Strong 2022 . . . Mostly

The success of any marketing plan depends largely on how well it accounts for the business and economic conditions that exist when the plan is executed. Therefore, as marketing leaders develop their plans for 2022, it's vital that they assess what the economic environment is likely to be next year.

This assessment should include an analysis of several macroeconomic indicators and industry-level data. At the macro level, most marketing leaders need to assess expected levels of economic growth, unemployment, consumer spending, business investment and inflation. At the industry level, they should focus on the economic factors that will or may impact demand for their company's products or services.

Several organizations have recently released economic forecasts that cover all or part of 2022, and I'll describe some of these predictions in this post. All of the forecasts discussed here are regularly updated, so marketers should check them often to ensure they are working with the latest economic outlooks.

Real GDP Growth

Most economists and other forecasters now expect the overall U.S. economy to experience above-average growth in 2022. In September, U.S. Federal Reserve Board members and Federal Reserve Bank presidents predicted that U.S. real GDP will increase by 3.8% next year (mean of individual forecasts). In October, The Conference Board also estimated that real GDP will grow 3.8% in 2022. 

Several Wall Street economists tracked by CNBC and Moody's Analytics are predicting GDP growth of 3.9% in 2022 (average of individual forecasts).

To put these forecasts in perspective, many economists believe that the maximum sustainable growth rate of the U.S. economy (measured by real GDP) is 2% - 3%.

Unemployment

The U.S. unemployment rate has fallen dramatically since the pandemic high of 14.7% in April 2020. Last month, it stood at 4.6%, according to the U.S. Bureau of Labor Statistics.

Most economists expect the unemployment rate to continue declining in 2022. For example, the Federal Reserve is now estimating that the average unemployment rate in the fourth quarter of 2022 will be 3.8%. The Conference Board is forecasting that the unemployment rate will fall from 4.8% in the fourth quarter of this year to 4.1% in the second quarter of next year.

Consumer Spending

Consumer sentiment declined sharply in August of this year and remained low in September and October, according to the University of Michigan's Index of Consumer Sentiment. Many economists have attributed this decline in consumer confidence to the summer-early fall surge of COVID-19 cases fueled by the Delta variant. In the October report, the University of Michigan researchers noted that the continuing low level of consumer optimism was primarily due to growing concerns about inflation.

Despite these downbeat readings on consumer confidence, most forecasters expect consumer spending to be strong next year. For example, The Conference Board expects real consumer spending to increase at annualized rates of 4.2% in the first quarter and 3.5% in the second quarter of 2022. And Deloitte predicts that real consumer spending will increase by 3.5% over all of 2022.

Business Investment

Historically, business investment levels have been closely correlated with CEO confidence about future economic and business conditions. This relationship bodes well for business investment in 2022. In the latest McKinsey Global Survey of business executives, 51% of North American respondents said they expect economic conditions in their home country to improve over the next six months.

The Conference Board is estimating that "nonresidential investment" will increase at annual rates of 5.0% in the first quarter and 5.2% in the second quarter of next year. For all of 2022, Deloitte is forecasting that "real fixed business investment" will grow 3.2%.

Inflation

Taken together, these forecasts suggest that the overall U.S. economy will continue to be in full-blown recovery mode in 2022. If these forecasts are accurate, most B2B companies should be operating next year under business conditions that are generally favorable.

But there is one storm cloud on the horizon that has recently become more concerning . . . inflation.

In the twenty-first century, inflation has largely been a non-issue for most U.S. businesses and consumers. From 2000 through 2020, the average annual change in the U.S. Consumer Price Index (CPI) - the rate of inflation - was 2.48%.

In contrast, the CPI increase over the twelve month period from October 2020 through September 2021 was 5.4% (all items, not seasonally adjusted), according to the U.S. Bureau of Labor Statistics. The Federal Reserve has taken the position that this recent inflation will be "transitory," but many economists are now contending that higher inflation will be more persistent than the Federal Reserve expects.

The inflation occurring now is being driven primarily by supply chain disruptions that are affecting a significant (and growing) number of products. These supply disruptions are creating shortages and driving up prices at the producer level. For the twelve month period from October 2020 through September 2021, the U.S. Producer Price Index (final demand, not seasonally adjusted) increased 8.6%, according to the U.S. Bureau of Labor Statistics.

The Federal Reserve maintains (and many economists agree) that inflation will recede toward more "normal" levels in 2022. At present, the major uncertainty is how soon the decline will begin and how far the inflation rate will fall. If inflation remains elevated for a significant part of 2022, the other economic indicators discussed in this post could turn out to be less positive than the latest forecasts suggest.

Image courtesy of Fertile Ground via Flickr (CC).

The "Now-Next-New" Approach to Marketing Resource Allocation

By now, most B2B marketing leaders are well into their planning for 2022, and some of the most important and difficult decisions they will be required to make during the planning process involve the allocation of marketing resources (money, people, time, etc.).

Resource allocation is a challenging part of marketing planning for several reasons. First, regardless of company size, the resources available for marketing are rarely sufficient to enable marketing leaders to do everything they'd like to do. Therefore, choices must be made, and the task for marketing leaders is to deploy their finite resources in ways that will do the most good.

Deciding how to invest limited resources has also become more complex because today's marketing leaders have more options than ever before. The number of marketing channels, techniques and marketing technology solutions has grown dramatically over the past several years.

Resource allocation decisions are further complicated by the need to produce short-term results, while simultaneously laying the foundation for success in the future. Because customer expectations and communication preferences are always evolving, marketing tactics that are highly effective today may be less effective in the future, while tactics and capabilities that aren't important today may become key to future success.

Lastly, resource allocation is challenging because marketing leaders are constantly hearing about new marketing channels, tactics and technologies, all of which are touted as the "next great thing" in marketing.

It's no wonder, therefore, that many marketing leaders say resource allocation is the hardest part of their job.

The 70-20-10 Rule

Fortunately, there's a rule of thumb that marketing leaders can use to address resource allocation challenges. It's called the 70-20-10 rule or sometimes the now-next-new rule, and it's been used for a variety of business purposes. Many companies have used it to manage innovation resources, and Coca Cola reportedly used a version of the rule for years to inform marketing investment decisions.

Here's how the rule works.

The 70 ("Now") - The marketing version of the 70-20-10 rule states that 70% of a company's marketing resources should be devoted to capabilities and programs with a well-established track record of acceptable performance. These will typically include marketing channels, tactics and technologies the company is already using.

The rule doesn't mean that companies should automatically "keep doing what they're already doing." It means marketing leaders should evaluate how well their "bread and butter" tactics are performing and continue investing in those that are delivering acceptable results.

The primary goal of these capabilities and programs is to drive incremental performance improvements in the short term, i.e. the now.

The 20 ("Next") - According to the 70-20-10 rule, 20% of a company's marketing resources should be devoted to emerging marketing channels, tactics and technologies. This category typically includes practices and capabilities that a growing number of  other companies are using successfully and that are or may be nearing mainstream adoption.

Investments in this category frequently relate to capabilities that will become critical to a company's success in the near-term future, or next.

The 10 ("New") - The remaining 10% of marketing resources should be devoted to new channels, tactics and technologies that have just appeared on the scene. These investments enable true marketing innovation to occur, but they are also largely untested activities or capabilities. They may or may not produce significant short-term results, but they have the potential to become productive in the intermediate- or long-term future.

Caveats

As with other rules of thumb, marketing leaders should view the 70-20-10 rule as a guide rather than a precise prescription. The specific percentages in the rule may not be appropriate for every business.

It's also important to recognize that like all business rules of thumb, the 70-20-10 rule is not useful for all resource allocation decisions. For example:

• The rule does not address how resources should be allocated within each major resource category - the 70%, the 20% and the 10%.
• The rule is not designed to guide the allocation of resources between brand building and demand generation activities and programs.
• The rule may not be appropriate if a company's current marketing efforts are significantly underperforming. In those cases, marketing leaders may need to make more drastic changes than the rule would suggest.

Three Keys To More Successful Thought Leadership Marketing In 2022

(If you've decided to add thought leadership marketing in 2022, or if you need to improve your thought leadership program next year, the time to start planning is now. This post describes three steps B2B marketers can take to elevate their thought leadership efforts in 2022.)

It's now abundantly clear that compelling thought leadership content is a vital component of effective marketing for many B2B companies. Numerous studies conducted over the past several years have shown that business buyers are relying more and more on thought leadership content and that it has a substantial impact on purchase decisions. 

The latest significant research on this topic is the 2021 B2B Thought Leadership Impact Study by Edelman and LinkedIn, which was released last month. This study involved a survey of 3,593 global business executives across a wide range of industries and company sizes. The survey was conducted in June and July of this year and included respondents from the United States, Canada, the United Kingdom, Singapore, Australia and India.

The new Edelman/LinkedIn study confirms the importance and value of compelling thought leadership content. For example:

• Fifty-four percent of Decision Makers* and 48% of C-level survey respondents said they spend more than one hour per week reading and reviewing thought leadership content.
• Sixty-three percent of the survey respondents said thought leadership is important in providing proof that a company understands or can solve their business challenges.
• Sixty-five percent of the respondents said they had significantly changed their perception of a company for the better because of a piece of thought leadership content.

It's also clear, however, that many companies need to improve the quality of their thought leadership content. In the Edelman/LinkedIn survey, only 15% of Decision Makers* rated the quality of the thought leadership content they consume as very good or excellent, while 30% rated the quality as mediocre, poor or very poor.

Producing thought leadership content that will earn and keep the attention of potential buyers is not easy. Marketing with thought leadership content has many of the same requirements as other forms of marketing. Marketers need to understand who their target market is and what their company's value propositions are. And just like all other forms of marketing, thought leadership marketing efforts should the aligned with the company's overall strategic objectives and plans.

But thought leadership marketing also has some important characteristics that set it apart from other types of marketing. Here are three steps that B2B marketers should take as they develop their thought leadership plans for 2022.

Set High Standards for Thought Leadership Content

The explosive proliferation of content over the past several years has made it more difficult for marketers to create content that will cut through the noise and earn the attention of potential buyers. Thought leadership content can do just that, but only if it constitutes "real" thought leadership.

Several studies have identified the characteristics that make thought leadership content persuasive. While the exact descriptions used in these studies vary somewhat, the research findings consistently show that three attributes define real thought leadership and distinguish it from other types of marketing content.

Relevant - Real thought leadership content addresses topics and provides insights that are highly relevant for the target audience. Of course, all marketing content should be relevant for its audience. What sets real thought leadership apart is that it addresses topics that can have a major impact on the business or professional success of the target audience.

Novel - Real thought leadership content provides information and insights that are genuinely novel. Merriam-Webster defines novel as "new and not resembling something formerly known or used." So to qualify as real thought leadership, a content resource must provide information or insight that adds something new to the body of knowledge about a topic. In other words, real thought leadership provides the audience information they cannot find elsewhere.

Authoritative - It's important for all types of marketing content to be credible, but thought leadership content must meet a higher standard. Because thought leadership content introduces new and novel ideas, it's essential for content developers to support those ideas with sound and persuasive evidence.

Most B2B marketers have demanding jobs, and the never-ending pressure to "feed the content beast" can make it tempting to take shortcuts when developing thought leadership content. But it's vital that marketers not make compromises regarding these three standards.

Set Realistic Expectations

Producing relevant, novel and authoritative thought leadership content almost always requires a significant amount of original research. Original research actually plays two essential roles in the effectiveness of thought leadership content. First, it is required to uncover the new information and develop the new insights that make thought leadership content novel. And second, original research provides the evidence that makes thought leadership content authoritative.

Original research takes time, and that's especially true when it consists of primary research such as surveys, focus groups or interviews. Therefore, marketers need to set realistic goals for the amount of thought leadership content they can produce during any given period of time.

Map the "Knowledge Landscape"

Once marketers have identified a list of potential topics for thought leadership content, it's important to conduct sufficient research to determine where the "white space," if any, exists regarding those topics. 

Marketers can't determine what topics are appropriate for thought leadership content until they know what subjects have already been addressed. To develop thought leadership content that is truly novel, marketers will usually want to avoid topics that have already been covered. 

There are, however, three notable exceptions to this general rule.

• First, a broad topic may have been already discussed, but specific aspects of the topic may not have been thoroughly covered. These particular aspects can be good subjects for thought leadership content if they are relevant and important to potential customers.
• Second, if a topic has not been addressed for a considerable period of time, it can be appropriate to take a fresh look at that topic.
• And third, if a topic has already been addressed but the existing treatments are flawed or incomplete, that can be an appropriate subject for thought leadership content.

*The Edelman/LinkedIn study defined Decision Makers as company executives ". . . who consume thought leadership and are involved in recommending and/or making final decisions on their company's choice of professional service providers or products."

Image courtesy of Erdonzello via Flickr (Public Domain).

The Persistent Measurement Challenge: B2B Findings From "The CMO Survey"

This post will conclude my discussion of several B2B-specific findings from the August 2021 edition of The CMO Survey. In my earlier posts, I reviewed what the survey revealed about the state of marketing spending and the progress B2B companies have made on the digital transformation of marketing. You can find the two previous posts here and here.

The CMO Survey is a semi-annual survey of senior marketing leaders with for-profit U.S. companies. The survey is directed by Dr. Christine Moorman and sponsored by Duke University's Fuqua School of Business, the American Marketing Association and Deloitte LLP. A more detailed description of the survey is included in the first post in this series.

In this post, I'll focus on what The CMO Survey revealed about how B2B marketers are addressing the perennial challenge of measuring the impact and value of marketing.

Proving the Value of B2B Marketing

It's not news that marketers have been under pressure for the past several years to prove the business value of their activities and programs. The CMO Survey found that these pressures are increasing. Fifty-three percent of the survey respondents with B2B product companies said they are feeling increasing pressure from their CEO to prove the value of marketing. For survey respondents with B2B services companies, the comparable percentage was 68%.

The CMO Survey also addressed what metrics companies are using to measure marketing performance. It asked survey participants to distribute 100 points to reflect the degree to which their company is using seven marketing performance metrics. The following table shows how the respondents with B2B companies distributed the points.

The ultimate objective of most marketing leaders is to be able to measure the impact of marketing activities quantitatively, but this can be challenging, particularly when it comes to measuring the long-term impact of marketing. The CMO Survey asked survey participants which of the following three statements best describes how they demonstrate the short-term and long-term impact of marketing.

• "We prove the impact quantitatively."
• "We have a good qualitative sense of the impact, but not a quantitative impact."
• "We haven't been able to show impact yet."

The following two charts depict how the respondents with B2B product companies and those with B2B services companies answered these questions.

These findings clearly show that measuring the business impact of marketing remains a significant challenge for B2B marketers. Fewer than half of the surveyed B2B marketers said they can measure the short-term impact of marketing quantitatively.

Even fewer B2B marketers can measure the long-term impact of marketing quantitatively - only 27.5% of marketers with B2B product companies, and only 36.4% of marketers with B2B services companies. More concerning, nearly a fifth of marketers with B2B product companies (18.8%), and 13.6% of marketers with B2B services companies cannot show the long-term impact of marketing at all.

Measuring the long-term impact of marketing is a difficult challenge for all marketers, not just B2B marketers. Only about a third of the B2C marketers who responded to The CMO Survey said they can show the long-term impact of their activities quantitatively.

Two years ago, Google published an excellent paper discussing "three grand challenges" relating to the measurement of marketing effectiveness. The authors of the paper acknowledged that perfect solutions for those challenges don't currently exist. In fact, the primary objective of the paper was to focus on the areas where existing methods of measuring marketing effectiveness are "running up against the boundaries of the possible."

I discussed the Google paper in three posts, which you can find here, here and here, and I encourage you to take the time to read the entire paper.

Top image courtesy of theilr via Flickr (CC).

Digital Transformation Comes of Age: B2B Findings from "The CMO Survey"

This is the second of three posts discussing some of the B2B-specific findings of the August 2021 edition of The CMO Survey. I included a detailed description of the survey in my first post, so I won't repeat that description here.

The "Part 1" post discussed the economic outlook of B2B marketers and the state of marketing spending in B2B companies. In this post, I'll discuss what The CMO Survey reveals about the state of digital marketing in B2B companies.

The Digital Transformation of B2B Marketing

The general view is that B2B companies have been somewhat slower to adopt digital marketing than B2C companies. While this view may have been accurate in the past, The CMO Survey provides compelling evidence that many B2B marketers* have now fully embraced digital marketing techniques.

For example, survey respondents with B2B product companies said they are currently spending 50.6% of their total marketing budget on digital marketing activities. And respondents with B2B services companies reported devoting 61.9% of their budget to digital marketing. These percentages are comparable with those reported by survey respondents with B2C companies.

The COVID-19 pandemic accelerated the shift to digital marketing, and this shift is reflected in the growth in spending on digital vs. non-digital marketing. The following chart show how overall marketing spending and spending on digital marketing changed in the twelve months preceding the survey in B2B product companies and B2B services companies.

 

B2B marketers expect their investment in digital marketing to continue growing. The CMO Survey asked participants to estimate how their spending on digital marketing will change in the twelve months following the survey, compared to the twelve months preceding the survey. Respondents with B2B product companies said they expect their spending on digital marketing to increase 12.6%, while respondents with B2B services companies expect an increase of 16.0%.

Digital Marketing Maturity in B2B

The CMO Survey also revealed that B2B companies had made substantial progress on their digital marketing transformation efforts in the twelve months preceding the survey. The survey asked participants to rate their level of digital marketing transformation maturity using one of the following four categories:

• Nascent - "Early steps to design and visualize transformation"
• Emerging - "Build non-integrated digital elements"
• Integrated - "Fully integrate digital investments across company"
• Institutionalized/Established - "Leverage digital investments to drive and evaluate marketing decisions"

The survey asked participants to rate their current level of maturity and also to identify where they stood one year prior to the survey. The following chart shows how marketers with B2B product companies responded to these questions.

As this chart shows, the percentage of B2B product companies at the "lowest" maturity level - nascent - declined significantly over the twelve months preceding the survey, while the percentages of companies at the three higher maturity levels all increased.

The pattern is the same for B2B services companies, as the following chart shows.

Collectively, these findings show that B2B marketers are strongly committed to digital marketing strategies and tactics and are making significant progress on the path to digital marketing transformation.

In my next post, I'll discuss what The CMO Survey reveals about how B2B marketers are dealing with the perennial challenge of measuring marketing performance.

*The CMO Survey does not state that it uses a representative sample of B2B marketing leaders. Therefore, the survey findings cannot be projected to the entire population.

Top image courtesy of Dominic Smith (Cerillion) via Flickr (CC).

B2B Findings From "The CMO Survey" - Part 1

The findings of the August 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 LLP.

This is the first of three posts that will discuss some of the B2B-specific findings from The CMO Survey. The August survey results are based on responses from 282 senior marketing leaders at for-profit companies based in the United States. Over two-thirds of the respondents (69.8%) were affiliated with B2B companies, and 94.1% were VP level or above. The survey was in the field August 4-25, 2021.

The CMO Survey is conducted semi-annually, and it provides a wealth of information. Dr. Moorman and her colleagues typically produce three reports for each edition of the survey.

• "U.S. Highlights and Insights Report" - This is a relatively brief and graphically-rich report that provides mostly top-level results, along with an analysis of those results and major marketing trends.
• "Topline Report" - This report provides response data at the aggregate level for all survey questions.
• "U.S. Firm and Industry Breakout Report" - This is the most detailed report. It provides response data by four primary economic sectors (B2B product companies, B2B services companies, B2C product companies and B2C services companies), fifteen industry sectors, company size and volume of internet sales. This report is typically quite lengthy, but it provides the most granular view of the survey data. 

The CMO Survey does not state that it uses a representative sample of senior marketing leaders at U.S. for-profit companies. Therefore, the survey findings cannot be projected to the entire population.

In this series of posts, I'll be discussing the responses of B2B marketers exclusively unless otherwise indicated. The percentages and other numerical values in these posts are the mean of survey responses, also unless otherwise indicated.

Marketer Optimism Reaches Pre-Pandemic Levels

On average, the optimism of B2B marketers has returned to pre-pandemic levels. The survey asked participants to rate their level of optimism regarding the overall US economy on a 100-point scale, with "0" being least optimistic, and "100" being most optimistic. The following chart shows how B2B marketers rated their optimism in the five surveys conducted since August 2019.

It also appears, however, that marketers' optimism may be moderating. The August survey asked participants if they were more or less optimistic about the overall US economy compared to the previous quarter. The following table shows how B2B marketers responded.

Marketers' optimism appears to be reflecting the trajectory of overall economic growth in the US. According to the Bureau of Economic Analysis, US real GDP grew at an annualized rate of 6.3% in the first quarter of 2021 and at an annualized rate of 6.7% in the second quarter.

The Conference Board is currently forecasting that real GDP will grow at an annualized rate of 5.5% in the third quarter and by 3.9% in the fourth quarter. For the entire year of 2021, The Conference Board expects real GDP growth to grow by 5.9%, slowing to 3.8% in 2022.

The State of Marketing Spending

The CMO Survey includes several questions pertaining to the state of marketing budgets and spending that usually receive a good bit of attention. The survey asked participants to estimate what percentage of their company's total revenue is represented by marketing expenses. The following chart shows how marketers from B2B product companies and B2B services companies responded to this question in the surveys conducted since August 2019.

In a recent post, I discussed some of the findings of Gartner's CMO Spend Survey, 2021. The "headline" finding of that research pointed to a significant decline in marketing budgets as a percentage of company revenue. Gartner found that the mean percentage of total company revenue allocated to marketing in 2021 is 6.4%, down from 11% in 2020. The mean percentage for B2B companies represented in the Gartner survey was 6.2%.

The above chart also shows a decline in marketing spending as a percentage of company revenue in the August 2021 edition of The CMO Survey, compared to the previous four surveys. The decline occurred in both B2B product companies and B2B services companies.

In its survey report, Gartner treated the decline in the proportion of marketing budgets to company revenue as evidence that marketing budgets have been cut - or at least that they haven't recovered from cuts that occurred last year. I don't believe the survey data supports that conclusion.

As a ratio metric, the percentage value is obviously affected by both components of the ratio. A company's marketing budget may have been increased in absolute terms, but the proportion would still fall if company revenues grew enough in the same time frame.

The CMO Survey provides a more direct measure of changes in marketing spending. The survey asked participants to estimate by what percent their overall marketing spending changed in the twelve months preceding the survey. The following table shows how B2B marketers answered this question in the five surveys conducted since August 2019.

This table clearly shows that marketing spending in the survey respondents' companies slowed or declined in the June 2020 and February 2021 editions of the survey. However, marketers in both B2B product companies and B2B services companies reported increases in spending in the latest survey.

My view is that this is one of those issues where averages aren't particularly meaningful. In fact, The CMO Survey found that changes in marketing spending varied substantially across industries. For example, in the August 2021 edition of the survey, respondents with banking, finance and insurance companies reported a mean increase of 20.2% over the preceding twelve months, while respondents with manufacturing companies reported a mean increase of only 3.6%

In my next post, I'll discuss more of the B2B findings from the August edition of The CMO Survey.

Top image source:  The CMO Survey

Why Marketers Shouldn't Ignore "Out-of-Market" Prospects

If you've ever visited California wine country, you may have fantasized about owning a vineyard. Acres of trellised grapevines laid out in neat rows create an idyllic landscape, like the one shown in the above photograph.

Of course, the reality is that operating a vineyard is hard work. And some of that work must be done long before the vineyard owner receives a payoff.

For example, it typically takes three years for newly-planted grapevines to produce a useable harvest. During those three years, the vineyard owner must install a trellis system to support the vines as they grow, and young vines must be regularly pruned and "trained" to grow correctly. They must also be judiciously watered, occasionally fertilized and constantly protected from harmful insects. And all of this work must be done before the vines produce the first dollar of revenue for the vineyard owner.

Some of you may be wondering what this brief foray into grape horticulture and vineyard management has to do with B2B marketing. Quite a bit actually, particularly for B2B marketing leaders who need to develop marketing strategies and programs that will produce sustained short-term and long-term revenue growth.

To generate maximum revenue growth over an extended period of time, marketing leaders must design programs that will maximize performance in the present, while simultaneously investing in programs that will lay the foundation for success in the future.

The Challenge of Out-of-Market Prospects

So what does this mean in practice? The starting point is a broad definition of the market. As I wrote in a recent post, identifying all potential growth opportunities is far less likely to occur when marketing and other business leaders fail to take an expansive view of their market.

In B2B, a company's "market" should be defined to include all organizations located in the company's service area that could derive substantial benefits and earn an attractive ROI by purchasing and using the company's product or service. When the market is defined in this way - that is, by customer "fit" - it will include almost all of the prospective customers the company can potentially earn revenue from.

At any given point in time, however, most of the organizations comprising a company's market are not considering the purchase of a solution like the one the company offers. Many veteran marketing and sales professionals call this circumstance the "95-5" rule, meaning that at any point in time, 95% of the company's potential customers are "out-of-market," while only 5% are actively "in-market."*

Based on our definition of the market, out-of-market organizations are a good fit for the company's product or service, but these prospects are not ready to begin a buying process. And it's unlikely that typical demand generation programs will persuade them to change their position. 

However, many potential customers that are out-of-market in the present are likely to be in-market at some point in the future. So, out-of-market prospects are like those young grapevines in a vineyard. They aren't productive today, but if handled properly, they can be productive in the future.

The issue for marketing leaders is what marketing programs, if any, should be used with out-of-market prospects. There are currently two major schools of thought regarding this issue.

In This Corner . . .

Some marketing practitioners, agencies and consultants argue that marketers should use intent data and predictive analytics to determine when an organization is likely to be in-market, and then focus marketing efforts on those prospects. Not surprisingly, this approach has been loudly advocated by firms that sell intent data and/or predictive analytics technologies.

Most proponents of this approach don't explicitly say that marketers should ignore out-of-market prospects, but some come pretty close. Consider, for example, this blog post passage from a firm operating in the intent data/predictive analytics space:

"To avoid wasting time and money pursuing prospects that either already just bought the product from your competitor or are not serious about buying yet, your team should focus on the right people, targeting them at the right time by leveraging intent data, which will help you understand total active demand. Instead of a broad market of generic buyer personas, it enables you to find specific accounts that are active in your market."

And In This Corner . . .

Other marketing practitioners, agencies and consultants contend that companies should reach out to all organizations that are a good fit for the company's product or service regardless of whether those prospects are currently in-market. The proponents of this approach typically stress the importance of brand building to long-term revenue growth.

My Take

I'm not aware of any rigorous research study that compares the effectiveness of these two approaches. The analysis performed by Les Binet and Peter Field in 2019 comes close, but Binet and Field expressly acknowledged that their findings should be viewed as tentative.**

Despite the limited amount of direct evidence, I contend that it would be risky for most B2B companies to ignore prospects that don't make the in-market cut. Such an approach is dangerous because it fails to account for an important aspect of how business buyers make purchase decisions.

The conventional view is that a B2B buying process begins when a company's leaders or managers recognize a need or a problem and decide to do something about it. These "buyers" then gather information about the need or problem, evaluate possible solutions and may or may not decide to buy a product or service to address the need or problem. So the traditional view of B2B buying is that information gathering, learning and evaluation all occur after an intentional buying process is underway.

But business decision makers rarely begin a buying process with a clean slate. Every day, they are forming impressions of companies, brands and products from touch points like ads, content resources, news reports and conversations with business colleagues and friends. 

When something triggers an intentional buying process, these accumulated impressions exert significant influence on the purchase decision. For example, a 2020 study by The B2B Institute and GWI found that millennial business 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."

If marketers focus their efforts solely on in-market prospects, they'll be abandoning the opportunity to influence the perceptions and preferences of many future potential buyers and likely missing out on future growth opportunities. Such an approach would be like a vineyard owner failing to properly nurture the young grapevines that will drive the vineyard's future revenues.

* The percentages in the 95-5 rule are not meant to be taken literally. The actual percentages of out-of-market vs. in-market prospects will vary from industry to industry and company to company. What makes the rule valid in a general sense is that companies almost always have far more out-of-market prospects than in-market prospects.

** It would be very hard to design and conduct a study of this issue that is scientifically sound because of the difficulty of controlling for all the variables that could affect the research outcomes and because the study would need to be conducted over an extended period of time.

Image courtesy of Aaron Logan via Flickr (CC). 

What CEO's Really Think of CMO's

A recent survey by the Boathouse Group, a marketing agency/consulting firm based in Boston, should serve as a wake-up call for B2B marketing leaders. The 2021 CMO Study was based on a survey of 150 Fortune 3000 CEO's from 13 industries. Survey respondents represented companies with annual revenue ranging from $250 million to more than $1 billion. The survey was in the field May 26 - June 8, 2021.

The researchers had two objectives for this survey. They wanted to capture the perspectives of CEO's on the role and importance of the CMO position, and they wanted to explore other CEO perceptions that might help explain the short average tenure of chief marketing officers. The survey report noted that average CMO tenure (in 2020) was at the lowest point in the past decade.*

Like other research I've recently discussed, the Boathouse survey found that driving revenue growth has become the top marketing priority in the eyes of many CEO's. A significant plurality of the survey respondents (47%) said the most critical role of the CMO is to "grow the business." Developing the brand came in a distant second at 29%.

The Boathouse survey contains both good news and bad news for CMO's. First, the good news.

The Good News

The CEO's surveyed by Boathouse expressed several positive sentiments regarding CMO's. An overwhelming majority (86%) said CMO's have the power and credibility to influence key decisions made by C-level executives. Sixty-three percent of the survey respondents described CMO's as "performance-minded," and 58% said CMO's understand the business and shareholder goals of the company.

Now For the Bad News

Unfortunately, the Boathouse survey also revealed that many CEO's have several negative perceptions of CMO's - or at least the CMO's they've worked with.

For example, only 34% of the surveyed CEO's said they have great confidence in CMO's. And 80% of the survey respondents said the short-term tenure of CMO's was a sign of CMO failure. When survey participants were asked why CMO's are failing, 38% of the respondents said it was because CMO's have the wrong skill set for the changing marketing environment, and 21% said it was because CMO's have difficulty measuring the business results of marketing programs.

These results are similar to the findings of a 2021 survey of senior management executives conducted by the CMO Council. In that survey, only 17% of the respondents said they were extremely confident in marketing's ability to lead a growth recovery in 2021, and another 52% said they were just moderately confident.

The Boathouse survey also contained some fairly depressing findings about the level of trust CEO's have in CMO's, with only 32% of the surveyed CEO's saying they trust CMO's. Some of the CEO perceptions described in the survey report are visceral. For example:

• 56% of the respondents said CMO's are committed to themselves, but only 44% said they are committed to the CEO/board.
• Only 56% of the respondents said the CMO supports the long-term vision of the CEO, and only 10% said the CMO puts the CEO's needs before their own.

Lastly, when Boathouse asked survey participants to identify the most trusted and the most valuable member of their leadership team, CMO's didn't fare very well. The following table shows how the surveyed CEO's responded to these two questions.

My Take

Some of the findings in the Boathouse survey seem to be very contradictory. For example, the surveyed CEO's said CMO's have the credibility to influence key C-suite decisions, but only about a third of the respondents said they trust CMO's. It's as if the survey respondents were answering some questions based on what they believe CMO's should be or could be, while answering others based on what they think most CMO's actually are.

*The survey report contains a somewhat confusing chart that depicts average and median CMO tenure from 2011 through 2020. The chart appears to be based on data from the 2021 edition of the CMO Tenure Study by Spencer Stuart. You can review the Spencer Stuart data here.

Top Image Source:  Boathouse Group Inc.