Our Most Popular Posts - 2016 Edition

This will be my last post of 2016, and I want to thank everyone who has spent some of his or her valuable time reading this blog. My goal for this blog has always been to provide content that readers will find to be thought-provoking and useful, and I've been immensely gratified by how this blog has been received. In 2016, our total pageviews more than doubled over the 2015 level.

For the past few years, I've used my last post of the year to share which posts have been most widely read. The ranking is based on cumulative total reads, so older posts obviously have a built-in advantage. So, in case you missed any of them, here are our five most popular posts:

1. An Inconvenient Truth About B2B Demand Generation
2. Why Content Marketing is the Best Way to Build the Brand
3. Use an Importance-Performance Matrix to Get Marketing and Sales Talking
4. Customer Experience is the New Competitive Battleground in B2B
5. What Separates Top-Performing Marketers From the Field

Happy New Year, everyone!

Illustration courtesy of Republic of Korea via Flickr CC.

Where Is Marketing Spending Headed in 2017?

By this point, most B2B marketers are well into their planning for 2017, and it appears that many marketers will have healthy marketing budgets in the coming year. Several research studies have found that a majority of marketers are expecting their budgets to increase in 2017.

For example, in the August 2016 edition of The CMO Survey (sponsored by Deloitte, the American Marketing Association, and Duke University's Fuqua School of Business), respondents, on average, expected their marketing budgets to increase by 7.2% over the ensuing 12 months. While these results do not cover all of 2017, they still indicate that marketing budgets are likely to rise in the first several months of the coming year.

In the CMO Spend Survey 2016-2017 by Gartner, 57% of survey respondents said they expect their marketing budget to increase in 2017, while only 14% expect their marketing budget to decrease next year.

Where Will Spending Grow in 2017?

So, where will marketers be increasing their spending in 2017?

Marketing Technology - Given the growing dependence of marketing on technology, it shouldn't be surprising that marketers expect to be spending more on martech in 2017. In the State of Marketing Technology 2017 study by Walker Sands Communications and chiefmartec.com, 70% of survey respondents said they expect their marketing technology budget to increase slightly (50%) or greatly (20%) in 2017, and only 2% expect a decrease.

Content Marketing - Recent research also indicates that marketers will be spending more in 2017 on content development and content marketing. In the 2017 edition of the content marketing survey by the Content Marketing Institute and MarketingProfs, 70% of B2B respondents, and 73% of B2C respondents said they expect to create more content in 2017 than they did in 2016. On the specific issue of content marketing spending, 39% of B2B respondents, and 42% of B2C respondents said they expect their content marketing budget to increase over the next 12 months.

Account-Based Marketing - It also seems clear that marketers will be spending more in 2017 on account-based marketing activities and programs. The growing popularity of ABM is now well established, and research shows that B2B companies are investing more in their ABM efforts. In the 2016 State of Account Based Marketing (ABM) Study by SiriusDecisions, 27% of survey respondents said they were devoting between 11% and 30% of their total marketing budget to ABM. That was up from 19% in the 2015 edition of the study.

And fully 73% of the survey respondents in the SiriusDecisions study said they were spending more or significantly more on ABM in 2016, compared to 2015. It's likely that these spending patterns will continue in 2017, although the rate of spending growth may slow.

Predictive Analytics - In the B2B marketing world, the use of predictive analytics is closely tied to the use of ABM. Therefore, as more and more companies implement ABM, the use of predictive analytics is also likely to increase. In the 2016 Hype Cycle for Digital Marketing and Advertising, Gartner puts "Predictive B2B Marketing Analytics" at the peak of inflated expectations. Gartner has observed that the market for B2B predictive analytics remains immature, but the firm also says that "the return on investment is often so compelling that many B2B companies are likely to consider adoption over the next two or three years."

Image courtesy of Louise McLaren via Flickr CC.

Marketers Believe They are Closing the Technology Gap

U.S. marketers are increasing their spending on marketing technologies, most say they have adopted best-of-breed solutions (as opposed to all-in-one technology suites from a single vendor), and most also say they are doing a pretty good job of extracting value from their marketing technology investments.

These are a few of the findings of the State of Marketing Technology 2017 study by Walker Sands Communications (with contributions by Scott Brinker). This study was based on an online survey of 335 U.S. marketers that was fielded during September and October 2016. Walker Sands conducted a similar survey last year, which makes some year-over-year comparisons possible. While the Walker Sands research didn't focus exclusively on B2B marketers, it's likely that many of the study findings will apply to B2B companies.

When Walker Sands surveyed marketers last year, many were frustrated with the state of marketing technology at their company. Only 50% of respondents said their company was investing the right amount in marketing technology, and only 58% said their technology was up-to-date and adequate.

This year, surveyed marketers were much more positive. Seventy-one percent of respondents now believe that their company is investing the right amount in martech, and 69% said their technology is up-to-date and sufficient to help them do their jobs more effectively.

This positive attitude is reflected in budget expectations for 2017. Fifty percent of respondents said they expect their company's martech budget to increase slightly in 2017, and another 20% said their company's martech budget would increase greatly next year.

Marketers also believe that they are now facing fewer obstacles when it comes to adopting marketing technologies. The table below shows how participants in the 2016 and 2017 studies responded when they were asked:  "What's holding your company back from implementing new marketing technology?"

Despite the progress, however, over half (56%) of the respondents in the latest survey still believe that the martech landscape is evolving faster than their companies' implementation and use of marketing technology tools.

Over the past few years, it's become clear that marketing success depends on the effective use of technology. The Walker Sands research indicates that most marketers are doing a better job of adopting new technology tools, even if they can't completely keep up with the pace of martech innovation.

Top image courtesy of Grzegorz Jereczek via Flickr CC.

The Key to Managing Customer Experience Success

Over the past few years, it's become abundantly clear that delivering outstanding experiences to existing and potential customers is critical for competitive success. There's a widespread recognition among marketers and other company leaders that customer experience has become a new basis of competition for B2B companies.

Numerous research studies have shown that company leaders now view customer experience as an important driver of revenue growth and competitive advantage. For example, in the B2B Digital Trends 2016-2017 report by Econsultancy (in association with Adobe), which was based on a survey of 1,141 B2B marketing, digital, and e-commerce professionals, respondents identified optimizing the customer experience as their most exciting opportunity in 2016 and for the next five years.

Several research studies have also clearly demonstrated that delivering great customer experiences drives superior financial performance. For example, annual research by Forrester has found a strong correlation between superior customer experience and superior revenue growth across more than a dozen industry groups.

But despite the undeniable importance of customer experience, and all of the recent attention it's received, there is compelling evidence that most B2B companies are still struggling to provide the kinds of experiences that their customers increasingly expect.

• A recent report by Gallup stated that only 29% of B2B customers are strongly committed to the companies they do business with, which means that B2B companies are at some risk of losing 71% of their customers.
• A 2015 survey of 1,350 B2B executives by Accenture found that only 23% of B2B companies excel at delivering great customer experiences, while the majority of B2B companies are "idling in customer experience mediocrity."

Part of the problem is that managing customer relationships is still a fragmented process in most B2B companies. In a recent survey of marketing professionals in 750 mid-size B2B companies, Gleanster Research divided the customer experience lifecycle into five stages and asked survey participants who "owned" each stage. Survey respondents said that marketing owned two stages (awareness and acquisition), sales owned two (conversion and expansion), and service owned one (retention).

The reality is, consistently providing great customer experiences is a complex, multi-faceted undertaking that involves several business functions in a company. But it's also true that if a company wants to achieve customer experience success, it must have a person (or function) who is responsible for coordinating the work involved in customer experience delivery.

In many ways, marketing is best suited to orchestrate the overall customer experience, but this will be a new type of role for most marketing leaders. To succeed, he or she must coordinate the work of several business functions that have operated more or less independently in the past.

In an earlier post, I discussed how marketing leaders can eliminate silos within the marketing function by building a team of teams. That strategy becomes essential when you need to tear down the walls that usually exist between marketing and other business functions that must work together effectively to achieve customer experience success.

Illustration courtesy of The United States Army Band via Flickr CC.

Solving the Real-World Challenges of ABM

A few years ago, the noted behavioral economist and best-selling author Dan Ariely described big data in a rather memorable way. He said, "Big data is like teenage sex:  everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it."

With a few minor tweaks, Ariely's description of big data can be applied to account-based marketing:

• ABM has been one of the hottest topics in the B2B marketing and sales world for the past couple of years. Virtually all B2B marketers are aware of ABM, and the odds are that most are thinking, if not actually talking, about it.
• Most B2B companies are just beginning to learn how to do ABM. In the 2016 State of Account Based Marketing Study by SiriusDecisions, 42% of survey respondents said they had been using ABM for less than six months.
• A large and growing number of B2B marketers claim they are doing (or planning to do) ABM. In a survey last fall by Demand Metric, 71% of respondents said they are using ABM, testing ABM, or interested in adopting ABM.

The allure of account-based marketing is easy to understand. According to research by ITSMA, most B2B marketers believe that ABM produces a higher ROI that any other approach to marketing. Users of ABM claim that it provides several important benefits. In the Demand Metric survey mentioned earlier, a majority of ABM users said that it produces increased engagement with target accounts (83%), better sales/marketing alignment (69%), better qualified prospects (66%), more pipeline opportunities (55%), and increased conversion rates (55%).

There's a great deal of hype surrounding account-based marketing, and much of it is justified. However, the hype also tends to obscure or minimize some of the real-world challenges associated with doing ABM well. Successful account-based marketing requires a sound strategy, sufficient financial resources, the right mix of human skills, appropriate technology tools, a high level of cross-functional teamwork, and a long-term commitment.

Beginning in January, I'll be devoting several posts here to the challenging - and often under-appreciated - issues that can make or break an ABM program. In these posts, I'll discuss how to select and prioritize ABM target accounts, how to identify what resources you'll need to build and sustain a successful ABM effort, how to develop the insights regarding target accounts that are required for effective ABM, and how to create the level of customized/personalized content that's needed for ABM success.

These discussions aren't designed to dissuade anyone from adopting ABM. On the contrary, my goal is to provide insights that will help companies become ABM success stories.

Illustration courtesy of Rob Lee via Flickr CC.

The Most Effective Personalization is Invisible

Delivering outstanding experiences to existing and potential customers has become the prime strategic objective for most B2B and B2C marketers. In the 2016 Digital Trends Quarterly Intelligence Briefing by Econsultancy (in association with Adobe), surveyed marketers identified optimizing the customer experience as their most exciting opportunity.

Most marketers now recognize that the ability to personalize marketing messages and other marketing content is an essential requirement for providing great customer experiences. The authors of a 2016 report by the Economist Intelligence Unit (EIU) used a quotation from Kristin Limkau, the CMO of JPMorgan Chase, to highlight the importance that marketers place on personalization:  "Achieving personalisation at scale is the biggest and most important challenge for us to get right."

But despite the recent focus on personalized marketing, it's clear that marketers have more work to do to make it truly effective. Research has shown that many customers aren't particularly impressed by the personalization efforts they encounter. For example:

• In a survey by Adobe, 71% of consumers said they like receiving personalized offers, but 20% reported that offers are not done well, and another 20% said that personalization efforts are too intrusive.
• In other research by EIU, 70% of survey respondents said that many of the personalized messages they receive are annoying because the attempts at personalization are superficial, and 63% said marketing messages that use their name are so common that they have grown numb to the practice. In addition, only 22% of the respondents said that personalized offers are more likely to meet their needs than mass market offers.

Clearly, most of us want companies to provide personalized messages and content, but many of us are becoming more concerned about our privacy, and we feel that some personalization efforts are just plain creepy. When CEB recently asked a panel of nearly 400 consumers how "online ads that use details about what I have done" make them feel, almost three-quarters (73%) of the responses were negative, and almost half (49%) used synonyms for "creepy."

To avoid the "creepy" element and make personalized messages and content more engaging and effective, marketers must keep one critical principle in mind:  The most effective personalization is usually invisible. By invisible, I mean that the personalization is undetectable by the customer or prospect.

Since the early days of personalized marketing, the most common way to personalize a marketing message has been to include specific facts about the recipient in the message. Some examples would be the recipient's name, her job title, company affiliation, or information about a recent purchase. I call this practice explicit or overt personalization.

It's as if we marketers believe that the effectiveness of personalization comes from telling the customer or prospect what we know about him or her. There may have been some truth to this belief several years ago when personalization was still novel, but today, most types of overt personalization are ineffective at best, and can actually be seen as "creepy" by customers or prospects.

What our customers and prospects really want are offers, messages, and content that are relevant to their interests and needs - in other words, something that is useful or valuable. So, we marketers need to stop telling our customers and prospects what we know about them and start using that knowledge to craft marketing content that provides them real value and utility.

Image courtesy of Lisa Lowan via Flickr CC.

If a Prospect Fits, You Must Not Quit

The most critical component of a successful account-based marketing program is focusing your marketing and sales efforts on the right target accounts. Working with the right accounts isn't the only thing you need for success, but it will be impossible to build a successful ABM program if you target the wrong accounts.

Selecting target accounts is obviously an essential step when you are initially implementing ABM, but managing your list of target accounts is an ongoing task. Over time, it's inevitable that you'll need to add companies to, and remove companies from, your target account list. To make these decisions wisely, it's important to remember what makes a company an attractive target for ABM in the first place.

Most ABM practitioners select their target accounts by identifying businesses that resemble their best existing customers, an approach that's commonly called look-alike modeling. Look-alike modeling is usually effective because it will identify companies with the attributes that make them good targets for ABM.

The following diagram depicts the factors that make a prospect organization attractive for account-based marketing. At the most basic level, attractiveness is a function of high value potential and high buying potential. In other words, does the prospect have the potential to become a large and profitable customer for your company, and is there a strong likelihood that the prospect will purchase your product or service?

As the diagram illustrates, high buying potential is a function of two factors - fit and buying interest. The underlying idea of fit is suitability. Does your product or service effectively address a need or a challenge that the prospect is likely to have, and can your company effectively market to, sell to, and serve the prospect?

The second component of high buying potential is buying interest, which refers to whether a prospect has engaged in behaviors that show an inclination to evaluate or purchase the kind of product or service that your company offers. Indicators of buying interest include direct interactions between a prospect and your company, and other behaviors - usually online - that indicate the prospect may be interested in the kind of product or service your company provides.

Fit and buying interest are both important "markers" of high buying potential, but fit is far more important for ABM purposes, and here's why.

At any given moment in time, a large majority of your most attractive prospects - those with high potential value and good fit - will not be involved in an active buying process for the kind of product or service that you offer, and won't score well on buying interest. Therefore, if you put too much emphasis on buying interest when initially selecting your ABM target accounts, you will omit prospects that you should be targeting.

The same principle applies when you're managing your list of target accounts. At any given point in time, many of the companies on your list may not show significant indications of buying interest. That may mean they're not likely to buy in the near-term future, but it doesn't mean that they are unlikely to buy in the longer term. If you remove such companies from your target account list, you'll be abandoning the opportunity to influence the perceptions and preferences of future buyers.

Successful account-based marketing requires long-term thinking and consistency. The objective is to focus your marketing and sales efforts on those prospects that are likely to become large and profitable customers. Identifying prospects with a high level of buying interest can be valuable because it enables you to use a more appropriate mix of marketing and sales tactics. But when high potential value and good fit exist, an apparent lack of immediate buying interest doesn't justify removing an account from your ABM program.

Top illustration courtesy of Jason Taellious via Flickr CC.