Why Marketing Needs a Balanced Scorecard

Earlier this year, ITSMA, VisionEdge Marketing, and Forrester Research surveyed marketing leaders about how they demonstrate marketing's value to the business. The survey revealed that marketers are producing more performance data than ever, but that most of the data doesn't resonate with senior company leaders. For example, the survey found that only 9% of CEO's and 6% of CFO's rely on marketing data to make business decisions.

The study authors contend that most marketing metrics don't do a good job of communicating the value of marketing for three reasons.

• They measure marketing activities, but not important business outcomes.
• They measure operational efficiency, but not the effectiveness of marketing.
• They measure past performance, but they don't provide predictive insights about future outcomes.

Measuring the impact that marketing has on company revenues and profits is a critical aspect of managing marketing performance, but an effective performance management system for marketing must also perform several other functions. For example:

• It must measure the performance of individual marketing activities and programs so that marketers can make investment and marketing mix decisions that will maximize results.
• It must enable marketers and other business leaders to evaluate how well their company's marketing strategy is working.
• It must support both strategic and tactical decision making.
• It must enable marketing leaders to measure the efficiency and effectiveness of operational marketing activities and processes.

In order to perform all of these functions, a performance management system for marketing will necessarily include several types of metrics, including some of the kinds of metrics that are now being criticized. Specifically, a comprehensive marketing performance management system will include:

• Financial and non-financial measures
• Metrics for leading and lagging performance indicators
• Measures that focus on the strategic impact of marketing and metrics that support tactical decision making
• Measures of ultimate business outcomes and measures of activities, outputs, and intermediate outcomes
• Revenue and cost metrics

To prove the value of marketing to C-level executives and manage the marketing function effectively, marketing leaders need a balanced scorecard for marketing. Since its introduction by Robert Kaplan and David Norton in the early 1990's, the balanced scorecard has become one of the most widely-used and effective tools in the business management arsenal.

In my next post, I'll describe what a balanced scorecard for marketing looks like.

How to Build a Better Profile of Your Ideal Customer

Most readers of this blog are probably familiar with ideal customer profiles. An ideal customer profile is a description of the kinds of companies that would make the best customers for your business. The goal of creating and using an ICP is to focus your marketing and sales efforts on those prospects with the greatest likelihood of becoming good customers and to avoid wasting valuable resources on prospects that aren't a good fit.

Most companies base their ideal customer profile(s) on the characteristics of their existing customers. They first identify their "best" customers (which usually means their largest and/or most profitable customers), and then they identify what those "best" customers have in common. Most ideal customer profiles use "firmographic" attributes such as:

• Annual revenues
• Number of employees
• Industry vertical
• Location

Some companies will also include other attributes when possible, such as:

• The "footprint" of the organization (local, regional, national, global)
• The most relevant organizational unit or department
• The business situation (for example, is the company in growth or decline)

While this process for creating an ideal customer profile is used by many companies, it doesn't go quite far enough. When I work with clients to develop ICP's, I ask them to consider three additional questions as we go through the process just described. Answering these questions will add depth and context to your ICP and ultimately make your ICP more insightful and useful.

Here are the three questions I add to the conventional process:

• What kinds of companies have derived significant (i.e. above-average) value from using our product or service, and why have these companies obtained greater value?
• What kinds of companies will be receptive to our marketing and sales efforts and thus be more likely to buy from us?
• What kinds of companies can we acquire as customers at an acceptable cost?

Of these three questions, the first is the most important. Companies that have derived exceptional value from using your product or service are likely to be among your largest and most profitable customers. Common sense says that similar types of companies will make your best prospects.

Understanding what is driving the exceptional value may enable you to expand the definition of your ideal customer. For example, you may find that the companies deriving exceptional value are primarily found in one industry. However, when you identify why those companies are obtaining greater value, you may find that the same issue or challenge also exists in other types of organizations that you do not currently serve. So, by answering the why question, you may well uncover an entirely new group of "ideal" prospects.

Why There's Still So Much Bad Content

In a recent article at LinkedIn, Joe Pulizzi, the Founder and Executive Director of the Content Marketing Institute, observed that most of the marketing content produced by companies is "flat out awful." He wrote, "In many cases, the content is self-serving, not useful and, maybe the worst, pointless."

Pulizzi argues that companies produce bad content for three reasons.

• The vast majority of companies do not have a formal content strategy.
• The content marketing efforts at most companies lack focus. Many marketers feel compelled to develop content around all of the products and services they offer. The result is often content that is too broad (and too shallow) to be effective.
• In many companies, no one is accountable for the overall content marketing program.

I agree that the lack of strategy, focus, and/or accountability can result in "awful" marketing content. I also believe, however, that there's a more fundamental problem contributing to the continuing use of bad content.

We now know that most effective B2B marketing content is primarily educational and non-promotional. The goal of content marketing is to provide potential buyers information that is insightful, useful, and valuable, and thereby demonstrate your company's expertise, credibility, and trustworthiness.

The problem is, this approach runs counter to the basic paradigm of marketing that's existed for decades. For years, we've been trained to think that the best way to sell more stuff is to effectively promote our brand and our products or services. In the traditional paradigm of marketing, content is primarily about us - our company or our products or services.

Shifting from promotional content to content that's primarily educational and non-promotional is a difficult and counterintuitive change to make for most marketers.

In his new book, Ctrl Alt Delete, Mitch Joel provides an example that illustrates just how entrenched the traditional marketing mindset still is. Joel writes:

"Last year, I was in a business meeting when the idea for an iPhone app came up. It was a smart idea (you know, the kind of idea that you wish you had thought of). The chief marketing officer smiled during the presentation, put his hand up to ask a question, removed the glasses from his eyes and placed them on his notebook, folded his hands, leaned forward, and said, 'It's genius. . . but can we put our four key brand messages in there as well, because if we don't force people to look at them, what's the point of this app?'"

Companies are still producing "awful" content primarily because many marketers can't resist the urge to "always be promoting." Strategy, focus, and accountability are all important to building an effective content marketing program, but the starting point is adopting a different mindset about what constitutes good content and what role content plays in the marketing function.

What Content Marketers Can Learn from French Cooking

Research shows that producing enough content is now the greatest challenge facing B2B content marketers. (B2B Content Marketing:  2013 Benchmarks, Budgets, and Trends - North America) More than producing engaging content. More than lack of budget.

The volume of content that's required to fuel effective marketing programs is growing exponentially for several reasons, including:

• The need to make content relevant for individual buyers at every stage of the buying process
• The short lifespan of content resources (particularly social media content)
• The need to publish content on a frequent basis

To create enough content on a timely basis, you need an approach to content development that will  maximize the results you get from your content creation efforts. Believe it or not, B2B content marketers can boost the efficiency of content development by taking a lesson from French cooking.

In classic French cuisine, there are five mother sauces - Béchamel, Veloute, Espagnole, Hollandaise, and Tomate (tomato). These five mother sauces provide the foundation for virtually all the sauces used in traditional French cooking. To create other sauces, you simply add the appropriate ingredients to one of the mother sauces. For example, you make Mornay sauce by adding Gruyere and Parmesan cheese to a Béchamel sauce, and you make Bearnaise sauce by adding white wine, shallots, tarragon, and peppercorns to a Hollandaise sauce.

The same concept can be used to manage B2B content development. Here's how the "mother sauce" approach to content development works.

Identify Value Propositions

As with most important marketing issues, the process starts with identifying the value propositions that are essential to your company's go-to-market strategy. Value propositions describe how your products or services create value for customers, and they provide the foundation for your content marketing efforts. Most of the content resources you develop should be based on the value propositions you offer. If you work for a small or mid-size company, you should be able to identify four to eight value propositions that encompass the significant ways that your solutions create value.

Develop the "Mother" Resources

Once you have identified your critical go-to-market value propositions, the next step is to develop one or two substantial content resources for each value proposition. These core resources are the content equivalent of the mother sauces. They will usually be longer-form resources such as white papers or e-books, and they will provide a thorough description of each critical value proposition. In some cases, these mother resources may be more like "working papers" than finished content assets. For example, you may decide to create versions of your mother resources for specific industries or buyer personas, and if you do, you may never actually publish the mother resources in their original form.

Make Each Mother Resource the Matriarch of a Large Content Family

Each mother resource should provide a fertile source for many "child" content assets. For example, with a little creativity, you should be able to use a mother white paper or e-book as the basis for:

• A full-length webinar or 2 to 3 shorter webcasts or videos
• 2 to 3 (or more) articles for online or offline publications
• 3 to 6 (or more) posts for your blog
• A dozen or more social media updates (Twitter, LinkedIn, Facebook, etc.)

This approach won't eliminate all of the work relating to content development. It doesn't constitute an "Easy" button. However, it will focus your work and enable you to get the biggest possible "bang" from your content development efforts.

Image By:  Dinner Series (www.flickr.com)

Rethinking the Value of BANT (It's Not as Outdated as Some Suggest)

Last fall, I published a post here titled Why BANT No Longer Works for Qualifying Leads. In that post, I argued rather strongly that BANT (the acronym for Budget-Authority-Need-Timeframe) is no longer an effective way to qualify sales leads because of changes in how B2B buyers make purchase decisions.

My post was neither the first nor the last discussion of BANT to appear in the blogosphere. Here are a few of the blog articles that have been published this year.

• Why BANT is Bunk for Today's B2B Buyer by Ardath Albee
• Banning BANT:  Redefining Quality Lead Criteria and Handling Moot Objections by Allison Tetreault
• All Real Salespeople Love Sales Leads (but there is a tiny caveat) by James Obermayer
• BANT is Dead - Find the Authority by Mike Damphousse
• Lead Scoring:  Don't BANT On It by Sarah Hums
• BANT Isn't Enough Anymore:  A New Framework for Qualifying Prospects by Pete Caputa

As you can tell from these titles, the weight of opinion in the blogosphere is clearly anti-BANT.

While I stand by what I wrote last fall, I also now believe that my criticisms of BANT were probably too broad and that the BANT criteria are still relevant and useful for evaluating sales leads if they're used at the right times to answer the right questions. In the typical demand generation process, there are three major points at which you need to evaluate the quality of a sales lead.

Qualification of New Leads

The first is when you initially acquire a lead, and the issue is whether the lead should be added to your nurturing program. BANT criteria have little role to play in this decision. At this stage, the only information about the lead that you're likely to have is a name, a company affiliation, and a job title. Company affiliation and job title may allow you to infer something about potential need, financial ability to purchase, and buying authority, but that's it. For this decision, the primary criteria should be that the lead is affiliated with an organization that fits your company's target market and has a job title that indicates a reasonable connection with the products or services you sell.

Identification of Sales-Ready Leads

The next point at which you need to evaluate lead quality is when you are deciding whether a lead is ready to engage with a sales rep. A modified version of BANT should be part of the criteria you use to make this decision. For example:

• Need - A sales-ready lead will have acknowledged the existence of a need that your product or service can address.
• Authority - A sales-ready lead will be a member of the buying group that will make the purchase decision. The lead doesn't need to be the classic "economic buyer" or have sole buying authority, but he or she should be a member of the decision-making group.
• Timeframe - A sales-ready lead will be actively evaluating possible solutions for the recognized need. Your lead may not have a firm schedule for making a purchase decision, but he or she should have acknowledged that addressing the need has become a priority for his or her organization.
• Budget - A lead doesn't need to have an established budget to be considered sales ready. As I wrote in my earlier post, research by DemandGen Report has shown that between 70% and 80% of business buyers evaluate potential solutions, build a business case for immediate adoption, and then obtain spending approval. However, you should be fairly confident that the prospect organization has the financial wherewithal to purchase your product or service.

Identification of Sales Opportunities

The third point at which you need to evaluate lead quality is when you are determining whether you have a legitimate sales opportunity. By sales opportunity, I mean a potential deal that has progressed far enough to be included in your revenue forecast. For this decision, the focus of lead qualification is on the prospect organization rather than on an individual "lead" within the organization, and the BANT criteria are particularly relevant. For example:

• Need - To qualify as a sales opportunity, your sales rep should have confirmed that the prospect has a need that your product or service can address and that all members of the buying group have acknowledged the need.
• Authority - Your sales rep should have identified and established relationships will all members of the buying group. In addition, you sales rep must understand what process will be used to make the buying decision and what role each "buyer" plays in that process.
• Timeframe - To qualify as a sales opportunity, the buying process must have progressed to the point that the prospect is committed to making a purchase decision within a defined period of time.
• Budget - While it is not essential to have a specific budget line item for the proposed purchase, your sales rep should have confirmed that the prospect's buying group has access to sufficient funds to make the purchase and the ability to commit those funds when the purchase decision is made.

BANT should never be the only criteria used to qualify sales leads. As noted earlier, BANT is not appropriate for qualifying early-stage leads, and it provides only some of the criteria for identifying when a lead is sales ready. However, BANT is not nearly as useless or outdated as some of us may have thought.

Why Third-Party Content Should Be Part of Your Content Marketing Mix

Two recent research studies have caused me to rethink my views regarding the role and value of third-party content in the marketing efforts of B2B companies. I have always argued that most of the marketing content resources used by a company should be developed internally or with the assistance of outside professional content developers. Either way, the "authorship" of the content is attributed to the company or to an executive or other internal expert. With third-party content, another person or firm creates the content and is shown as the author.

The ultimate objective of content marketing is to cause potential customers to view your company as a trusted resource for valuable information and insights and as a capable and reliable business partner. To accomplish this objective, most of the content you publish should be "yours." It must communicate your company's expertise and capabilities. As a general rule, third-party content just isn't as effective for those purposes.

While I still say that companies should rely primarily on content they create, I also now believe that many companies can benefit from using third-party content on a selective basis. My reasoning is based on two recent research studies that provide important insights regarding the types of content that B2B buyers trust.

The CMO Council recently published a white paper - Better Lead Yield in the Content Marketing Field - that is based on a survey of more than 400 B2B content consumers. When survey participants were asked what types of content they most value and trust, vendor-created content came in last.

As the table below shows, survey respondents said they value and trust professional association research reports and white papers, research reports and white papers created by industry groups, customer case studies, reports and white papers written by analysts, and independent product reviews more than vendor-created content.

The 2013 B2B Content Preferences Survey by DemandGen Report showed similar results. In this survey, B2B buyers were asked which of four types of content they give more credence to. The table below shows that vendor-branded content doesn't fare as well as third-party content.

It seems clear that potential buyers are inclined to trust third-party content more than content created by potential vendors, and B2B marketers should take advantage of this inclination. Content authored by a third-party expert and sponsored by your company can be particularly effective for persuading a potential buyer to begin a relationship with your company. This type of sponsored content can include white papers, eBooks, and research/analytical reports. It could also include a webinar sponsored by your company and presented by a third-party expert.

Content that you develop should always play the predominant role in your content marketing efforts. There are several ways to make your content more trustworthy and credible to potential buyers, and I discussed this topic in an earlier post. However, the right third-party content used in the right ways can be a powerful addition to your content marketing program.

How to Make the Cost of Delay Visible to Your Prospects

Keeping prospects moving through the buying process is a perennial challenge for B2B marketing and sales professionals. I suspect that all of us have faced this issue in one form or another. We acquire a new lead who seems to be a good fit for our solution, and for a few weeks, she responds to our lead nurturing offers and consumes our content. Then activity just stops. Or perhaps we've made a great presentation to the buying group and delivered a compelling proposal only to be told that our prospect has decided not to move forward "at this time."

When prospects don't keep moving through the buying process, the result is longer sales cycles, stalled deals, and the dreaded "no decision." Research from several sources shows that keeping prospects moving has become a difficult job. For example:

• In the 2013 Sales Performance Optimization survey by CSO Insights, 40% of respondents said that their sales cycles for new customers were seven months or longer. In the 2012 survey, only 33% of respondents reported sales cycles of that length. Research by SiriusDecisions, IDC, and others has also found that sales cycles are getting longer for B2B companies.
• The CSO Insights survey also revealed that the number of no decisions is increasing. In the 2013 survey, respondents reported that 26.1% of forecast deals resulted in no decisions. That's up from only 17% of forecast deals in 2002.

Longer sales cycles, stalled deals, and "no decisions" can be caused by several factors, some of which are beyond your control. However, you can alleviate one of the primary reasons that prospects stop moving through the buying process.

Today's business buyers are incredibly busy, and like the rest of us, they spend most of their working time dealing with issues or problems that they perceive to be important and urgent. If they don't see a problem as both important and urgent, they won't give it much attention. That's why the status quo is usually your toughest competitor. In most cases, doing nothing is the easiest choice your prospect can make.

The key to breaking the grip of the status quo is convincing your prospect that the problem your product or service will solve is worth his or her time and attention. In essence, you must help your prospect answer two questions: Why is it important for me to address this problem or issue, and why should I deal with the problem or issue now?

One of the most effective ways to demonstrate the importance and urgency of a problem is to make the cost of delay visible to your prospect. That's why I include a cost of delay calculation in every ROI calculator I develop. Most ROI calculators focus on the traditional ROI metrics - the basic ROI percentage, the payback period, net present value, and possibly internal rate of return. These metrics should be included in any ROI estimate, but they won't necessarily communicate a sense of urgency to your prospect. That's what a cost of delay calculation does really well.

The basic cost of delay formula is:

Average Solution Benefits - Average Solution Costs

When calculating the cost of delay, you can use daily, weekly, or monthly average values. I typically choose the unit of measure based on the size of the benefits and cost values. The larger the values, the shorter the unit of measure.

To illustrate how the cost of delay calculation works, let's assume that your company offers marketing asset management/web-to-print solutions to corporate customers. For a particular prospect, you've determined that your solution will produce the following financial benefits during the first twelve months after the solution is fully implemented.

• Reduction of request processing costs - $46,791
• Increase in gross profits - $25,000
• Reduction of obsolescence waste - $18,000
• Reduction of materials customization costs - $16,000
• Reduction of inventory management costs - $7,404

The annual cost of your solution is $75,000, and you will need one month to implement your solution for this prospect.

Based on these facts, the monthly cost of delay would be calculated as follows:

Monthly CoD = Average Monthly Solution Benefits - Average Monthly Solution Costs

Monthly CoD = ($113,195 / 13) - ($75,000 / 12)

Monthly CoD = $8,707.31 - $6,250.00

Monthly CoD = $2,457.31

To make the cost of delay even more compelling, I will typically include a cumulative cost of delay chart somewhere in my ROI calculator. For this example, that chart would appear as follows:

Making the cost of delay visible to your prospects won't cure all of your sales cycle problems, but it can create the sense of urgency that will keep your prospects moving through the buying process.