Sunday, October 15, 2017

Look First to Existing Customers When Selecting ABM Accounts

Account-based marketing is often described as an effective way to acquire new customers. And that description is accurate. But ABM is also a powerful tool for growing relationships with existing customers you can't afford to lose.

One reason for the growing popularity of account-based marketing is the widely-held belief that it can dramatically improve the productivity of customer acquisition activities and programs. Most of the content that's currently being produced about ABM emphasizes its use for winning new customers. What often gets lost in this hype is that many companies can realize big benefits by using ABM with (some of) their existing customers.

The importance of existing customers hasn't been lost on many seasoned ABM practitioners.

Why Use ABM With Existing Customers
There's a very practical reason for focusing ABM efforts on existing customers. Most B2B companies have a core group of customers that are critical to the company's well-being. In many companies, 5% of the customers produce 50% or more of the total revenue. In my work with dozens of B2B companies over the past 30 years, I've frequently seen revenue distributions that were even more skewed toward large customers, where 4 or 5 customers accounted for more than 40% of the total revenue.
Account-based marketing is also particularly appropriate for your high-value existing customers because you potentially have several advantages with existing customers that ABM can leverage. Many of these advantages relate to the quality of the "intelligence" that you have regarding existing customers. When you have been working with a customer for a reasonable amount of time, you will have (or should have) rich and detailed information regarding:
  • The specific business needs and challenges the customer is facing
  • The identities, preferences, interests, and concerns of the key stakeholders who influence the relationship between the customer and your company
  • How the key stakeholders currently view their relationship with your company
  • The customer's organizational structure and culture
When used properly, these insights provide the foundation for valuable, relevant, and compelling customer engagement programs. And because most of these insights develop over time as a result of multiple interactions, they effectively constitute "inside" information that "outside" competitors can't easily duplicate.
At a high level, ABM for existing customers and ABM for new customer acquisition are based on the same fundamental principles. But when ABM is used with existing high-value customers, it becomes an integral component of your company's strategic account management program. In a future post, I'll discuss the critical relationship between account-based marketing and strategic account management.

Image courtesy of Kate Ter Haar via Flickr CC.

Sunday, October 8, 2017

How Will You Grow in 2018?

With the fourth quarter of 2017 now underway, many B2B companies have already started their planning for 2018. Over the next several weeks, senior company leaders will be evaluating how their business is currently performing and setting goals for the coming year. Some of those goals will inevitably relate to revenue growth, and one thing is clear:  Marketing leaders are squarely on the growth hotseat.

In a 2016 global survey of CEO's and CMO's by Accenture Strategy, 50% of the CEO's said their CMO is primarily responsible for driving disruptive growth in their organization. About a third of the CEO's also said that the CMO is the first to go when growth targets aren't met.

To set realistic growth objectives for 2018, and to implement marketing programs that will effectively support those objectives, marketing leaders must have a clearly-defined revenue growth strategy. One critical - but often overlooked - step in developing a sound revenue growth strategy is identifying where growth will come from. Specifically, marketing leaders need to answer three basic questions during their planning process:

  1. What are the structural sources of revenue growth in our business?
  2. How much growth is each source currently producing?
  3. How much growth can we realistically expect to generate from each source next year?
I described the most common structural sources of revenue growth in an earlier post, so I won't repeat that discussion here. The following diagram depicts the sources of growth that exist in most companies:

How Much Growth is Each Source Currently Producing?
In this post, I'll discuss how to answer Questions 2 and 3. When I work with clients on business or marketing strategy projects, I use sales data from the client's ERP/accounting system to answer the second question. Here's a simplified example of how the analysis works.
Suppose that your company had total sales of $110 million for the 12 months ending on September 30, 2017. In this example, I'll call this 12-month period "2017." You had total sales of $100 million for the 12 months that ended on September 30, 2016. We'll call this 12-month period "2016." So, your company grew sales by $10 million during 2017.
For this example, let's suppose that your company did not acquire another business or introduce any new types of products in 2017. During 2017, your company did begin selling in a new geographic market. Under these circumstances, your primary sources of revenue growth in 2017 were base retention, increased sales to existing customers, sales to new customers in existing markets, and sales to new customers in new markets.
To quantify how much revenue growth each of these sources produced, you would use "sales by customer" data from your ERP/accounting system.
Base retention (revenue churn) - To measure the impact of revenue churn, identify the customers who bought from you in 2016, but did not buy from you in 2017. The total sales made to these customers in 2016 is the amount of revenue that was "lost" in 2017 due to revenue churn. For this example, let's say the amount of lost revenue was $1 million.
Increased sales to existing customers - Identify the customers who bought from you in both 2017 and 2016, and compare the 2017 total to the 2016 total. For this example, let's say that sales to existing customers increased by $3 million in 2017.
Sales to new customers in existing markets - Identify the customers who  bought from you in 2017 but did not buy from you in 2016. Then eliminate those customers who are based in the geographic market that you entered in 2017. The sales made to the remaining customers are sales to new customers in existing markets. Let's say this source accounted for $5 million of the 2017 revenue growth.
Sales to new customers in new markets - This is the total 2017 sales made to customers in the geographic market that you entered in 2017. Let's say this amount was $3 million.
The table below summarizes the results of this analysis and shows where growth in 2017 came from:

How Much Growth Can We Generate from Each Source in 2018?
Once you know where your current growth came from, you can use these insights to set more realistic and achievable growth objectives for the coming year. The key is to analyze why the current growth happened.
In our hypothetical company, for example, sales to new customers in existing markets produced $5 million, or 50%, of the total sales growth in 2017. One possible explanation for this growth is that the overall market for the company's products or services expanded in 2017. In other words, the growth may have resulted from being in "the right market at the right time." It's also possible that this growth occurred because the company took customers from competitors and increased its market share.
Either way, the important questions is:  How much future growth can the existing markets provide? If the existing markets still have substantial growth potential, the company will probably want to focus a significant amount of demand generation efforts on acquiring more new customers in these existing markets.

On the other hand, if those existing markets do not have significant future growth potential, the company will need a different strategy to drive growth. It may, for example, want to focus more demand generation efforts on acquiring new customers in the geographic market it first entered in 2017, or it may need to consider expanding into new geographic markets.
This type of analysis should be done for each source of revenue that contributed to current growth and for any new sources that are expected to contribute next year. Once this analysis is completed, you should set revenue targets for 2018 for each source of revenue that applies to your company. And once these revenue targets have been established, marketing leaders can begin to design marketing programs to achieve those objectives.

Top image courtesy of via Flickr CC.

Sunday, October 1, 2017

New Research Shows the Evolution of B2B Content Marketing

Last week, the Content Marketing Institute and MarketingProfs published the first report relating to their latest annual content marketing survey. B2B Content Marketing:  2018 Benchmarks, Budgets, and Trends - North America is based on the responses of 870 survey participants who said their company primarily sells B2B products or services. These respondents represented a wide range of industries and company sizes, and most held marketing-related positions.

The CMI/MarketingProfs survey has been conducted annually for several years, and therefore it's possible to see how content marketing attitudes and practices have changed over time. The following table shows some of the major findings from the latest survey and the comparable findings from the 2017 edition of the survey.

In general, these results indicate that content marketing is evolving in fairly predictable ways.

The Commitment to Content Marketing Remains Strong

Fifty-six percent of respondents in the 2018 survey said their company is extremely or very committed to content marketing. This was down from 63% in the 2017 survey, but I don't see this "drop" in commitment as particularly significant. As marketers gain experience with content marketing, their expectations become more realistic, and this can lead them to describe their commitment in a more "tempered" way.

Success with Content Marketing is Improving

In the 2018 survey, 24% of respondents described their company's overall approach to content marketing as extremely or very successful, up from 22% in the 2017 survey. In both surveys, a majority of respondents - 63% in 2018 and 62% in 2017 - said their content marketing efforts are now much more or somewhat more successful than they were a year earlier.

The Practice of Content Marketing is Maturing

In the 2018 edition of the survey, 34% of respondents rated the maturity of their content marketing efforts as sophisticated or mature. This was up from 28% in the 2017 survey. Many companies have been practicing content marketing now for several years, so it's not surprising that a growing number of marketers see their efforts as more mature.

The Continuing Need for Strategy

One of the disappointing findings in the 2018 survey is that only 37% of respondents reported having a documented content strategy. This percentage hasn't changed much for the past several years. It was 37% in 2017, 32% in 2016, and 35% in 2015. The CMI/MarketingProfs surveys have consistently shown that companies with a documented content strategy achieve greater content marketing success. In the 2018 survey, for example, 62% of the respondents who described their organization's content marketing efforts as extremely or very successful reported having a documented content strategy.

Top Image Source:  The Content Marketing Institute and MarketingProfs

Sunday, September 24, 2017

Research Says "Bullies" Dictate Most Buying Decisions

The conventional wisdom is that B2B buying decisions are made by buying groups that must reach a consensus. New research says the conventional wisdom may be wrong.

A recent study sponsored by DiscoverOrg and conducted by Steve W. Martin provides several interesting insights regarding the attitudes and behaviors of business buyers, and argues that B2B buying groups don't really operate the way we've come to believe.

Why Didn't They Buy? was based on an in-depth survey of over 230 business professionals who evaluate the products and services their companies use. Survey respondents represented a wide range of industries and business functions. Although this study was designed primarily with sales reps in mind, the findings will be valuable for B2B marketers. First, the noncontroversial stuff.


B2B marketing and sales professionals have long recognized that many business buyers are risk averse. They have a strong fear of taking risks, which means that the real unstated goal of the B2B buying process is to reduce fear by mitigating risks. Gord Hotchkiss captured the essence of this point several years ago when he wrote, "B2B buying decisions are usually driven by one emotion - fear. Specifically, B2B buying is all about minimizing fear by eliminating risk." (The BuyerSphere Project, 2009).

Mr. Martin's research confirms that most B2B buyers are risk averse, but it also shows that the degree of risk aversion varies across industries and business functions. To paraphrase George Orwell, all B2B buyers are risk averse, but some are more risk averse than others.

The study found that buyers in the fashion, media, and real estate industries have the highest tolerance for risk, while buyers in government, consulting, and healthcare are the most risk averse. In terms of business function, the study found that buyers in marketing and engineering have a higher tolerance for risk than buyers in accounting and IT.

Vendor Market Position

Being the recognized market leader provides significant advantages in most selling situations, but the DiscoverOrg study revealed that most business buyers aren't blindly committed to the market leader. When survey participants were asked about choosing an expensive product they would use every day, 62% of the respondents said they would pass on the most prestigious, best-known brand with the most functionality and the highest cost, and instead choose a fairly well-known brand with 85% of the functionality and 80% of the cost of the top-of-the-line product.

But, the importance of market leadership varies significantly across industries. The following table shows the percentage of buyers in nine industries who would buy the best-known, top-of-the-line product with the highest functionality and cost:

The "Bully With the Juice"

Without a doubt, the most controversial finding in the DiscoverOrg study is that in most B2B buying groups, one member of the group largely controls the decision making process. Mr. Martin states this conclusion emphatically in the study report:  "Of the hundreds of sales cycles I have analyzed, I've found that one member of the selection team is able to exert his or her will and determine the vendor selected." Martin calls this person the "bully with the juice."

Over 90% of the survey respondents said there is always or usually one member of the buying group who tries to influence the decision his or her way. And 89% of the respondents said this person is successful in getting his or her way "most of the time."

These findings run counter to the widely-held view (supported by an impressive amount of research) that B2B buying decisions are primarily made by consensus. For a good discussion of the conventional view, take a look at "Making the Consensus Sale" by Karl Schmidt, Brent Adamson, and Anna Bird in the Harvard Business Review.

Frankly, it's difficult to reconcile Mr. Martin's findings with the more conventional view. In my work with B2B companies over the past 30 years, I've acted as a "facilitator" for dozens of project teams. I can say without reservation that it's not uncommon for a team member with a strong personality and strong opinions to dominate the team's work, even when that's not his or her intention. So I can see how a buying group could be "led" by a dominant personality.

On balance, however, my experience is that buying decisions are made by consensus, especially when the purchase under consideration impacts multiple business functions, and when the members of the buying group are of about the same rank in the corporate hierarchy.

Top image courtesy of Global Knowledge Partnership via Flickr CC.

"Bully" image courtesy of Pimkle via Flickr CC.

Sunday, September 17, 2017

Surveys Show the Growing Commitment to Sales Enablement

SiriusDecisions recently published the results of its 2017 Sales Enablement Study. The 2017 research was based on a survey of 250 B2B sales enablement professionals representing 45 industries. This study was somewhat skewed toward larger B2B enterprises, with 43% of the survey respondents coming from organizations  with more than $750 million in annual revenue

Sales Enablement is Widespread

Overall, 66% of survey respondents reported having a dedicated sales enablement function, up from 61% in the 2012 edition of the survey. But the use of sales enablement is significantly greater in larger enterprises. Eighty-three percent of respondents from organizations with revenue of $750 million or more said they have deployed or plan to deploy a dedicated sales enablement team.

It's interesting to compare the results of the SiriusDecisions research with a recent survey conducted by CSO Insights. In its 2016 Sales Enablement Optimization Study, CSO Insights found that 37.7% of companies have a dedicated sales enablement function. This lower percentage is likely due to the demographics of the CSO Insights study. Only about 27% of the respondents in the CSO Insights study were with organizations having more than $250 million in annual revenue.

Sales Enablement is Clearly a Sales-Led Function

Both the SiriusDecisions study and the CSO Insights study show that sales enablement is now firmly established as a sales-led function. In the SiriusDecisions survey, 40% of respondents said that sales enablement reports directly to sales leadership, 25% said it reports to the CEO, and 13% said it reports to sales operations. Only 10% of respondents indicated that sales enablement reports to marketing leadership.

In the CSO Insights study, 60.8% of survey respondents said their sales enablement function reports to executive sales management, and another 20.9% said that it reports to sales operations. Only 7.6% of the respondents said that sales enablement reports to marketing.

Commitment to Sales Enablement is Growing

The SiriusDecisions research also found that the commitment to sales enablement is large and growing. Twenty-eight percent of the survey respondents said they have seven or more full-time employees working in sales enablement, but this increases to 43% for high-performing companies. (Note:  The study defines high-performing organizations as those reporting that 80% or more of their full-time sales reps achieved quota in the most recent fiscal year.)

Even more significant, nearly three-fourths (74%) of the respondents said they plan to increase spending on sales enablement during the next 12 months.

No Major Surprises

The findings of these two studies are not particularly surprising. After all, improving sales effectiveness has been a top priority for company leaders for the past several years, according to the annual sales performance optimization studies by CSO Insights.

It's also not surprising that sales enablement is a sales-led function in most companies. View properly, sales enablement is a multi-faceted function that encompasses several types of activities and processes, including sales process improvement, sales training, sales technology, and sales content development and management. So, it seems appropriate to manage the sales enablement function withing the sales organization.

Image courtesy of Daniel Oines via Flickr CC.

Sunday, September 10, 2017

How to Make Your Content More Credible, and Why That Matters

Credibility is the single most important attribute of great marketing content. Effective content must also be relevant and valuable, but if potential buyers don't see your content as credible, they won't give you credit for relevance or value. Here are two ways to increase the credibility of your content.

Several recent research studies have contained both good news and bad news regarding B2B content marketing. First the good news. It's clear that content plays a vital role in B2B buying decisions.

Now for the not-so-good news. Numerous studies have painted a rather bleak picture regarding the level of engagement that content is producing. For example:
  • In a 2016 survey of business executives by The Economist Group, respondents reported that, on average, they engage with only about 25% of the thought leadership content they see every day.
  • A 2016 study by Beckon found that the amount of content published by brands had tripled in the previous year, but that customer engagement had remained flat. The study also found that just 5% of the total content produced garnered 90% of the total customer engagements, meaning that 19 out of 20 content pieces generated little or no engagements.
There are several possible explanations for this disappointing level of content engagement. One is that the tremendous growth in content volume makes lower rates of engagement inevitable. In The Economist Group study, 82% of surveyed executives reported that the volume of content available has made them more selective in what they consume.
Another possibility is that buyers simply don't see much value in much of the content they encounter. In the Edelman/LinkedIn study, respondents said they gained valuable insights from content only about 44% of the time.
Credible Content is Essential
It's also clear that lack of trust is undermining the impact of content. In a recent survey of technology buyers by TrustRadius, survey participants were asked to rate the helpfulness and trustworthiness of 12 sources of information used in buying decisions. Respondents ranked vendor or product websites and vendor collateral (ebooks, case studies, webinars, etc.) as the least helpful and trustworthy sources of information.
The reality is, most business buyers are conditioned to treat the information they receive from potential vendors with a healthy dose of skepticism. They recognize that prospective vendors have an agenda that is likely to cause most vendor-supplied information to be suspect. In essence, most business buyers presume that vendor content is biased and not altogether trustworthy. The challenge facing B2B marketers is to develop content that can overcome this presumption.
The single more critical attribute of effective content is credibility. Yes, great content will be relevant to the buyer's interests and needs, and it will provide the buyer with useful and valuable information. But if prospective buyers don't see your content as credible, they won't give you credit for relevance or value.
Credibility, like trust, cannot be manufactured, but there are some steps you can take to increase the credibility of your content. Here are two of the most important.

Make It Authoritative

Credible content is authoritative. Therefore, it's important not to fill your content with unsubstantiated claims or assertions. Marketing content doesn't need to read like an academic journal or a legal brief, but the main points you make should be supported by sound evidence, preferably from recognized and reputable sources.

Business buyers have repeatedly made their preference for authoritative content clear:

  • In its 2017 Content Preferences Survey, Demand Gen Report asked survey participants what recommendations they would make to improve the quality of the content provided by B2B vendors. Seventy-six percent of respondents said use more data and research to support content.
  • In a 2016 survey of senior business executives by Grist, survey participants were asked what qualities they find most valuable in thought leadership content. The third highest ranking attribute was content that is evidence-based and contains robust data. The survey also asked participants what turns them off about content. Forty percent of respondents said unsubstantiated opinions.
Make It (Mostly) Non-Promotional

Credible content is primarily non-promotional. This is a particularly important attribute for content that's designed for early-stage buyers, many of whom will quickly dismiss content that contains even a hint of self-serving promotion.

Once again, B2B buyers have made their preference for non-promotional content clear. In a 2017 survey of business buyers by the Content Marketing Institute and SmartBrief, survey participants were asked to identify the most desirable qualities of the content they use to make buying decisions. The third most important attribute identified by survey respondents was content that "is more educational than promotional in nature."

"Promotional content" normally refers to content that's about a company or its products or services, but the term "promotional" describes the tone of content as much as the content subject matter. Content can be highly promotional in tone even when it's not about a company or specific products or services. And, it's possible to develop company- or product-related content that's not overly promotional.

One key to keeping your content non-promotional is to avoid hyperbole. The dictionary definition of hyperbole is "an exaggerated statement or claim not meant to be taken literally." Example:  "There was enough food at the party to feed an army." Unfortunately, marketing content often contains claims or assertions that border on being hyperbolic, and most buyers will instinctively view such claims or assertions as lacking credibility.

In most cases, content will be more persuasive if it is less promotional. When I develop content resources for clients, I have a simple way to determine if a resource passes the promotional "smell test." I ask myself this question:  If an independent and respected journalist were writing an article about this topic, would the tone and content of the article be similar to my resource?

Keep It Real

B2B buyers have spoken, and they've made it clear that they want vendors to provide content that is credible, relevant, and insightful. Potential buyers will see your content as more credible if you make it authoritative and non-promotional.

Image courtesy of Ron Mader via Flickr CC.

Sunday, September 3, 2017

Get the Basics Right to Deliver Great Customer Experiences

Today's customers clearly expect great experiences. But most of their expectations are focused on a few critical interactions. What most customers really want is fast and responsive service that addresses their needs, solves their problems, or makes their lives easier.

A recent study by the CMO Council and SAP Hybris provides several important insights regarding the kinds of customer experiences that consumers are really looking for. This research consisted of a survey of more than 2,000 consumers in the United States, Europe, and Canada. Although this study focused on consumers, it's likely that many of the findings are applicable to business buyers.

The CMO Council research revealed that consumers' expectations are high, but it also found that consumers tend to be fairly utilitarian when it comes to customer experience. What they really want from companies is fast and responsive service.

When the study participants were asked to identify the attributes of an exceptional customer experience, the top three choices were:

  1. "Fast response times to my needs and issues" (52% of survey respondents)
  2. "Knowledgeable staff ready to assist wherever and whenever I need it" (47%)
  3. "Rewards for my loyalty and recognition of how long I have been a customer" (42%)
It's equally important to see what survey respondents put at the bottom of their list of important attributes:
  • "Always-on automated service" (8% of respondents)
  • "Brand-developed social communities to connect with other customers" (9%)
  • "Multiple touchpoints that add value to my experience" (10%)
  • "Recognizing my history with the brand at every touchpoint" (12%)
Survey respondents also identified their major customer experience frustrations:
  • 36% are angry about not being treated like the loyal customers they are
  • 33% said slow service or dealing with reps that know nothing about past history or purchases
  • 27% said not being able to reach someone who can actually help
The CMO Council also found that most consumers are willing to share some personal data with companies so long as they receive value in exchange. And consumers are clear about what constitutes value. They want something that saves them money (77% of respondents), saves them time (49%), or makes their life easier (47%). What they don't value is something that connects them with other customers (5%), makes them feel happy (9%), or "celebrates" them (13%).

Overall, the findings of this research indicate that significant opportunities exist to improve customer experience by focusing on a relatively small number of critical customer interactions. Those basic "moments that matter" have a disproportionate impact on how customers feel about their experience.

Image courtesy of Ricardo Mangual via Flickr CC.

Sunday, August 27, 2017

Why You Need to Be Careful With One Feature of the New Demand Waterfall

The new SiriusDecisions Demand Unit Waterfall has received lots of accolades since its introduction this spring, and the accolades are richly deserved. But one of the new demand stages should be labeled Use With Caution.

In May, SiriusDecisions unveiled the latest iteration of it venerable Demand Waterfall with great fanfare. SiriusDecisions calls the new version the Demand Unit Waterfall, and it's depicted in the following diagram:

Source:  SiriusDecisions

The first version of the Demand Waterfall was introduced in 2006, and over the past decade, thousands of B2B companies have used the waterfall model to track and manage their demand generation efforts. So it shouldn't be surprising that the introduction of the Demand Unit Waterfall has generated quite a bit of interest in the B2B marketing world. Here's a small sample of the reactions from pundits and practitioners:

For an in-depth discussion of the new Demand Unit Waterfall, I recommend that you watch the recording of this SiriusDecisions webinar.

The early reaction to the Demand Unit Waterfall has been overwhelmingly positive, and I agree with those who say that it more accurately reflects the realities of B2B demand generation.

  • By focusing on demand units, the new waterfall recognizes that most B2B buying decisions are made by groups of people, not by individuals.
  • By eliminating the waterfall stages that focused on the sources of individual leads and on the "ownership" of demand generation activities, the new waterfall implicitly recognizes that demand generation has become a team sport that involves marketing, business development, and sales throughout the whole process.
Use Caution With "Active Demand"
My biggest reservation about the new Demand Unit Waterfall is the possible implications of the Active Demand stage. SiriusDecisions defines Active Demand as the demand units that are showing evidence of acute need or buying intention. In other words, Active Demand refers to demand units that are currently "in-market" for the type of solution you sell.
SiriusDecisions analysts are suggesting that companies should focus their outbound demand generation activities on in-market prospects. Not surprisingly, this is the approach also advocated by many providers of B2B predictive analytics software.
This approach may work for some types of B2B companies, but it won't work for all. Here's why.
The identification of in-market prospects relies heavily on the use of intent data, which is data regarding the online behaviors of potential buyers. Intent data - particularly third-party intent data - can be valuable for some types of B2B companies, but it can be almost useless for others. To learn more about the limitations of intent data, take a look at this post by Jingcong Zhao at the Marketo blog, this post by Todd Berkowitz at the Gartner blog, and this white paper by Infer.
The bottom line is, business and marketing leaders should be cautious about relying on their ability to accurately identify in-market buyers. And they should be particularly cautious about focusing all - or even most - of their marketing efforts on such buyers. I've discussed this issue in two earlier posts. If you'd like to see my view on this issue, take a look at Why B2B Marketers Need to Care About "Casual Learning" and Why Marketers Shouldn't Go All In on In-Market Buyers.

Sunday, August 20, 2017

Say What? Producers of Thought Leadership Undervalue Its Impact

Business buyers broadly agree that thought leadership content has a significant impact on their purchase decisions at every stage of the buying process. But they consistently rate the impact of their organization's thought leadership content substantially lower.

That is one of the more ironic findings of a recent study by Edelman and LinkedIn. How Thought Leadership Impacts B2B Demand Generation was based on a survey of 1,329 business decision makers representing a wide range of industries and company sizes. Fifty-one percent of the survey respondents worked for organizations that produce thought leadership content.

The goal of this study was to better understand how thought leadership content impacts B2B purchase decisions. So, Edelman and LinkedIn asked survey participants several specific questions about how thought leadership affects their own purchase behaviors. Survey participants whose companies produce thought leadership content were also asked comparable questions about the impact of their organization's content on the buying behaviors of their potential customers.

The following table shows how survey respondents evaluated the impact of thought leadership content on various aspects of the B2B demand generation process. In this table, "Thought Leadership Producers" refers to survey respondents who said their company uses thought leadership content in its marketing efforts. The study report indicates that these respondents were "typically marketers and communicators within an organization."

As this table shows, there are several significant differences between how decision makers view the impact of thought leadership on their attitudes and behaviors as buyers, and how they perceive the impact of their organization's thought leadership content on their potential customers. For example, 45% of decision makers said that thought leadership had directly led them to award business to a company, but only 20% of producers said that thought leadership content had helped them win business.

The authors of the study report contend that producers of thought leadership content tend to underestimate its impact on influencing sales. They write, "Beyond its ability to drive awareness, very few creators of thought leadership . . . ascribe downstream marketing and sales impact to their own thought leadership efforts."

It's likely that many business and marketing leaders are underestimating the impact of their company's thought leadership content, and it's easy to understand why this can happen. It's not hard for someone to recognize how good thought leadership content has affected his or her personal buying attitudes and behaviors. It's more difficult for a marketing organization to accurately measure the impact of thought leadership content on its potential customers.

The Edelman/LinkedIn research clearly shows that outstanding thought leadership content can make a significant impact on potential buyers at every stage of the buying process. So marketers need to be sure they aren't underestimating its value and impact.

Top image courtesy of mags via Flickr CC.

Sunday, August 13, 2017

B2B Customer Experience Still Requires a Human Touch

Customer experience is the new competitive battleground in B2B, and many companies are making big investments to deliver great experiences via digital channels. But, company leaders must remember that great customer experiences still need a deft human touch.

Providing great experiences to existing and potential customers has become a competitive necessity for all kinds of companies. It's also abundantly clear that most of us now rely extensively on digital technologies to consume information and communicate for both personal and business purposes. Therefore, many business leaders now view providing great customer experiences via digital channels as a top strategic priority.

While "digital customer experiences" are obviously important, human interactions still play a vital role in customer experience delivery, particularly for B2B companies. In fact, recent research indicates that business customers highly value the human component of the customer experience.

Earlier this year, KPMG Nunwood Consulting published a report discussing several important aspects of B2B customer experience. The report was based on a survey of 2,974 members of decision making units in B2B companies. Survey respondents included end Users, Influencers, and Decision Makers, and all were located in the US or the UK.

Not surprisingly, the research found that customer experience plays a vital role in competitive success. Three-fourths of the survey respondents considered customer experience as a major factor in supplier choice. The research identified six "pillars" that describe the psychology of customer experience, and the report argues that the key to customer experience success is preparing for the critical "moments that matter" across a customer's life cycle.

The study also addressed the role of the relationship manager in delivering great customer experiences, and the report identified four major relationship management models.

  1. A relationship manager owns the customer relationship, and that individual is the customer's primary, if not exclusive, contact.
  2. A relationship manager is the primary customer contact, but he or she has a supporting team that is involved in delivering experiences to the customer.
  3. The customer has a team of individuals at its disposal to provide support, but there is no single "owner" of the customer relationship.
  4. The company uses a fully automated solution - no human interaction is required.
The survey report states that "[customers] frequently prefer to have one person to deal with and have them acting as their ambassador - the one person in the organisation that champions their interests and ensures that the services are provided to them in the highest standard." 

Specifically, the research found that Influencers perceive the "sole relationship manager model" to be 19% better performing than the account team model. Decision Makers said the sole relationship manager model is 5% better, and Users said it is 9% better.

The most important lesson from this research is that great B2B customer experiences often require a human touch.

Image courtesy of Yoel Ben-Avraham via Flickr CC.

Sunday, August 6, 2017

Beware! Thought Leadership is a Double-Edged Sword

There's no safe middle ground with it comes to thought leadership. It's a classic double-edged sword. Great thought leadership makes a positive impact on buyers at every stage of the buying process. Poor thought leadership, on the other hand, will result in lost business opportunities.

These are some of the major findings of a recent study by Edelman and LinkedIn. How Thought Leadership Impacts B2B Demand Generation was based on a survey of 1,329 business decision makers representing a wide range of industries and company sizes. Fourteen percent of the respondents were C-level executives, and another 43% had titles of Vice President or Director.

Like several other studies, the Edelman/LinkedIn research revealed that business buyers view thought leadership as important and spend considerable time consuming it. Nine out of ten survey respondents said that it is important or very important/critical for companies to produce thought leadership that provides a vision or point of view on important issues. About half (49%) of C-level respondents said they spend an hour or more per week reading and/or viewing thought leadership.

The Good News

Many B2B marketers have long believed that thought leadership content can be an effective tool for creating awareness and competitive differentiation. The Edelman/LinkedIn study shows that great thought leadership content has positive impacts at every stage of the buying process. For example:

  • Forty-four percent of respondents said that engaging with a company's thought leadership content can cause them to provide their contact information to the company for follow up, and 31% said that it can prompt them to reach out to the company to follow up on some of the points raised in the content.
  • Fifty-two percent of respondents said that looking through a company's thought leadership content is one important way they "vet" a company that they are thinking about working with.
  • Thought leadership content led 41% of C-level respondents to include a company in an RFP.
  • Over 80% of respondents said that a company's thought leadership content could increase their trust in the company.
  • Nearly half (48%) of C-level respondents said that a company's thought leadership content had directly led them to decide to do business with the company. 
The Bad News
So, the Edelman/LinkedIn research shows that thought leadership content can be a powerful demand generation tool, but it also shows that thought leadership is a double-edged sword. When it's done poorly, it has significant negative impacts on a company's demand generation performance. For example:
  • More than half (53%) of C-level respondents said they have lost respect and admiration for a company because of its poor thought leadership content.
  • Over a third (35%) of C-level respondents said that a company's poor thought leadership content had directly led them not to do business with the company.
The Lesson
The most important lesson for B2B marketers from the Edelman/LinkedIn research is this:  If you plan to use thought leadership content in your marketing effort, make sure that you invest enough time and money to develop thought leadership content that's truly valuable to your target audiences. Poor thought leadership content can be worse than none at all.

Image courtesy of Soren Niedziella via Flickr CC.

Sunday, July 30, 2017

Why B2B Buying Cycles are Getting Longer

New research reveals what influences B2B buying decisions and explains why the B2B buying process is getting longer.

Earlier this month, Demand Gen Report published the findings of the 2017 B2B Buyer's Survey. The 2017 research was based on a survey of 283 C-level executives, VPs, and Directors across several B2B industries. Each respondent in this study was qualified to have been involved in a B2B purchase decision within the 12 months preceding the survey.

The 2017 survey findings reveal that B2B buyers' journeys are becoming longer and more complex. Fifty-eight percent of respondents said that the length of their purchase cycle had increased compared to a year earlier, while only 10% said that the length had decreased.

Other findings explain why the buying cycle has gotten longer.
  • 52% of respondents said the number of buying group members had increased significantly.
  • 77% agreed that they conduct a more detailed ROI analysis before making a purchase decision.
  • 78% agreed that they "spend more time researching purchases."
  • 75% agreed that they "use more sources to research and evaluate purchases."
The 2017 study also found that content continues to play a vital role in B2B buying decisions. When surveyed buyers were asked why they selected the winning vendor over others, 75% said that the winning vendor's content had a significant impact on their choice, and 89% said that the winning vendor "provided content that made it easier to show ROI and/or build a business case for the purchase."

The Demand Gen survey also asked participants to rate how important eleven factors became once they were at the point of evaluating a set list of possible vendors. The table below shows the percentage of respondents who rated each factor as very important.

Research regarding the attitudes and behaviors of business buyers can be extremely valuable to B2B marketing and sales professionals. However, it's always important to examine the details of any research study and ask how applicable the findings are to your business.

For example, the respondents to the Demand Gen survey represented a variety of industries and a mix of company sizes. However, more than half (53%) of the purchase decisions those respondents participated in involved computer software, and another 16% involved IT hardware. So, this study is particularly relevant for companies that sell software solutions and other technology products, but some of the specific findings may be less relevant if your company sells other types of products or services.

Top image source:  Demand Gen Report

Sunday, July 23, 2017

Cracking the Code on Revenue Growth

Marketing leaders are increasingly on the hook for growth, and to meet this demand, they must understand how growth happens and where it originates. This post describes the wellsprings of revenue growth that any company can tap.

Today more than ever, marketing leaders are expected to develop strategies and execute programs that will drive revenue growth. In a 2016 global survey of 535 CEOs and 847 CMOs by Accenture Strategy, 50% of the CEOs said their CMO is primarily responsible for driving disruptive growth in their organization. CMOs were ranked ahead of all other C-level executives, including the CEO, the chief strategy officer, and the chief sales officer.

But this responsibility comes with a downside. About a third of the CEOs said the CMO is the first to go when growth targets aren't met.

Since marketing leaders are clearly on the growth hotseat, it's critical for them to understand the dynamics of revenue growth - how it happens or, more accurately, where it originates. There are, in fact, several distinct sources or wellsprings of revenue growth. These structural sources of growth are not dependent on the way a company is organized or on the types of products or services it sells. Instead, they are based on the business and marketing strategies that a company uses to tap into each source.

As you might expect, this topic has been discussed in management and marketing circles for a long time. In a 1957 article for the Harvard Business Review, Igor Ansoff identified four structural sources of revenue growth and four related types of growth strategies:

  1. Sales of existing products in existing markets (market penetration strategy)
  2. Sales of existing products in new markets (market development strategy)
  3. Sales of new products in existing markets (product development strategy)
  4. Sales of new products in new markets (diversification strategy)
In a 2004 article in the Harvard Business Review, Michael Treacy and Jim Sims identified five structural sources of revenue growth:
  1. Continuing sales to existing customers (base retention)
  2. Sales won from the competition (market share gain)
  3. New sales in an expanding market (market positioning)
  4. Sales from expanding into related markets (adjacent market expansion)
  5. Sales from expanding into new, unrelated lines of business (diversification)
Both of these models are insightful, and I've used both when working with clients on business and marketing strategy projects to frame our discussions about how to grow. But over the years, I've expanded on these models to create a more detailed framework of the alternative ways to generate growth. The current version of my framework is depicted in the following diagram:

This framework can be a good tool for stimulating your thinking about how to grow your business. When using the framework, however, it's important to keep a couple of things in mind. First, no single source of growth is likely to provide all of the revenue you need to reach your growth objective. And second, you'll need a distinct game plan to extract the maximum volume of revenue for each source of revenue you choose to pursue.

Producing consistent revenue growth is always a difficult challenge. The good news is that these structural sources of growth are always present. Their existence isn't dependent on the market conditions a company is facing at a particular moment in time, although the volume of revenue that a company can get from each source is greatly influenced by the market and competitive environment. The job of business and marketing leaders is to combine these sources of growth to fit their unique situation.

Illustration courtesy of Paul Lancaster via Flickr CC.

Sunday, July 16, 2017

Why Your Content Marketing Needs an Easy Button

Two recent surveys by Demand Gen Report highlight the importance of making it easy for potential buyers to find and access marketing content. Most B2B companies are already using content marketing in some form, so the challenge now is to make content marketing efforts as effective as possible. As it turns out, making content easier to find and access is an important key to content marketing effectiveness.

A successful content marketing program requires several components. Having high-quality content is obviously a given. In addition, it's important to have a sound and documented content marketing strategy, and it's necessary to support the content marketing effort with adequate human and financial resources.

In the drive to improve content marketing effectiveness, it's easy to focus on the "big" issues like content quality and content strategy, and to lose sight of some of the "basic" prerequisites of a successful content marketing program. One of those basic requirements is that content resources must be easy for potential buyers to find and access.

The 2017 Content Preferences Survey by Demand Gen Report shows why findability and easy access are so important. This survey produced 189 responses from buyers of B2B products and services.

The 2017 survey revealed that B2B buyers depend heavily on content to support buying decisions. Forty-seven percent of survey respondents said they were relying on content more than they did a year earlier. The survey also revealed that buyers are extremely busy and are feeling overwhelmed by the volume of content they encounter.

  • Thirty-four percent of respondents strongly agreed that they had "less time to devote to reading/research" in the past year. That's up from 16% in the 2016 edition of the survey.
  • Forty-six percent of respondents strongly agreed that they feel "overwhelmed by the amount of content available." That's up from 38% in 2016.
Given the abundance of available content, it's highly likely that time-constrained B2B buyers will gravitate to those companies that make it easy to find and access content resources.

Other research by Demand Gen Report shows that many marketers need to improve content findability and make access to content easier. Why Your Website Fails Buyers was based on a recent survey of 196 marketers, and it revealed that delivery of relevant content is a major issue for many companies.

In this survey, less than half (48%) of respondents said they house all of their customer-facing content in a centralized resource center, which would make content easier to find. Survey respondents acknowledged that it can be difficult for their prospects to locate and access relevant content. When asked to rate the accessibility of their content on a scale of 1 ("nearly impossible") to 5 ("extremely easy"), 59% of respondents rated accessibility at 3 or below.

Providing related content resources in "packages" makes it convenient for buyers to consume that content at their own pace. However, only 14% of respondents said they create packages of content assets that are aligned with the stages of the buying process. This represents a major disconnect with buyers because in the content preferences survey discussed earlier, 58% of surveyed buyers recommended that marketers package related content resources together.

The bottom line? B2B marketers need to make it as painless as possible for time-starved buyers to find and consume their content.

Image courtesy of Mike Mozart via Flickr CC.

Sunday, July 9, 2017

How to Reinforce the Status Quo

In an earlier post, I explained why companies need different marketing content for customer acquisition vs. customer retention. Put simply, when the objective is customer acquisition, your content needs to weaken the grip of the status quo and convince your prospects to make a change. When the goal is customer retention, the exact opposite is true. You need to emphasize the attractiveness of the status quo so that your customers won't want to make a change.

The status quo occupies this central role because of the status quo bias, which can be defined as a cognitive bias that causes humans to prefer the status quo for non-rational reasons. In order to develop marketing content and messaging that will reinforce the status quo, we first need to understand what causes us to have a bias for the status quo.

What Causes the Status Quo Bias?

Psychologists demonstrated the existence of the status quo bias in numerous experiments beginning in the 1980's. Since then, several psychologists and behavioral economists have attempted to identify the specific underlying cause or causes of the bias. So far, the evidence suggests that the status quo bias is largely a result of other biases in human decision making. For example:
  • Daniel Kahneman argues that the status quo bias is related to loss aversion. He contends that most people make the status quo their mental reference point and tend to view change from the status quo as a loss. Because we perceive and weigh losses greater than potential gains, we become loss averse, which makes us inclined to stay with the status quo.
  • Richard Thaler has argued that the status quo bias results from a psychological phenomenon called the endowment effect, which refers to the fact that most people like and value something more simply because they already own it. The endowment effect causes us to overvalue the benefits of the status quo and to under-appreciate its disadvantages.
  • Some psychologists have attributed the status quo bias to a human desire to avoid or delay difficult or complicated choices, and there is evidence showing that people are more likely to stick with the status quo when the alternatives are difficult to evaluate or compare.
How to Reinforce the Status Quo

Your marketing content and messaging can reinforce the status quo in several ways:
  • By documenting the benefits that the customer has already realized by acquiring and using your product or service, and communicating those benefits to the customer
  • By identifying the future benefits that the customer can realize by continuing to use your solution
  • By making the costs of switching to a different product or service visible and tangible to the customer
  • By identifying the risks the customer will face if it switches to a different product or service
  • By highlighting the difficulty and complexity of evaluating and selecting an alternative product or service
How to Make the Job Easier
The techniques described above can reinforce an attractive status quo, but they won't transform a bad status quo into a good one. Therefore, the key starting point for a successful customer retention effort is to provide customers - particularly new customers - information, insights, and assistance that will help them maximize the value they obtain from your solution and from their relationship with your company.
This approach - which is often called customer success management - has been widely adopted by software companies that offer their solutions on a subscription basis, and it is becoming more popular in other types of B2B companies, as business and marketing leaders increasingly recognize the value of long-term customer relationships. The bottom line is, it's much easier to reinforce the status quo when you have happy customers who are deriving great value from your solution.

Image courtesy of Nichole Burrows via Flickr CC.

Sunday, July 2, 2017

Research Explains the Persistent Disconnect Between Sales and Marketing

Yesterday, I performed a Google search using the term "sales and marketing alignment." My search produced 239,000 results. When I limited the search to the past year, Google still returned over 50 pages of results. So clearly, sales and marketing alignment is still a hot topic in the B2B sales and marketing world.

Marketing and sales professionals have long recognized the importance of forging a more productive relationship between sales and marketing, and some companies have made progress in improving the quality of the marketing-sales relationship. It's also clear, however, that many companies have more work to do to turn their marketing and sales organizations into a cohesive, high-performing demand generation team.

Recent research by Altify helps explain why sales-marketing alignment is still challenging for so many companies. The Business Performance Benchmark Study 2017 was a global survey that produced 833 responses. Survey respondents represented a wide range of industry verticals and company sizes. The study also included respondents from a variety of business functions including sales, marketing, operations, IT, and customer service.

The Altify study addressed a broad range of issues, including the performance of marketing and sales. Altify reported some of the study results by the business function of respondents. In particular, the study report identifies how sales respondents and marketing respondents answered several questions. These responses highlight some of the troubling "disconnects" that still exists between sales and marketing.

Altify asked study participants if they agreed with a series of statements regarding sales and marketing performance. The table below shows the percentage of sales respondents and marketing respondents who agreed with seven of these statements. The table also shows the "gap" between sales and marketing that exists with respect to each statement.

These survey findings reveal attitudes that make the lack of effective teamwork between marketing and sales easy to understand. Only half of these sales respondents believe that their marketing team understands their customers, and just over half (54%) believe that marketing in their company is an effective investment of company resources. On the flip side, only about half (52%) of these marketing respondents believe that their sales team is effective at qualifying sales opportunities.

The extent of the disconnects shown in the table is surprising because 66% of the sales respondents and 71% of the marketing respondents in the study said that their sales and marketing organizations "work well together." One can only wonder what these study participants meant by "work well together."

As the above table shows, the disconnects between marketing and sales are still numerous and significant. So it shouldn't be surprising that many companies haven't achieved the level of cohesive teamwork between sales and marketing that's required for a high-performing demand generation system.

Top image courtesy of Tambako The Jaguar via Flickr CC.

Sunday, June 25, 2017

What To Do When the Status Quo is Your Friend

 A few weeks ago, I published a post that discussed how to weaken the grip of the status quo. When your objective is to acquire new customers, the status quo is often your toughest competitor because most potential buyers have an inherent preference for their existing methods and processes. In most cases, no sale can be made unless a potential buyer first becomes willing to change his or her status quo. My earlier post described one tactic for loosening the grip of the status quo.

The situation completely changes when your objective is to retain existing customers. In the customer retention contest, your company is the incumbent and part of the customer's status quo. Therefore, one key to customer retention success is to enhance or strengthen the status quo bias and use it to your advantage.

It should be obvious that customer acquisition and customer retention call for entirely different kinds of marketing content. For customer acquisition, marketing content needs to disrupt the status quo; for customer retention, marketing content needs to reinforce the status quo. Unfortunately, recent research indicates that most B2B marketers aren't making this critical distinction.

In a 2017 survey by Corporate Visions:
  • Fifty-eight percent of respondents said they saw no need to use different content for customer acquisition vs. customer retention.
  • Only about one-third of respondents said they were using customer retention content that is specifically designed to reinforce the status quo. Two-thirds of respondents said they use disruptive content or product-oriented cross-sell/upsell messaging for customer retention.
Other research by Corporate Visions has shown that content which focuses on reinforcing the status quo is more effective for customer retention that provocative/disruptive content or product-focused messaging.

Astute business leaders have long recognized the importance and value of building and sustaining strong relationships with existing customers, but two recent developments have made customer retention particularly important.
  • As I wrote in an earlier post, the shift to subscription-based business models elevates the importance of customer retention because in a subscription-based business, customer profitability depends largely on the length of the customer relationship.
  • The adoption of account-based marketing also raises the importance of customer retention. When business leaders implement ABM, they make a conscious decision to focus their marketing and sales efforts on a relatively small number of high-value prospects. Once these high-value prospects are acquired, it's obviously important to keep them for as long as possible.
In a future post, I'll discuss what causes the status quo bias and how to create content that reinforces it.

Image courtesy of Dave_S. via Flickr CC.

Sunday, June 18, 2017

Why It's Hard to "Manage" the Customer Experience

Senior business leaders now recognize that providing outstanding customer experiences is a powerful driver of revenue growth and a critical component of competitive advantage.

In the 2017 Digital Trends report by Econsultancy and Adobe, which was based on a global survey of more than 14,000 digital marketing and ecommerce professionals, respondents said that optimizing the customer experience is their most exciting opportunity in 2017, and that customer experience is the primary way their company will seek to differentiate itself over the next five years.

In a 2015 survey of 1,350 B2B executives by Accenture, 79% of respondents said that a differentiated customer experience has a direct impact on business results, and 78% believe it produces a competitive advantage.

Several national consulting firms, such as McKinsey, Accenture, and Forrester, have made customer experience management a core part of their practice. And several professional societies, such as the Customer Experience Professionals Association, have been established to support the customer experience management discipline.

All of this demonstrates why customer experience (CX) management has become one of the most important and most widely-discussed topics in today's business world. I would suggest that CX management is also likely to be one of the most significant and persistent challenges facing companies for the foreseeable future.

CX management is difficult to master for several reasons. First of all, it is a complex, multi-faceted phenomenon. A recent article in the Journal of Marketing contains a detailed review of the academic literature relating to customer experience and provides an excellent introduction to the complexities of the customer experience "construct." If you have doubts about the complexity, just consider the definition of CX offered by the authors:  "Overall, we thus conclude that customer experience is a multidimensional construct focusing on a customer's cognitive, emotional, behavioral, sensorial, and social responses to a firm's offerings during the customer's entire purchase journey."

CX management is also difficult to master because no company can control all of the factors that produce customer experiences. At the most basic level, an "experience" has three components:
  1. The environment - This is the thing that is experienced. It can be a product or a service or a website or a call center (or for that matter, a theme park or a movie or dinner at a restaurant).
  2. The encounter - This is the interaction between an individual and a particular environment.
  3. The effect - This is the perception formed and held by the individual that results from his or her encounter with the environment.
A company can control the attributes and characteristics of the environments presented to customers, and it has some control over what happens during an encounter. But a company has no control over the effect component of an experience. The effect is largely determined by the context of the encounter and by the customer's mental state, and these are the last things any company can control or "manage."

Companies can increase the odds of achieving a positive outcome by understanding what the customer is trying to accomplish in an encounter and the context in which an encounter occurs. But, that's a far cry from "managing" the customer experience.

Illustration courtesy of Ron Mader via Flickr CC.