The Benefits and Limitations of Look-Alike Modeling

Demand Gen Report recently published a white paper describing the benefits of using look-alike modeling powered by artificial intelligence (AI) to improve lead generation performance. The white paper argues that B2B marketers can use "AI-fueled" look-alike modeling to get more qualified leads that convert at higher rates.

The principles underlying look-alike modeling aren't new. For years, astute B2B marketers have been identifying important attributes of their best existing customers and using those attributes to create a profile of their "ideal prospect." Then, they would use this ideal prospect profile to identify target audiences for outbound lead generation programs and otherwise guide lead generation efforts.

The current incarnation of look-alike modeling does essentially the same thing, but in a more sophisticated way using AI-powered data analytics.

Several technology providers now offer solutions that include or support look-alike modeling, and most of these solutions take similar approaches to the look-alike modeling process.

• They extract data regarding a company's existing customers from the company's internal technology systems including, but not necessarily limited to, the CRM and marketing automation solutions.
• Most solution providers have developed or obtained access to extensive databases regarding business organizations. The modeling solution will combine the company's internal customer data with any additional data regarding these customers in the provider's database. This enables the solution to create a more detailed picture of the attributes of the company's existing customers.
• The modeling solution then uses an algorithm to analyze the combination of internal and external customer data to identify the attributes that the company's existing customers have in common. The result of this analysis is usually called a customer data model.
• The solution then runs the company's customer data model against the provider's database of businesses to identify companies that resemble the model.

The major advantage of AI-powered look-alike modeling is that it incorporates far more data points than humans can realistically use when the process is done manually. Therefore, AI-powered modeling enables marketers to build a richer and deeper customer data model, and it does a better job of identifying companies that are likely to be good prospects.

Look-alike modeling can be an effective tool for improving B2B demand generation performance, but like any business tool or methodology, it has some limitations.

First, for look-alike modeling to be effective, a company needs to have enough existing customers to build a customer data model that's reliably predictive. One provider of look-alike modeling has indicated that a company needs at least 500 existing customers to build a reliable model. While 500 may not the the absolute minimum, effective look-alike modeling does require a company to have a substantial number of existing customers, and a start-up or young business may not be able to meet this requirement.

Second, look-alike modeling can be less effective when a company is marketing new products or services. If a new product or service appeals to a different type of customer than the company's other products or services, a customer data model based on the company's existing customers may not identify the right prospects for the new product or service.

The important point here is that look-alike modeling is a powerful tool for improving demand generation performance, particularly when it's enhanced with artificial intelligence. But B2B marketers should also remember that like any business methodology, look-alike modeling has a few important limitations.

Image Source:  Flickr.com

What's Required for Effective Demand Generation

CSO Insights (a division of Miller Heiman Group) recently published its 2018-2019 Sales Performance Report. This report describes the findings of the 2018-2019 sales performance survey, which generated responses from nearly 900 global sales leaders.

Sixty-one percent of the respondents were either executive managers or senior sales managers, and respondents represented 23 industries. Half of the respondents (50.8%) were located in North America, and the balance were based in EMEA, APAC, and Latin America.

The CSO Insights study focused specifically on the performance of the sales function, but the survey findings provide valuable insights for everyone involved with B2B demand generation. That's because many of the factors that characterize successful sales performance also apply to the other business functions that play important roles in demand generation.

The Defining Attributes of High Performance

CSO Insights identified three defining attributes of high-performing sales organizations. The study found that respondents from top-performing organizations were more likely than other respondents:

• To say their company has a customer-centric culture
• To report they have a high level of alignment between their sales process and customers' decision-making journey
• To say they are confident in the ability of their sales reps to provide valuable insights and perspectives to potential buyers

These characteristics can be extended and applied to the other business functions involved in demand generation. For example, a marketing organization that excels at demand generation is more likely to:

• Be part of a company with a customer-centric culture
• Align its programs and messaging with the customer buying journey
• Create and use content that provides valuable insights to potential buyers

The authors of the survey report acknowledge this point when they write:  "Looking at all three of these characteristics together shows that . . . [high-performing] organizations are embracing 'customer experience' as a broad concept, of which sales process and salespeople are just one piece."

Lead Generation Needs Significant Improvement

The CSO Insights research highlights several areas where better cross-functional collaboration is needed to improve demand generation performance. One of those areas is lead generation. Survey respondents identified improving lead generation as one of their four primary objectives for the coming 12 months, and they also identified the inability to generate enough qualified leads as the second most significant barrier to achieving demand generation success.

Unfortunately, the CSO Insights report reveals a distressing lack of alignment between sales and marketing when it comes to lead generation. For example, only 29.5% of the survey respondents said their sales and marketing teams have an agreed upon, formal definition of who is a legitimate sales lead. And the level of lead definition alignment between sales and marketing has actually gotten worse since 2014, as the following chart shows.

The low level of sales-marketing alignment also shows up in lead nurturing. Only 33.9% of the survey respondents said their sales and marketing teams have an agreed upon, formal process for nurturing leads. Another 30.8% said they have an informal process - whatever that means.

The CSO Insights research provides more compelling evidence that effective B2B demand generation requires a coordinated effort by both sales and marketing, and that sales-marketing alignment is still very much a work-in-progress.

Top Image Source:  CSO Insights (a Division of Miller Heiman Group).

Two Key Attributes of Effective Lead Response Practices

First impressions matter a great deal in B2B marketing. The early interactions between a potential buyer and your company can make or break the relationship. So, how you respond to newly-identified leads is vitally important to the success of your demand generation efforts, probably only slightly less important than the quality of the content you produce.

In the course of my work, I consume a great deal of content. I download a lot of content resources, and I attend a lot of webinars. In most cases, I'm required to register to gain access to these resources, which means that I also receive a lot of follow-up e-mails and telephone calls. This has allowed me to experience lead response practices from a buyer's perspective, and from what I've seen, many company have significant room for improvement.

Lead Responses Must Be Appropriate

There are two key attributes of an effective response to a newly-identified lead. First, the response must be appropriate given the potential buyer's expressed or implied level of interest. For example, if a potential buyer signals that he or she wants to communicate with the company, it's entirely appropriate to reach out to the buyer via a telephone call.

On the other hand, if a potential buyer simply accesses a content resource, this doesn't necessarily signal that he or she is ready to have an in-person conversation with a company representative. Companies make a mistake when they respond too aggressively to this type of buyer behavior. In this circumstance, an e-mail offering access to other relevant content resources is likely to be the most effective way to entice the potential buyer to continue his or her engagement with the company.

Lead Responses Should Be Informed

The second key attribute of an effective lead response is that it is informed. By this I mean that the person making the response should take the time to perform a minimal amount of research regarding the potential buyer. When I receive follow-up contacts, what frustrates me most is that it's usually clear that the person making the contact has done nothing to learn about me, or my business, or why I may have been interested in a content resource.

In almost every case, if the company's representative had spent five or ten minutes reviewing my LinkedIn profile and scanning the articles I've published at LinkedIn, he or she would have been able to craft a response that would have been more compelling for me and more valuable for the company.

Some companies may serve such broad markets and generate so many new leads that it's impractical to spend even ten or fifteen minutes researching each new lead. But that's not the case for most B2B companies, and a modest amount of research can dramatically improve the effectiveness of lead responses because it enables you to personalize your responses in a meaningful way.

Illustration courtesy of Eric Snopel via Flickr CC.

Two Key Promises of Predictive Marketing

As a B2B marketer, imagine how much more effective your marketing efforts would be if you had the following insights:

• What if you could identify businesses that are likely to have a strong interest in your company's products or services before you market to those businesses?
• What if you could reliably identify which of your current prospects have a strong propensity to buy your company's products or services and thus are ready to have a meaningful conversation with one of your sales reps?

These are two of the most significant promises of predictive marketing solutions. During 2015, predictive marketing was one of the hot technologies in B2B marketing, and it appears that the demand for predictive marketing solutions is poised to grow rapidly. 

Last fall, Everstring published the results of a survey of marketers regarding the use of various marketing technologies. Twenty-five percent of the survey respondents said they were currently using some predictive tools, and another 47% said they were aware of predictive marketing and were investigating how to use it. Two studies by Forrester Consulting - available here and here - reported even higher usage rates of predictive marketing analytics among B2B companies.

Predictive marketing solutions have the potential to dramatically improve the productivity of B2B demand generation by enabling companies to target their marketing and sales activities more precisely. Predictive analytics can be used to address a wide range of business issues, but the two uses that are receiving most of the attention in the B2B marketing world are new prospect acquisition and prospect/lead scoring.

Most predictive marketing solutions employ the same basic approach for both of these use cases. They take data regarding your company's existing customers from your CRM and marketing automation systems and combine that information with external data about those customers - from around the web, social media, and other third-party data sources - to construct a customer data model that describes the attributes and behaviors of organizations that are likely to have a strong interest in your company's products or services.

When predictive marketing is used to identify new prospects, the solution provider will run your customer data model against its (the solution provider's) database of businesses. The result is a list of prospects that resemble - to a greater or lesser extent - your existing customers. The inference is that prospects that closely resemble your existing customers  are likely to be interested in your company's products or services. With this insight, you can target your marketing programs more precisely and use your marketing resources where they are more likely to be effective.

When predictive marketing is used for prospect/lead scoring, the solution provider applies your customer data model to the prospects already in your marketing database and generates a score for each prospect based on how closely the prospect resembles your existing customers. This enables you to qualify prospects or leads using much more data than is typically available in traditional lead scoring systems. In theory, therefore, a predictive marketing solution qualifies prospects and leads more accurately, and it can potentially identify buying signals that are almost impossible to find using traditional lead scoring techniques.

The early indications are that predictive marketing solutions will drive significant business benefits. For example, in a 2015 study by Forrester Consulting, 72% of respondents whose companies were using predictive marketing grew revenues by 10% or more during 2014. Only 33% of non-users achieved the same rate of revenue growth.

While its clear that predictive marketing solutions can provide significant benefits in the right circumstances, there are a few caveats that marketers should keep in mind. For example:

• These solutions rely heavily on data from a company's CRM and marketing automation systems to construct the customer data model. So, if your company is a fairly mature user of CRM and marketing automation, and if your systems contain a significant amount of usable data, predictive marketing could be a sound investment. On the other hand, if you don't have enough reliable CRM/marketing automation data to work with, the value of predictive marketing will be more problematic.
• It's also important to recognize that you need a reasonable number of existing customers to create a customer data model that is reliable and predictive. Put simply, your customer data model will be richer and more reliable if it is based on 500 customers rather than on 50 customers.
• Predictive marketing solutions are not outrageously expensive, but they can require a significant investment. The cost of predictive marketing solutions varies greatly depending on the features of the solution and a variety of other factors. Pricing can always change, of course, but at present, it appears that the starting price for most predictive marketing solutions ranges from around $15,000 per year to over $100,000 per year.

Illustration courtesy of Louise McLaren via Flickr CC.

The Most Compelling Reason to Use Account-Based Marketing

By now, just about everyone involved in B2B marketing is aware of the hype surrounding account-based marketing (ABM). Many thought leaders argue that ABM is the "next big thing" in B2B marketing, and recent research confirms that the enthusiasm for account-based marketing is strong and growing.

• In the 2015 State of Account Based Marketing Survey by SiriusDecisions, 92% of respondents said that ABM is "extremely" or "very" important to their overall marketing efforts.
• In Demand Metric's 2015 Account-Based Marketing Adoption study, 71% of survey respondents said they are interested in adopting ABM, are testing it, or are already using it.

According to users, account-based marketing provides several important benefits. In the Demand Metric study, the four top benefits identified by ABM users were:

1. Increased engagement with target accounts (83% of users)
2. Better sales/marketing alignment (69%)
3. Better qualified prospects (66%)
4. Greater understanding of program performance (59%)

These benefits are important, but at a more basic level, the most significant potential benefit of ABM is a more productive B2B demand generation system. As Demand Metric wrote, "It [ABM] allows marketing and sales to target the accounts they value most, including prospects, current customers and partners. This precise approach to targeting helps bring the right accounts to the table, making the marketing and sales process more efficient." (Emphasis in original)

There's no doubt that demand generation productivity needs improvement. Several research studies have found that the demand generation system in many B2B companies is horribly inefficient. Specifically, these studies have shown that the overall lead-to-revenue (LTR) conversion rate in the average B2B company is extremely low. And even top-performing B2B companies don't have LTR conversion rates that are all that impressive. The following table shows the results of these research studies.

A well-designed and well-executed ABM program should improve demand generation productivity by significantly increasing a company's LTR conversion rate. In the Demand Metric research, 43% of experienced ABM users said that account-based marketing had a positive impact on all stages of the demand generation funnel.

To illustrate how ABM can impact the LTR conversion rate, take a look at the following table. This table shows the lead stage conversion rates published by SiriusDecisions for average and best-in-class B2B companies. Notice that the lowest rate in both cases is for the conversion from inquiry to marketing qualified lead (MQL).

When a company implements account-based marketing, it targets most of its marketing programs at relevant individuals who are affiliated with specified accounts. Therefore, virtually all of the responses or "inquiries" produced by those programs will, by definition, be marketing qualified leads. As a result, the inquiry to MQL conversion rate will be extremely high.

If an average B2B company increases its inquiry to MQL conversion rate to 80%, its overall LTR conversion rate will increase from 0.29% to 5.3%, even if all of the other intermediate conversion rates remain unchanged. Under the same circumstances, a best-in-class company would improve its LTR conversion rate from 1.42% to 10.2%. These increases represent an 18X improvement in demand generation productivity for an average B2B company and a 7X improvement for a best-in-class company.

For the past several years, thought leaders have argued that B2B marketers should focus more on lead quality and less on lead quantity. This change in focus is a natural consequence of using account-based marketing, and the resulting productivity improvements are impressive.

Top illustration courtesy of Richard Matthews via Flickr CC.

Why You Need to Ditch Marketing Campaigns in 2016

Marketers have long used campaigns as the basis for planning marketing efforts. And for decades, the campaign paradigm worked reasonably well. Today, however, rising buyer expectations and changing buyer communications preferences require new kinds of marketing communications methods that don't fit the traditional campaign construct. As a result, several marketing thought leaders now contend that the campaign paradigm is obsolete. For example, Forrester Consulting recently wrote:

". . . most companies are stuck in an old campaign mindset and a corporate reality where each of their touchpoints is typically the domain of separate channel silos . . . The overall result is often messaging, execution, and delivery strategies that are fragmented across touchpoints and out of context to the consumer." (The Rise of Marketing Orchestration)

The reality is, it's time to ditch the campaign model and replace it with a planning framework that enables marketers to better align their activities with both buyer realities and critical business objectives. Therefore, the primary output of your planning process should be a marketing communications plan that embodies a cohesive, balanced, and value-driven marketing effort.

The diagram below shows the major elements of a marketing communications plan, which is similar in several ways to the B-to-B Marketing Campaign Framework developed by SiriusDecisions.

Value Themes

In a marketing communications plan, value themes replace campaigns as the primary organizing principle. Value themes are derived directly from your value propositions, but a value theme may encompass more than one value proposition. For example, your product or service may enable your customers to reduce three distinct kinds of costs, and therefore you've developed three value propositions to reflect these benefits. In a marketing communications plan, these three value propositions might well be embodied in one "cost reduction" value theme.

Value themes are designed to be used for a relatively long period of time, usually at least a year, and they act as the primary guide for developing your marketing messages and content resources. Most B2B companies will have between one and four value themes for each product or product family and target market combination.

Marketing Program Families

Marketers in B2B companies are tasked to achieve several marketing objectives, and each of these objectives demands a distinctive set of marketing activities. In a marketing communications plan, these activity sets are called marketing programs, and most B2B companies need four types of marketing programs:

• Reputation-building programs are primarily designed to build brand awareness and credibility with potential buyers in the target market.
• Demand creation programs are primarily designed to acquire new sales leads and nurture those leads until they are ready to engage with sales reps.
• Sales enablement programs are primarily designed to provide content and intelligence that supports the efforts of the sales force.
• Retention & growth programs are primarily designed to sustain and enhance relationships with existing customers, improve customer retention, and increase "share of wallet."

Marketing Tactics

Your marketing communications plan will also include the specific tactics that you will use to execute each marketing program. The important point here is that most tactics can be used in all four types of marketing programs, although some tactics will play a more significant role in some types of programs than others.

Market Intelligence/Performance Measurement

The final component of a marketing communications plan is a system for (a) gathering and analyzing information about buyer needs, preferences, and behaviors, and (b) measuring the effectiveness of your marketing efforts. In today's B2B marketing environment, no marketing communications plan is complete without a system for leveraging data to better understand potential buyers and for measuring marketing performance.

Marketing campaigns are no longer the best way to play and organize marketing efforts. For more effective marketing in 2016, think instead about developing a comprehensive, value-driven marketing communications plan.

Top image courtesy of InfoWire.dk via Flickr CC.

What's Old and New in Account-Based Marketing

If you're involved in B2B marketing, you're probably aware of the hype surrounding account-based marketing (ABM). Some industry thought leaders are touting ABM as the "next big thing" in B2B marketing, and research confirms that the enthusiasm for account-based marketing is growing. For example, in the 2015 State of Account-Based Marketing Survey by SiriusDecisions:

• 92% of respondents said that account-based marketing is "extremely" or "very" important to their overall marketing efforts.
• 61% of respondents whose companies had implemented ABM said they plan to invest in technology to support their ABM efforts over the next twelve months.

Most of the hype about account-based marketing tends to portray ABM as a "new" type of marketing. In reality, account-based marketing is an amalgamation of old and new marketing principles and methods, and a set of relatively new, technology-enabled marketing techniques.

What's "Old" in Account-Based Marketing

The defining characteristic of account-based marketing is that it focuses on a group of identified or named accounts. ABM programs or campaigns are directed at relevant individuals (decision makers or influencers) who are affiliated with those named customers or prospects. This aspect of account-based marketing is by no means new.

Any business or marketing strategy worth its salt will include a definition of the company's target market, and this has been true for decades. In addition, for years, many B2B companies have been using direct marketing methods that focus on specific individuals who are affiliated with the business organizations that are in the company's defined target market.

So, in short, some of the fundamental principles and methods of ABM aren't new, but in fact, they embody techniques that many B2B companies have been using for years. However, this doesn't mean that the current incarnation of account-based marketing is simply a rehash of "old" marketing methods and practices.

What's "New" in Account-Based Marketing

Two characteristics distinguish the current practice of ABM from the "account-based" marketing campaigns and programs of the past. First, we now have technology tools that are enabling several new ABM techniques. For example, we now have the ability to target online advertisements and customize website content for individual named accounts or for specified types of accounts.

The second defining attribute of current ABM efforts is the level of coordination among marketing, sales, and business development activities. Today's most effective ABM programs typically combine content-based interactions and human-to-human interactions to create an integrated communications plan for each target account. In companies with the most successful ABM programs, marketers, sales reps, and business development reps work jointly to develop and then execute the integrated communications effort. This characteristic has caused some ABM thought leaders to argue that account-based marketing should really be called something like strategic account development because it encompasses much more than marketing.

ABM can be a powerful approach to demand generation for many B2B companies, and new technology tools can certainly enhance the effectiveness of ABM efforts. But ABM isn't entirely new, and successful ABM programs will incorporate many long-standing marketing principles and techniques.

Image courtesy of Cliff via Flickr CC.

New Research on B2B Content Marketing Trends and Practices

This summer, Starfleet Media published The 2015 Benchmark Report on B2B Content Marketing and Lead Generation. The Starfleet report is based on a survey of high- and mid-level marketing and sales professionals that was conducted in the second quarter of this year.

The survey produced 324 qualified responses, and respondents represented B2B companies of all sizes, from very large (more than $1 billion in revenues) to very small (less than $1 million). Most of the respondents (69%) were affiliated with companies located in North America, while 22% were affiliated with European companies.

In many ways, the findings of the Starfleet survey echo the results of research from several other firms. For example:

• Almost nine out of ten respondents (89%) said their primary high-level objective for investing in content marketing is to acquire new customers.
• The top three specific objectives for content marketing identified in the survey were generate more leads (92% of respondents), raise brand visibility (90%), and generate better leads (87%).
• The top four types of content assets used in the past twelve months were case studies (67% of respondents), company-branded white papers (62%), company-branded webinars (58%), and company-branded e-books (52%).
• Almost nine out of ten respondents (86%) identified  creating compelling content as their biggest content marketing challenge.
• Companies across all industries produced or licensed an average of 5.5 new content assets over the past twelve months.

The Starfleet survey also revealed a few incongruities that are worth noting. For example, 90% of survey respondents agree or strongly agree that unbiased third-party content is generally perceived as more credible than company-branded content, while 83% agree or strongly agree that third-party content generally produces higher-quality leads. However, only 38% of respondents said their company had used research reports licensed from third parties during the past twelve months.

Starfleet also found a significant disparity in the number of content assets that companies create or use. According to the report, software providers produced or licensed an average of eight new content assets over the past twelve months, while the average for all other types of companies was only 3.5 content assets.

The Starfleet research also confirmed that B2B companies are making a substantial financial commitment to content marketing. Thirty-three percent of survey respondents said they spent more than half of their marketing budget on content marketing during the past twelve months, and more than one-third of respondents (36%) said they plan to allocate a greater portion of their marketing budgets to content marketing over the next twelve months.

Illustration courtesy of Flickr CC and TopRank Online Marketing

Will Technology Soon Turn Sales Reps Into Marketers?

A recent post by David Raab at his Customer Experience Matrix blog provoked an interesting discussion about the respective roles of marketing and sales in the demand generation process in B2B companies. David Raab is a well-respected analyst who has covered the marketing technology space for many years, and I respect his work.

In his post, David suggested that the recent trend of marketing playing a larger role deeper into the sales funnel may have peaked, and that technology solutions now exist that enable salespeople to take a more active role earlier in the buying process. As one example, David pointed to a solution offered by MDCDOT, which gives marketing automation functions to sales reps.

Shortly after David's post was published, Direct Marketing News reported that Salesforce.com is enhancing its Sales Cloud offering to put marketing capabilities into the hands of sales reps. Salesforce has already released a tool that combines sales-stage data from the CRM system with behavioral marketing data. This will enable sales reps to better understand how a lead is progressing through the buying cycle. In the second half of 2015, Salesforce will release an offering that will enable sales reps to execute e-mail campaigns using marketing-approved templates, with no additional marketing involvement or approval needed.

David Raab speculated that these types of technology tools could enable salespeople to nurture leads themselves and eventually push marketing back to its more traditional role. He doesn't argue that this change should happen, but rather that it could happen, especially given the tension that still exists between marketing and sales in some organizations. Given the market reach of Salesforce, its recent product moves makes this kind of change more likely.

On a deeper level, these developments raise the sometimes contentious issue of how B2B companies should organize demand generation efforts and allocate responsibilities between marketing and sales. As I wrote in an earlier post, there are now two distinct paradigms of B2B demand generation. Advocates of the marketing-centric paradigm contend that the optimal approach is to expand the role of marketing in lead acquisition and lead nurturing. According to its proponents, this approach has two main advantages:

• It fits better with how most business buyers now prefer to learn about business issues and possible solutions.
• It enables companies to use their demand generation resources more efficiently.

In contrast, the sales methodology paradigm emphasizes the role of sales reps in the demand generation process. Advocates of this approach contend that salespeople should engage with early-stage buyers and use disruptive insights to "shape" how they are thinking about business issues and challenges.

The reality is that B2B demand generation is more varied, complex, and "messy" than it is often portrayed, and therefore neither of these approaches is right for all companies. We now know, for example, that the most effective lead nurturing programs include both content-based communications and person-to-person communications. Many companies rely on marketing to handle most of the content-based communications and on sales reps to handle the person-to-person communications. So, most highly-effective lead nurturing programs involve both marketing and sales.

Market structure and dynamics also play an important role in determining the optimal way to structure demand generation efforts. For example, if your company has a relatively small universe of target prospects, it may be appropriate to have your salespeople take the lead in lead acquisition and lead nurturing. On the other hand, if your company has a large universe of potential customers, you will probably find that marketing should play the dominant role in lead generation.

The important point here is that an optimized demand generation system requires a closely coordinated effort by both marketers and salespeople. In fact, marketing activities and sales activities are interdependent components of a single demand generation process, and in many companies the lines between some marketing responsibilities and some sales responsibilities are becoming less and less clear. The increasing interdependence of marketing and sales constitutes a strong argument for integrating the two functions at the leadership level.

What High-Performing Marketers are Planning for 2015

We're now well into the prediction season, and it's easy to find articles, blog posts, and webinars that focus on what will happen in marketing in the coming year. The prognostications range from timid to bold, and while I wouldn't bet my retirement savings on most of them, some of the predictions are realistic and insightful.

Recently, I attended a webinar that featured some useful (if not completely surprising) predictions derived from solid research. The webinar was presented by Maribeth Ross, the Chief Content Officer and a Managing Director with the Aberdeen Group. The topic of the webinar was "What Best-in-Class Marketers are Planning for 2015," and the content of the webinar was based on research conducted during 2014 in Aberdeen's customer-facing practice areas.

In this webinar, Ms. Ross focused on two major issues:

• What were the top challenges facing marketers in 2014?
• What are best-in-class marketers planning to do in 2015 to address these challenges?

According to Aberdeen's research, the top four pressures facing marketers in 2014 were:

• "We're not getting the most out of our marketing automation investment."
• "We know lead management is important, but we're not doing it very well."
• "Our buyers are doing more research on more channels before ever talking to sales."
• My sales team needs different resources due to this new buyer."

To address these pressures, Ms. Ross says that in 2015, best-in-class marketers plan to:

• Improve their use of marketing automation technologies by implementing progressive profiling, testing and optimizing landing pages, aggregating data to create account-level views, and implementing lead routing and lead scoring
• Develop clearly defined lead management processes and improve their ability to track and measure the performance of their lead-to-revenue funnel
• Double down on investing in content so that they can effectively engage potential buyers who are performing research and educating themselves
• Enhance their sales enablement capabilities by improving lead qualification processes (including, specifically, the ability to identify "hot" leads that should be sent immediately to sales), by analyzing the effectiveness of their content resources, and by leveraging technology to make it easier for sales reps to find and access content resources

As noted earlier, these predictions are not particularly surprising. The pressures that Ms. Ross identified have been building for the past few years at least, and leading B2B marketers have been focused on marketing automation, content marketing, and sales enablement for quite some time. It's likely that these issues will remain important for next several years.

Our Most Popular Posts - 2014 Edition

This will be my last post of 2014, and I want to thank everyone who has spent some of his or her valuable time reading this blog. I hope that you have found the content here to be both thought-provoking and useful.

Thanks to analytics, I can see how many times each blog post has been viewed, and I thought this would be an appropriate time to share which posts have been most widely read. This ranking is based on cumulative total reads, and therefore older posts obviously have a built-in advantage.

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

An Inconvenient Truth About B2B Demand Generation - If you're a B2B marketer, measuring the dynamics of your lead-to-revenue funnel is critical to understanding how well your demand generation system is performing. This post shows that the demand generation system in many B2B companies is horribly inefficient and illustrates how much improvement is possible through the implementation of best practices.

Why Content Marketing is the Best Way to Build the Brand - Some respected marketing industry experts have argued that content marketing has made brand marketing or "building the brand" obsolete. This post argues that building the brand is still an essential marketing objective for B2B companies and that content marketing is now the best marketing tactic to use for branding. For another perspective on the importance of brand building, see Why B2B Branding Still Matters.

Use an Importance-Performance Matrix to Get Marketing and Sales Talking - A perennial favorite. This post explains how to use an importance-performance matrix to capture the degree of agreement or disagreement between marketing and sales regarding key demand generation activities. An importance-performance matrix won't tell you how to resolve conflicts between marketing and sales, but it will identify the issues you need to address.

It's Time to Integrate Marketing and Sales - Marketing and sales "alignment" has been a hot topic among B2B marketing and sales professionals for some time. This post argues that it may be time to move beyond mere "alignment" and actually integrate the marketing and sales functions. In a later post - Four Key Ingredients in the Marketing/Sales Integration Recipe - I discussed four critical requirements for integrating marketing and sales.

Why BANT No Longer Works for Qualifying Leads - One of the most widely-used methods for qualifying B2B sales leads is known by the acronym BANT, which stands for Budget-Authority-Need-Timeline. This post argues that BANT is no longer an effective way to qualify sales leads. In a later post - Rethinking the Value of of BANT (It's Not as Outdated as Some Suggest) - I revisited this topic and argued that the BANT criteria can still be useful for qualifying leads if they are used at the right times to answer the right questions.

Happy New Year, everyone!

Do Inbound Leads Cost Less? Maybe.

Advocates of inbound marketing frequently assert that leads acquired through inbound tactics cost less than leads obtained through outbound marketing techniques. The research usually cited to support this claim is the annual inbound marketing survey conducted by Hubspot. In the State of Inbound 2014 study, Hubspot found that in B2B companies having 51 to 200 employees, the average cost of an inbound lead was $70, while the average cost of an outbound lead was $220. Hubspot went on to say, "We did find that leads sourced through inbound practices are consistently less expensive than outbound leads, regardless of company size."

Hubspot has been conducting annual surveys for five years, and all have consistently shown that inbound leads are less expensive (on a cost-per-lead basis) than outbound leads.

Measuring the relative costs of acquiring leads through inbound and outbound marketing techniques can be useful and valuable, but marketers must keep two important points in mind. First, it's obviously critical to have an accurate picture of the costs. In many companies, inbound marketing work is done by internal employees, many of whom have other job responsibilities. Therefore, unless a company tracks labor costs on a activity basis, the costs associated with inbound marketing will often be understated.

It's also critical to remember that understanding the relative costs of acquiring leads through inbound and outbound marketing programs will not, in itself, tell you whether inbound marketing or outbound marketing is more valuable for your business.

To accurately measure the value of any lead generation tactic, you also need to know what quality of leads the tactic is producing. In this context, lead quality refers to the likelihood that a lead will actually make a purchase and become a customer. To incorporate lead quality into your evaluation, you need to use lead conversion rates to "translate" lead acquisition costs to the customer level.

I can illustrate how lead conversion rates impact lead costs with a simple example. The table below compares the costs of inbound vs. outbound leads at various stages of the lead-to-revenue cycle.

In this example, I'm using the following lead stages:

• Inquiries
• Marketing qualified leads (MQLs)
• Sales accepted leads (SALs)
• Sales qualified leads (SQLs)
• New customers

The cost-per-inquiry values used in the above table are based on research by SiriusDecisions, and the conversion rates in the table for inbound leads are the conversion rates that SiriusDecisions says are achieved by the average B2B company. For illustration purposes in this example, I'm assuming that outbound leads convert at slightly higher rates than inbound leads - 2 percentage points at each lead stage.

As the table shows, the cost-per-inquiry for inbound leads is significantly lower than for outbound leads. At $25.00 per inquiry vs. $41.50 per inquiry, inbound leads are about 40% cheaper than outbound leads. However, when measured on a "per new customer" basis (which is the most important number), outbound leads in this example actually cost about 3% less than inbound leads.

Please understand, I'm not arguing that outbound marketing is "better" than inbound marketing. The conversion rates for outbound leads used in my example are for illustration purposes only. Your conversion rates for both inbound and outbound leads will almost certainly differ from those used in my table. In addition, research by SiriusDecisions has indicated that inbound leads cost less and have higher conversion rates, on average, than outbound leads.

The important point here is that you can't evaluate the value of inbound vs. outbound marketing for your business until you measure your lead acquisition costs at the customer level.

What Makes a Lead Really Sales Ready?

One of the most important requirements for an effective B2B demand generation system is a clear understanding of who constitutes a sales-ready lead. Describing what makes a lead sales-ready is the essential starting point for defining the roles and responsibilities of marketing and sales. In an optimized demand generation system, marketing is primarily responsible for acquiring new leads and for nurturing leads until they are sales ready. Once a lead is sales ready, sales assumes the primary responsible for managing that relationship.

The term sales-ready lead is used frequently by marketing thought leaders and practitioners, but it's difficult to find a useful or widely-accepted definition of the concept. Some marketing pundits avoid the need to define sales-ready lead by saying that the term means whatever marketing and sales agree that it means.

In practice, companies vary greatly in terms of when they pass leads from marketing to sales. In a recent blog post, Bob Apollo described research by SiriusDecisions regarding when companies treat leads as being sales ready. According to this research, 28% of companies treat all contacts or inquiries as sales-ready leads and pass them to sales without any qualification. At the other extreme, 10% of companies only pass leads to sales after they are fully BANT-qualified. In between, 25% of companies will pass a lead to sales when the lead has an "appropriate" job title and is affiliated with an "appropriate" type of company.

We need to do better. If we want to optimize the performance of our demand generation system, we need a rational, reasonable, and substantive definition of who constitutes a sales-ready lead. I'll offer one momentarily, but first it's important to understand who is not a sales-ready lead.

To start with, a raw inquiry does not constitute a sales-ready lead. A raw inquiry is someone who has identified himself or herself, but otherwise has shown only a minimal level of interest in what you offer. He or she may have filled out a registration form and downloaded one of your content resources, but that's it.

Sales ready is also not equivalent to ready to buy. As noted earlier, some companies only pass leads to sales when the leads are fully qualified using the traditional BANT criteria. As I pointed out in an earlier post, the problem with BANT is that some of the criteria won't be met until near the end of the buying process, and in addition, it's increasingly unlikely that any one person can ever satisfy all of the BANT requirements.

A sales-ready lead, therefore, falls somewhere between a raw inquiry and a BANT-qualified lead. Here's my proposed definition:

A sales-ready lead is an individual who (a) is affiliated with a qualified prospect, (b) can make or influence the decision to purchase your product or service, and (c) is sufficiently interested in exploring solutions to engage in a meaningful dialog with a salesperson. In this definition, the term qualified prospect means an organization that has a need your company can address and falls within your defined target market.

This definition provides a good starting point, but I also think it's important to have specific criteria for identifying sales-ready leads. The table below includes eleven criteria that I suggest are appropriate for most companies. The first four criteria apply to the prospect organization, and the remaining criteria apply to the individual lead.

That's what I say makes a lead really sales-ready. How about you?

B2B Marketers Identify the "Best" Lead Generation Techniques

When it comes to evaluating lead generation tactics and channels, most B2B marketers are interested in three basic performance characteristics - the quality, quantity, and cost of leads produced. A recent report by Software Advice provides insights on marketers' perceptions regarding the effectiveness and efficiency of several popular lead generation techniques.

The 2014 B2B Demand Generation Benchmark report is based on a survey of 200 B2B marketing professionals. The survey was designed to elicit input from marketers regarding what channels, offers, content types, and technologies they are using in their demand generation programs and which of those techniques and tools are most effective and efficient. Specifically, the survey asked for marketers' perceptions regarding the productivity of 15 lead generation tactics:

• Trade shows & events
• Search engine advertising
• In-house email marketing
• Print, radio & TV advertising
• Referral/advocate marketing
• Third-party webinars
• Organic search
• Social media advertising
• Third-party lead originators
• Social media (non-ads)
• Telemarketing/cold-calling
• Third-party email marketing
• Retargeting advertising
• Direct mail
• Display advertising

Lead Quantity

The Software Advice survey asked participants to rate each lead generation channel/technique in terms of its effectiveness at producing a large quantity of leads. The rating choices were very high, somewhat high, somewhat low, and very low. The top four channels/tactics for lead quantity (based on the combination of very high and somewhat high ratings) were:

1. Trade shows & events
2. In-house email marketing
3. Referral/advocate marketing
4. Search engine advertising

Lead Quality

Survey participants were also asked to rate each lead generation technique in terms of the quality of leads produced. The top four channels/tactics for lead quality (based on the combination of excellent and good ratings) were:

1. Trade shows & events
2. Referral/advocate marketing
3. In-house email marketing
4. Print, radio & TV advertising

Cost-Per-Lead

Finally, Software Advice asked survey participants to rate each channel or technique in terms of cost. The top four least expensive channels/tactics (based on the combination of very low and somewhat low cost-per-lead ratings) were:

1. In-house email marketing
2. Social media (non-ads)
3. Referral/advocate marketing
4. Third-party email marketing

For me, the most significant takeaway from the Software Advice report is that B2B marketers continue to say that trade shows and events produce both the most and the best leads. This indicates that marketers still believe strongly in the power and efficacy of in-person interactions with potential buyers.

Should Marketing or Sales Take the Lead in Lead Generation?

Today, there are two distinct, and seemingly contradictory, paradigms of B2B demand generation. Both paradigms are essentially responses to profound changes in the B2B marketing and sales environment, the most significant of which has been the emergence of empowered buyers. Business buyers now have easy access to a wealth of information, and they are using that information to perform research on their own. As a result, they are much less dependent on sellers than in the past.

One approach to dealing with empowered buyers is to expand the role of marketing in lead acquisition and lead nurturing. Proponents of this approach rely on research which indicates that today's business buyers are educating themselves and delaying conversations with sales reps until later in the buying process. For example, SiriusDecisions says that business buyers are now performing 67% of their buying process online. CEB and Forrester Research go even further and say, respectively, that B2B buyers are 57% or 67% through the buying process before they engage salespeople.

The marketing-centric paradigm accepts that most potential buyers prefer to learn about business issues and possible solutions on their own, especially in the early stages of the buying process. Advocates of the marketing-centric paradigm say that instead of fighting this preference, companies should use content resources and marketing automation technologies to support the "self-directed buyer" as he or she goes through the learning process.

The second paradigm of B2B demand generation focuses on sales methodology and emphasizes the continued importance of sales reps in the demand generation process. CEB is a major advocate of this paradigm, and what CEB and others argue is that salespeople should engage early-stage buyers and use disruptive insights to change how they are thinking about business issues and challenges. These disruptive insights enable sales reps to shape demand rather than simply react to existing demand. More importantly, disruptive insights provide value that buyers can't easily get anywhere else and thus make it worthwhile for them to interact with sales reps.

Advocates of the sales methodology paradigm argue that the statistics from SiriusDecisions, CEB, and Forrester are averages that mask a wide variation in actual buyer behavior. And there is research to support this argument. For example, in the 2012 How Buyers Consume Information Survey by ITSMA, over 70% of B2B technology buyers said that want to engage with sales reps before they finalize a short list of preferred vendors.

The reality is that B2B demand generation is more varied and complex than it is often portrayed. When you consider all of the available research, it's clear that a large majority of business buyers (probably 80% or more) are performing independent research before they interact with a sales rep. It's also clear, however, that a significant percentage of potential buyers will turn to sales reps early in the buying process. Therefore, the two paradigms of B2B demand generation are, in fact, complementary, not contradictory.

What is also undeniable is that early engagement is vital to demand generation success. Forrester says that solution providers who engage prospects early in the buying process win 74% of the deals, while the win rate for those who engage late in the process is only 26%.

The bottom line is, B2B companies must be ready, willing, and able to engage with prospects on their terms. This means that successful lead generation requires both marketing and sales.

Why Your Content Marketing Should Alienate (Some) Prospects

Recently, I attended a webinar presented by Doug Kessler titled Insane Honesty in Content Marketing. If you're not familiar with Doug Kessler, he's one of the co-founders of Velocity Partners, a content marketing agency based in the UK. Velocity consistently publishes great resources regarding content marketing, and this webinar is a must-see for B2B marketers.

According to Kessler, insane honesty in content marketing consists of:

• Actively seeking out your weaknesses and sharing them openly; and
• Strategically putting your worst foot forward.

Obviously, this approach runs counter to a whole laundry list of widely-accepted marketing principles and practices, and the idea is probably difficult for many marketers to swallow. In the webinar, Kessler shared several examples of insane honesty at work, which is another good reason you should view the presentation.

Six Reasons to Practice Insane Honesty

Kessler identified six reasons to practice insane honesty in your content marketing:

1. It surprises and charms - Because this type of content is rare, it is more likely to capture the attention of potential buyers.
2. It signals confidence - Kessler contends that confidence is the most powerful attribute of all effective content marketing.
3. It builds trust - If you're insanely honest about the weaknesses of your solution, potential buyers will be more likely to trust what you say about the strengths and benefits of your solution.
4. It alienates less likely buyers.
5. It attracts your ideal prospects.
6. It focuses your sales and marketing team on the battles you can win.

All of these reasons are important, but I want to focus on reason #4 in this post. Marketing content that is insanely honest will alienate some of your prospects, and that is a good thing because of the economics of B2B demand generation.

Insane Honesty Supports Economic Demand Generation

The diagram below illustrates the point that your investment in a prospect increases as the prospect moves through the marketing/sales funnel. On average, you will have much more invested in a Sales Opportunity than you will in an Inquiry. Therefore, it's important to determine whether your solution is a good "fit" for a prospect as early as possible in the prospect relationship.

Marketing content that is insanely honest serves two critical marketing objectives. It functions as a magnet that simultaneously attracts prospects who are a good fit for your business and repels those who aren't. The result is a more effective and efficient demand generation process and a lower likelihood of winding up with frustrated and unhappy customers.

How to Close the Performance Gap in Lead Generation and Content Marketing

Over the past few years, both lead generation and content marketing have become primary focus areas for B2B marketers. Because of changes in how B2B buyers are learning about business issues and possible solutions, marketers have been required to assume greater responsibility for acquiring and nurturing sales leads. Meanwhile, most B2B marketers now recognize that content marketing is the most effective way to create and maintain meaningful engagement with potential buyers.

Despite all of the recent focus on lead generation and content marketing, research indicates that companies vary significantly in terms of how well they are performing these critical marketing functions. Some companies excel at lead generation and content marketing, while others aren't doing nearly as well.

Last fall, the Content Marketing Institute and MarketingProfs published the results of their latest annual content marketing survey. In that survey, 93% of B2B respondents said they are using content marketing, but only 42% of respondents said their content marketing programs are effective.

Earlier this year, Demand Metric published the results of a lead generation benchmark survey. In that survey, 89% of respondents said their companies have a lead generation process, but only half of the respondents (49%) rated their lead generation efforts as moderately or highly effective.

The Demand Metric survey found that the three most widely used lead generation techniques were e-mail, tradeshow/event marketing, and content marketing. Demand Metric also found that the top three lead generation techniques were the same regardless of company size or whether a company was growing or experiencing declining revenues, and regardless of how respondents from the company rated the effectiveness of their lead generation process.

In other words, Demand Metric found that everyone is essentially using the same lead generation techniques, but some companies are achieving better results than others. The logical conclusion is that lead generation effectiveness is not a function of which techniques are used, but how those techniques are planned and executed.

So, what attributes and practices separate companies with high-performing lead generation and content marketing programs from those whose programs are less effective? The CMI/MarketingProfs research provides insights on this important issue.

CMI and MarketingProfs compared several attributes of highly-effective content marketers with less effective content marketers. Highly-effective content marketers were survey respondents who rated the effectiveness of their organization's use of content marketing as 4 or 5 (on a scale of 1 to 5, with 5 being "Very Effective"). Less effective marketers were those respondents who rated the effectiveness of their organization's use of content marketing as 1 or 2 (with 1 being "Not At All Effective"). The table below shows the results of this comparison.

As this table shows, companies with highly-effective content marketing programs are more likely to:

• Have a documented content marketing strategy
• Have someone with specific responsibility for overseeing and managing the content marketing program
• Devote sufficient financial resources to their content marketing program

While the CMI/MarketingProfs survey dealt specifically with content marketing, these attributes are equally applicable to lead generation. To have a highly-effective lead generation program, you need a well-conceived and documented lead generation strategy, someone dedicated to managing your lead generation efforts, and sufficient financial resources to support an effective lead generation program.

Inbound Marketing After 9 Years - From Exaggerated Expectations to Core Marketing Strategy

Inbound marketing will be ten years old in 2015. The term inbound marketing was coined in 2005 by Brian Halligan, the co-founder and CEO of HubSpot. In reality, however, some aspects of what we now call inbound marketing are much older.

It's reasonable to argue, for example, that inbound marketing began in 1886 when Reuben H. Donnely produced the first yellow pages directory featuring business names and phone numbers categorized by types of products and services. Consumers interested in a particular product or service could use the directory to find area businesses offering that product or service. The communication channels have certainly changed, but the basic objective of being "findable" by prospective customers is essentially the same.

On many occasions over the past nine years, marketing pundits have proclaimed inbound marketing to be the new paradigm of marketing. They've argued that traditional outbound marketing is fundamentally broken, and that inbound marketing is now the most effective and efficient way to create engagement with potential customers. Some pundits have contended that companies should essentially abandon traditional outbound marketing efforts and shift entirely to an inbound marketing strategy.

In my view, some of the hype surrounding inbound marketing has been overdone, and at least some marketing pundits have made unrealistic claims regarding the benefits that inbound marketing will deliver.

Like many innovations, inbound marketing is moving through a version of the Gartner hype cycle. When an innovation is first introduced, the initial enthusiasm (driven by hype) often leads to a "peak of exaggerated expectations" where users/adopters expect far more than the innovation can realistically deliver. When these unrealistic expectations aren't met, what follows is a "trough of disillusionment" where some users/adopters decide that the innovation is worthless and abandon it entirely. At this point, some users/adopters will develop a more realistic view of what benefits the innovation can deliver, and they will do the work necessary to become increasingly proficient at using the innovation to gain these benefits.

So, after nine years, what do we know about the realistic value of inbound marketing and the role it should play in a B2B company's overall marketing effort?

First, it's now clear that inbound marketing is the most effective and efficient way for most B2B companies to acquire new leads. Notice that I said the most effective and efficient way for most companies. In some cases, inbound marketing will not be the best way to generate new leads. For example, if your company sells specialized, complex, and/or expensive capital equipment, consulting services, or information technologies, the number of prospects that are qualified to buy from you is relatively small. In this situation, an effective lead generation program is most likely a combination of inbound and outbound marketing and prospecting by sales reps or business development representatives.

Second, a comprehensive marketing effort for most B2B companies will encompass more than lead acquisition, and inbound marketing is not particularly well-suited for performing some of these other important marketing functions. Therefore, even those companies that rely heavily on inbound marketing for lead acquisition will still use outbound marketing tactics and methods for several purposes. For example, lead nurturing is a critical marketing function for B2B companies that offer complex products or services and have lengthy sales cycles. E-mail is the workhorse channel for lead nurturing programs, and nurturing e-mails are an outbound marketing tactic.

The bottom line? Inbound marketing should be a critical part of the marketing efforts at most B2B companies, and it's likely to become even more important in the future as "digital natives" increasingly assume decision-making roles in business enterprises. However, inbound marketing will not constitute a complete marketing solution, at least for the foreseeable future.

What Milkshakes Can Teach Us About Marketing

The first step to designing an effective marketing strategy and creating compelling marketing content is to understand what your potential buyers are trying to accomplish when they purchase products or services like those you provide. In most cases, people don't buy a product or service because they want that product or service itself. More often, when people become aware of a job that they need to get done, they look for a product or service that they can "hire" to perform the job. Theodore Levitt, the legendary marketing professor at the Harvard Business School, captured this concept in a memorable way when he said, "People don't want to buy a quarter-inch drill. They want a quarter-inch hole."

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

Digging a little deeper, the researchers found that most of the morning milkshake customers were people on their way to work. Many of the customers faced a long commute, and they needed something to make the drive more interesting. In addition, while they weren't necessarily hungry when they bought the shake, they knew if they didn't eat something, they would be hungry by mid-morning. Most of these customers also faced similar constraints. They were in a hurry, they were usually wearing their business clothes, and they only had one free hand.

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

It's not difficult to find examples of this idea in the business world. For example:

• Most business owners don't really want accounting software, but many buy such software because they realize they need to generate invoices faster, know how much they owe to vendors, and understand how well their company is performing financially. Accounting software enables them to perform these jobs more efficiently than a manual accounting system.
• Most business owners don't really want property insurance, but most will purchase insurance because they know they need to protect themselves financially in case of a fire. Insurance is the best-available tool for performing this job.
• Most business owners don't really want a company brochure, or a direct mail campaign, or for that matter, a website, but many will invest in these marketing resources because they see them as effective tools for performing the job of increasing sales.

As marketers, it's easy for us to forget that most potential buyers aren't really interested in our products or services per se. What they are (or can become) interested in is what those products or services can help them accomplish. Our products or services are simply the means to an end, and it's critical to keep this fact in mind when planning our marketing efforts. To use Professor Levitt's analogy, our marketing strategy and our marketing content should be more about quarter-inch holes than quarter-inch drills.

To develop an effective marketing strategy and create compelling content, you have to know what jobs your prospects are trying to get done, why those jobs are important, what happens if those jobs don't get done, and what issues or problems can prevent your prospects from performing those jobs.

Who Should Be Responsible for Acquiring New Leads?

For B2B companies that sell complex products or services, keeping the sales pipeline filled with qualified leads is vital to sustaining both revenue growth and profits. When it comes to acquiring new sales leads, B2B companies must address two distinct but related issues:

• How can we acquire enough sales leads to enable us to meet our revenue objectives?
• What is the most efficient and cost-effective way to acquire the volume of leads we need?

Historically, most B2B companies have relied primarily on their salespeople to identify and acquire new leads. "Prospecting" was considered to be a core part of every sales rep's job, and effective prospecting has long been a popular topic at sales training events. Unfortunately, the traditional approach to lead acquisition no longer works very well for many B2B companies. 

Today, buyers can go online and find most of the information they need to evaluate products and services. So, many buyers are delaying conversations with sales reps until later in the buying process, and as a result, it's becoming a lot harder for salespeople to create the initial engagement with potential buyers.

In recent years, a growing number of B2B thought leaders have argued that marketing, rather than sales, should be primarily responsible for lead acquisition. The proponents of this view make two compelling arguments. 

First, they contend that lead acquisition is an inherently inefficient activity that has a high input (work required) to output (success) ratio. Because of the inherent inefficiency, it's important to acquire leads using low-cost resources when possible. Salespeople are expensive resources, and their prospecting activities don't scale because they're labor intensive. Marketing programs, on the other hand, scale very easily, and many can be automated on a cost-effective basis.

Second, moving primary responsibility for lead acquisition from sales to marketing will improve sales productivity. Reducing the amount of time that salespeople must spend prospecting means that they will have the ability to manage a larger number of high-value sales opportunities. This allows sales reps to close more deals and generate higher revenues for the company.

Despite these compelling arguments, it's clear that many B2B companies are still relying heavily on sales reps for lead acquisition. The following table is based on the Sales Performance Optimization surveys conducted by CSO Insights and includes data from the survey results published in 2011 through 2014. The surveys asked participants to specify what percentage of their leads are self-generated by sales reps, what percentage are generated by marketing, and what percentage originate from other sources.

As this table shows, the percentage distribution of leads has remained fairly stable for the past four years. In fact, data from earlier CSO Insights' surveys shows that little has changed for the past eight years.

It's clear that most B2B companies should rely more on marketing and less on sales for lead acquisition. This allows a company to use its sales reps to do more of the things that only they can do - have meaningful, personal, one-on-one conversations with prospects who are truly sales ready.

So, what is the right division of responsibility for lead acquisition? The answer will depend on what you sell and on the economic structure of your market. Based on my work with clients and on a review of current demand generation best practices, here's a framework that should work for many B2B companies:

• Percentage of leads generated by sales reps - 20% to 30%
• Percentage of leads generated by marketing - 40% to 60%
• Percentage of leads from "other" sources - 10% to 20%