Sunday, May 28, 2017

More Evidence Regarding Small Business Marketing Practices

A few weeks ago, I published a post that discussed some of the major findings of a survey conducted by Target Marketing magazine regarding the marketing practices of small and mid-size companies. Recently, Clutch (a B2B market research firm based in Washington, DC) published the results of its 2017 Small Business Digital Marketing Survey. Because these two studies addressed similar topics, I thought it would be interesting to compare and contrast their findings.

Both of these studies focused on smaller companies. In the Target Marketing survey - which produced 725 responses - 50% of the respondents were with companies having less than $5 million in annual revenue, and 22% were with companies having annual revenue of $5 million to $50 million.

In the Clutch survey - which produced 350 responses - 46% percent of the respondents were with companies having less than $1 million in annual revenue, and 26% were with companies having annual revenue of $1 million to $5 million.

Both studies indicate that marketing spending by most small companies will increase or hold steady in 2017. In the Target Marketing survey, 37% of respondents said their 2017 marketing budget would be higher than in 2016, and 40% said their budget would stay the same compared to 2016. In the Clutch survey, 49% of respondents said their marketing budget would increase in 2017, and 33% said it would remain flat.

Both surveys also asked participants how their spending on specific marketing methods would change in 2017. The following table shows the percentage of respondents in each survey who said they plan to increase spending on each identified method or channel. (Note:  The Clutch survey focused exclusively on digital marketing methods.)




























The Clutch survey also provides a couple of additional data points regarding small business marketing practices:

  • Over two-thirds of the survey respondents (68%) reported spending less than $100,000 on marketing and advertising in 2016, and 41% said they spent less than $10,000.
  • About half of the respondents (49%) have 1 or 2 employees working on digital marketing activities, while 28% said they have 3 or 4 digital marketing employees.
Top image courtesy of Jax House via Flickr CC.

Sunday, May 21, 2017

Marketing Best Practices Need Warning Labels


Business leaders of all kinds regard the identification and implementation of best practices as one of the most powerful management tools at their disposal. And why shouldn't they? It seems immanently reasonable to identify the practices of high-performing companies and then emulate those practices.

Marketing leaders are particularly enamored with best practices. After all, marketing success is difficult to achieve and even harder to sustain because the marketing landscape is always changing, and because it's incredibly hard to predict what marketing messages and methods will win the hearts and minds of potential customers. In these circumstances, it shouldn't be surprising that marketers are so fond of "proven" best practices.

Marketing best practices are often portrayed as effective and reliable tools for achieving marketing success, but the reality is somewhat more complicated. Best practices can be helpful when they are understood correctly and used appropriately. However, it's very easy for marketers to become enthralled with the purported benefits of best practices, and to forget about their limitations.

These days, many of the products we buy come with warning labels which highlight the bad things that can happen if we use the product incorrectly. Maybe marketing best practices should come with a set of warnings to remind marketers of their potential "dangers." I can think of several warnings that could be appropriate, but here are three that are particularly important.

Not Comprehensive

"WARNING:  Marketing success results from the interplay of numerous activities and conditions, not all of which are addressed in these best practices. Therefore, these practices may produce less-than-expected results if other factors required for success are absent."

Most marketing best practices are accompanied by an implicit or explicit claim:  Use these practices and your marketing performance will significantly improve. But here's the problem. Most collections of best practices relate to one aspect of marketing, while marketing success usually results from the combined effects of numerous factors, many of which the best practices don't address. Therefore, best practices never provide a truly comprehensive "formula" that will guarantee large-scale improvement in marketing performance.

And even if you assembled a comprehensive list of the marketing best practices that are relevant to your business, you still wouldn't have the magic formula because marketing success is affected by factors that are beyond the scope and control of marketing. These factors include activities in other areas of the business, economic conditions, the actions of competitors, and the unpredictable responses of potential customers. The bottom line is that best practices may be necessary for improving marketing performance, but they aren't sufficient to guarantee marketing success.

Widespread Use Reduces Effectiveness

"WARNING:  The widespread adoption and use of these best practices will reduce their effectiveness."

One of the most paradoxical characteristics of marketing best practices is that the more widely they are used, the less effective they become. Marketing best practices derive their effectiveness from several sources. A practice can be effective because it is based on sound business principles, or because it resonates with how potential customers make decisions, or because it leverages the capabilities of a particular medium of communication.

But best practices are also highly effective because they are usually exceptional. When a best practice is new, it tends to be used by a relatively small number of companies. Therefore, the practice stands out in the marketplace and more effectively captures the attention of potential customers. The distinctiveness also serves to differentiate the company using the practice from its competitors.

Unfortunately, as more and more companies adopt and use a best practice, it loses the distinctiveness that made it highly effective. Content marketing is a great example of a marketing practice that is now more challenging because it is so widely used.

Based on Hindsight

"WARNING:  These best practices have been identified by evaluating past results, and they may be less effective in the future. Past performance is not a reliable indicator of future results."

Best practices are always based on hindsight. We don't identify a principle or technique as a best practice until we have a fairly significant track record of performance. But as we all know, the marketing environment is constantly evolving. New technologies are appearing at a breathtaking pace, and many of those technologies enable marketing practices that were previously unheard of. Meanwhile, customer expectations are also rapidly changing.

Under these circumstances, marketers should view all best practices as "temporary" and always be alert for developments that may require a change of marketing methods or techniques. It's an overstatement to say that all best practices are obsolete by the time they are recognized as "best." But it's equally wrong to assume that today's best practices will remain unchanged for very long.

Use With Caution

Marketing best practices can help you improve marketing performance and achieve marketing success. But they must be used with caution.

Image courtesy of Travis Wise via Flickr CC.

Sunday, May 14, 2017

Getting Started With Customer Journey Maps


Delivering great experiences to existing and potential customers is rapidly becoming a vital source of competitive advantage for many B2B companies. Recent research indicates that most B2B companies expect to be competing primarily on the basis of customer experience in the very near future.

The starting point for improving customer experiences is understanding what interactions are occurring with customers and potential customers, and how useful and satisfying those interactions are from the customer's perspective. A growing number of companies are using customer journey maps to create a visual representation of the interactions that affect customer experiences.

Customer journey maps can serve many purposes, and as a result, they come in a wide variety of forms. If you want to get a feeling for how much variety exists, just run a Google image search for "customer journey map."

There's a wealth of information about building customer journey maps. Over the past few years, customer journey mapping has been the topic of dozens, if not hundreds, of books, articles, white papers, and blog posts. These content resources often take different approaches to customer journey mapping, and that, combined with the many uses of customer journey maps, can make the process seem extremely intimidating.

There are, however, several things you can do to make the process more manageable, especially if you're just getting started with customer journey mapping.

First, it's important to remember that the mapping process - when it's done the right way - is actually more valuable than the maps themselves. Dwight Eisenhower made this point about military plans when he said, "Plans are worthless, but planning is everything." To create accurate customer journey maps, it's essential to gather and use customer input, and this gives you the opportunity to see your business through the eyes of your customers.

Second, customers will actually have several journeys over the course of their relationship with your company. Don't attempt to address all of these journeys in one mapping project. Work on one journey at a time, and focus on getting that one right.

When companies are just beginning their journey mapping efforts, I usually recommend that they focus on post-purchase journeys. There's a lot of buzz these days about using journey maps to support marketing and sales efforts. These kinds of maps cat certainly be valuable, but post-purchase journeys tend to be more concrete and thus easier to map. Plus, it's usually easier to obtain input from existing customers.

Finally, it's important to clearly define your objectives before you begin to create a customer journey map. To improve customer experiences, the most important thing to understand is what your customers are trying to accomplish when they interact with your company. Therefore, it's important to describe each journey in terms of the customer's objective. In other words, define your customers' journeys by asking:  What jobs are our customers trying to get done when they interact with our company?

Once you've answered this question, you can begin the process of improving customer experiences by answering a second question:  How can we make it easier, faster, and/or cheaper for customers to get these jobs done?

One final thought. Mapping customer journeys is not a one-time job. You will need to validate and possibly update your customer journey maps on a regular basis, at least once a year.

Illustration courtesy of Jenny Cham via Flickr CC.

Sunday, May 7, 2017

Why Marketing Leaders Must Connect the Dots


In a recent article for dmnews.com, Mike Colombo, the CMO of Cloudwords, argued that many CMOs aren't ready for a seat at the C-suite table. According to Mr. Colombo, many CMOs aren't winning a seat at the "grown-up" table because they're still relying on performance metrics that are inconsequential to company leaders.

Recent research has confirmed that many marketers aren't doing a great job of communicating the value that marketing contributes to the business. In the 2016 Marketing Performance Management Benchmark Study by VisionEdge Marketing and Demand Metric, only 23% of survey respondents said their CEO would give marketing a grade of "A" on its ability to demonstrate its value and contribution to the business.

A disconnect between marketing and the rest of the C-suite can exist if CMOs don't clearly communicate the relationship between marketing programs and the business outcomes that matter to other C-suite executives. Most marketing leaders tend to focus on the programs they're running and the direct results of those programs (response rates, downloads, pageviews, etc.). The problem arises when these direct program results aren't linked to the high-level objectives that C-level executives really care about.

The ultimate mission of marketing is to drive revenue growth. Virtually all companies have a revenue growth goal as one of their top-line strategic business objectives. Many companies also have specific goals for new customer acquisition, customer retention and growth, and market share, but these objectives are all directly related to revenue growth. Therefore, every marketing activity is (or should be) designed to generate (or contribute to the production of) revenue.

To effectively communicate the connection between marketing activities and revenue, marketing leaders must develop a revenue growth strategy, which, at its most basic level, is a hypothesis that describes how the company will grow revenue. A revenue growth strategy is essentially a big if-then statement that says, "If we execute these specific marketing programs, then we will meet our revenue growth objectives."

However, many marketing activities don't directly produce revenue. Some marketing activities are several steps removed from the realization of revenue, but they are essential components of the revenue generation process. Therefore, a revenue growth strategy is a set of if-then statements, each of which describes a specific marketing activity and the anticipated results of that activity. These individual if-then statements are then combined to create chains of cause-and-effect relationships that connect individual marketing activities to the realization of revenue.

A simplified version of one of these cause-and-effect chains might look something like this:

  • If we publish a blog that offers readers access to compelling content resources, then more potential buyers will identify themselves and consume our content.
  • If more potential buyers identify themselves and consume our content, then we will generate more qualified sales leads.
  • If we generate more qualified sales leads, then we will create more legitimate sales opportunities.
  • If we increase the number of legitimate sales opportunities, then we will close more sales.
  • If we close more sales, then we will produce more revenue, and that will help us reach our revenue growth objectives.
In short, CMOs can fail to earn a seat at the C-suite table if they don't "connect the dots" between marketing programs and revenue growth. To create and sustain credibility with other senior company leaders, CMOs must understand the links between individual marketing activities and revenue growth, and they must make those links visible to the CEO and other members of the C-suite.

For more on this topic, take a look at Laura Patterson's recent article at MarketingProfs

Illustration courtesy of Lisa Plummer via Flickr CC.

Sunday, April 30, 2017

The Magic of "Job-Focused" Content


When Theodore Levitt taught marketing at the Harvard Business School, he frequently reminded his students that "People don't want to buy a quarter-inch drill. They want a quarter-inch hole." The point Professor Levitt was making is that people don't usually buy a product or service because they want the product or service itself. What they really want is what the product or service will help them accomplish.

In The Innovator's Solution, Clayton Christensen built on Professor Levitt's idea to describe what is called the jobs-to-be-done framework. The basic idea of this framework is that when people become aware of a "job" they need to get done, they look for a product or service they can "hire" to perform the job.

Christensen argues that this is how customers "experience life." Their thought processes begin with an awareness that they need to get something done, and then they seek to hire something or someone to do the job as effectively, conveniently, and inexpensively as possible.

The attributes of the jobs that people are needing to get done constitute the circumstances in which they buy. Therefore, Christensen says, the jobs-to-be-done framework can enable company leaders to reliably predict what features and functionality will cause people to buy a product or service.

The jobs-to-be-done framework is often used to guide the process of developing new products and services, but it also has implications for marketing. What it tells us is that one key to effective marketing is to focus the majority of our marketing messages and content on the jobs our potential buyers need to get done. 

To create compelling "job-focused" messages and content, marketers need a thorough understanding of the jobs their potential buyers are trying to get done. Specifically, marketers need to know:
  • What the specific jobs are
  • Why the jobs are important
  • What happens if the jobs don't get done
  • How potential buyers are trying to perform the jobs - what tools and processes are they using
  • What is preventing prospects from getting the jobs done effectively and efficiently - what are the limitations and shortcomings of their existing tools and processes
Using content that is built around the jobs that your buyers are trying to get done provides several important benefits:

  • Content that can help buyers get an important job done is more likely to earn their attention and engagement because it provides meaningful value.
  • When you use the jobs-to-be-done framework to guide your content marketing program, content development efforts become more focused, and less time is wasted creating content that won't resonate with potential buyers.
  • Job-focused content typically has a longer shelf life. As long as the identified job exists, the content relating to that job will remain valuable and useful. While job-focused content does need to be reviewed and possibly updated on a regular basis, the longer shelf life can ease the content development burden.
  • In many cases, multiple members of the buying group will need to get the same job done. Therefore, job-focused content can often be used with several buyer personas. And such content can be easily customized for each relevant persona. Plus, by identifying the jobs that multiple buyers have in common, job-focused content can help the buying group reach consensus.
It's abundantly clear that content marketing success is becoming more difficult to achieve. Using content that buyers will instinctively see as meaningful and valuable will increase your odds of success, and the jobs-to-be-done framework can help you develop such content.

Illustration courtesy of Mufidah Kassallas via Flickr CC.

Sunday, April 23, 2017

What the Subscription Economy Means for B2B Marketers


One of the most profound business developments of the past few years has been the proliferation of companies using subscription-based business models. Of course, subscription-based businesses aren't new. We've been subscribing to newspapers and magazines for decades. What is new is that more and more kinds of goods are being repackaged as services and sold on a subscription basis.

The rapidly growing number of companies that offer "software-as-a-service" is probably the most prominent example of this phenomenon. Software applications that were once sold for a fixed price and distributed via CD's or Internet downloads are now sold on a subscription basis and accessed and used via the cloud. Think Salesforce, Office 365, and B2B marketing automation solutions. The media industry has also been disrupted by companies using subscription-based business models. Think Spotify and Netflix.

What really makes the subscription economy a profound business development is the range of products that can be sold on a subscription basis. GE offers a subscription model for its jet engines. Caterpillar is said to be moving toward selling metric tons of earth moved rather than earth moving equipment. I (and you) can "subscribe" to razors (Dollar Shave Club), groceries (Blue Apron), and even automobiles (Zipcar).

The subscription economy appears to be growing rapidly, and many subscription-based businesses are performing well. A recent study by MGI Research suggests that the subscription economy could exceed $100 billion by 2020. And a recent analysis by Zuora (a provider of software for subscription-based businesses) found that since the beginning of 2012, the sales of subscription-based businesses are growing nine times faster that sales of companies in the S & P 500, and more than four times the rate of US retail sales (including e-commerce).

So, what does the shift to subscription-based business mean for B2B marketers? First and foremost, it means that marketers should focus more of their time and attention on customer retention and growth.

In a subscription-based business, most of the economic value of a customer is realized in installments, over time, rather than when the initial "sale" is made. Because of customer acquisition costs, new customers are invariably unprofitable, and they will not become profitable until they have been "subscribers" for some period of time. So in essence, customer profitability depends directly on the length of the customer relationship, as the following diagram shows.
















Most marketers will acknowledge the importance of customer retention and growth, but most companies are still focused primarily on customer acquisition. In a 2016 global survey of more than 1,000 marketers by Econsultancy in association with IBM Watson Marketing, respondents said that, on average, 55% of their revenues are delivered by customer acquisition activities, and 45% are achieved through customer retention activities.

Delivering great experiences to existing customers is obviously critical for companies that have subscription-based business models because of the dynamics of customer profitability. But the same pattern of customer profitability is also found in many kinds of companies that don't use a true subscription model.

In many types of companies, for example, the first sale to a customer will not be sufficient to make that customer profitable because of the marketing and sales costs that must be incurred to acquire the customer. Most of the profits will result from the customer's subsequent purchases of additional or ancillary products. Epson may have earned some profit when I purchased a new printer about a year ago, but they've almost certainly realized significantly more profits from the multiple ink purchases I've made over the past year.

These dynamics of customer profitability mean that marketers in virtually all kinds of B2B companies should be more focused on nurturing relationships with existing customers.

Top image courtesy of Rob Enslin via Flickr CC.


Sunday, April 16, 2017

B2B Buyers Are Still Skeptical About Vendor Content


A recent research report by TrustRadius paints a rather sobering picture of the effectiveness of B2B content marketing. The B2B Buying Disconnect is based on the results of two surveys. One was a survey of 418 individuals who played a key role in a significant software purchase during the previous two years, and the second was a survey of 190 individuals who worked for software vendors in a marketing or sales leadership capacity.

Although the TrustRadius study focused exclusively on technology buyers and sellers, the results would almost certainly be similar in other cases involving complex B2B products or services.

In the buyer survey, TrustRadius asked participants to select which sources of information they used during their purchasing process from a list of 12 options. Then survey participants rated each information source in terms of helpfulness and trustworthiness. The table below depicts where each source of information ranked across these three dimensions.























There are three primary takeaways from these rankings.

Buyers prefer resources that provide direct experience with the product or service - Survey respondents ranked product demos and free trials as very helpful and very trustworthy.

Buyers value information from third parties - Respondents described referrals from friends, colleagues, or peers as very helpful and very trustworthy. Buyers also ranked user reviews and customer references as very helpful, and they rated conversations with analysts and recommendations by solution consultants as highly trustworthy.

Except for product demos, buyers place little value on most types of vendor-provided information - Survey respondents rated vendor sales reps and sales presentations fairly high in terms of helpfulness, but low in terms of trustworthiness. Respondents ranked vendor or product websites and vendor collateral (e.g. ebooks, case studies, webinars) as the least helpful and least trustworthy sources of information.

These research findings should be a wake-up call for B2B marketers. In the 2017 edition of the B2B content marketing survey by the Content Marketing Institute and MarketingProfs, only 34% of B2B marketers rated their content marketing strategy as extremely or very effective. The comparable percentage was 30% in 2016 and 38% in 2015. The buyer attitudes captured in the TrustRadius study explain (at least in part) why only a minority of companies are achieving a high level of success with content marketing.

As marketers, we need to expect and accept that many potential buyers will view our content with a skeptical eye. To overcome this skepticism, we need to "go the extra mile" to create content that is objective and non-promotional, and most importantly, content that delivers real value to our potential buyers.

Top image courtesy of Terry Johnston via Flickr CC.