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This week I’m publishing a two-part blog series.  This series takes a look at the challenge marketing leaders face in managing demand as an operational process.  The first post presented an introduction to the topic and examined the issue of tracking B2B buyer behavior.  The second post, today, looks at the fundamental issue of B2B marketing leaders’ ‘lack of an operations mindset.’ ~ABN

Problem Two:  Our Lack of an Operations Mindset

Given we have a rapidly expanding set of technological capabilities – through marketing automation and similar platforms – to ‘track the buyer,’ what is remaining for us to effectively manage demand as an end-to-end, optimize-able process?  I noted in the previous post in this series, “Clearly there is something else – something bigger – that is holding us back … .”

That bigger issue is B2B marketing leaders’ lack of an operations mindset.

This is the issue that B2B marketing leaders – especially CMOs – often can’t put their finger on, but that is at the core of much of our modern challenges.  They talk about not being able to demonstrate the revenue impact of marketing; they talk about not having ‘hard numbers’; or they speak to not having a dashboard to really visualize marketing results.  Obviously none of these ‘wants’ represent an operations mindset, per se, but they do represent the result of successfully managing demand as a process.

So how do B2B marketing leaders typically remedy this situation?  They invest in technology, but when it comes to their marketing programs, they continue to do ‘more of the same.’

Therein lies the disconnect, as I note in Balancing the Demand Equation:

The disconnect:  If as B2B marketers we are applying legacy mass-marketing, top-of-funnel techniques to the effort of customer acquisition and nurturing in an era of Buyer 2.0, there is a high likelihood that we will have a single, ineffective touchpoint with our buyer and then subsequently lose his/her engagement as (s)he goes through the buying process.  Most of our demand generation programs thus remain highly inefficient, largely focused on awareness, and so we consistently lose track of warm leads that literally ‘leak’ out of our sale funnel, as Forrester has noted in its research.  This is particularly problematic because Buyer 2.0 is moving forward in the buyer education process and will make a purchase, but if our B2B demand generation program loses touch with that buyer, the chance of him/her purchasing from us is greatly decreased.

Most B2B marketing organizations thus do not have a top-of-funnel problem.  What they really have is a ‘middle-of-the-funnel’ problem.

This is why our B2B demand generation efforts cannot be haphazard or intermittent; instead, they need to be consistent and continuous processes.  …

Yet it is exactly this type of a consistent and continuous B2B demand process – one that perpetually operates to move a buyer through multiple education and qualification stages (adjusting to the pace of the buying cycle), that combines both automated and live touch points and that only turns a lead over to sales after sufficient processing – that B2B marketing leaders are challenged to build.

We want a lead factory – a construct that requires understanding and enabling the multiple processing stages required to take in raw inputs and to churn out a finished product – but instead we deliver a series of ‘stage shows.’

What is at the core of this issue?  It has nothing to do with good intentions; rather, it is the product of biases that are deep-rooted and fundamentally engrained in B2B marketers.

  • First, right-brain/creative types are often drawn to marketing, not left-brainers.
  • Second, marketing training at the vocational and academic level is focused on channels and tactics and on building consumer brands, but rarely speaks to the orchestration and coordination of multiple channels and tactics in a sequence to drive buyer dialogue.
  • Third, on the off-chance a B2B marketer has some operations-analysis experience, it was probably garnered either in an MBA class or in an industrial setting, and it was probably applied to some sort of manufacturing process – meaning it never ‘clicked’ that this could also be applied to marketing.
  • Fourth, the opportunities and challenges around such a complex, iterative and information empowered Buyer 2.0 are relatively recent; meaning, it truly is a changed world of marketing today from five years ago or ten years ago, when more ‘one-and-done’ tactics in more limited channels might have actually been a successful route.

It’s time for our training, bias and ultimate mindset as B2B marketers to catch up with our operational reality.  So where do we need to focus our time and attention to drive change?

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This week I’m publishing a two-part blog series.  This series takes a look at the challenge marketing leaders face in managing demand as an operational process.  The first post, today, presents an introduction to the topic and examines the issue of tracking B2B buyer behavior. ~ABN

I open Balancing the Demand Equation by commenting, “Modern B2B demand generation is failing.  Seriously.”  What’s going on?  Amid an information power shift from sellers to buyers, an explosion of Web 2.0 communication channels and raised expectations from sales colleagues and executive management, B2B marketers are finding it tougher than ever to credibly and efficiently add value in the “lead-to-revenue” process, as Forrester terms it.  I hear this challenge regularly from senior marketers and CMOs, who often are hard-pressed to show the real impact of their efforts on their companies’ bottom lines.

Where’s the gap?

There are many challenges, but perhaps one of the greatest is our frequent inability as B2B marketing leaders to conceptualize and manage ‘demand’ – used here in the classical economics sense of the word – as an operational, repeatable and sustainable process.  Stated in another way, we do not treat B2B buyer demand as something that is built via a series of optimize-able steps, through which we turn initial buyer interest into a lifetime of customer revenue.

What goes into such an end-to-end demand process?  The core organizing thread is the logic around the dialogue we plan to drive with the buyer, based on his/her buying process.  This aligns with a virtual ‘layer’ of content marketing efforts that should extend across channels, addressing various stages of the buying process.  This dialogue also should be aligned with a layer of lead qualification activities, which extend throughout all phases of the buying process.  These parallel layers of content marketing and lead qualification should align with various marketing and sales roles, spanning both automated nurturing and also live interaction at various stages of the buying process.  And the entire process should be supported by data and systems that enable the end-to-end orchestration of marketing and sales efforts to move the buyer forward.

Active demand process management thus is critical to successful, modern B2B marketing and demand generation, and yet B2B marketing leaders are only beginning to scratch the surface of doing so.

In fact, this gap was driven home as I was reading a recent pair of research briefs, written by Lori Wizdo and Jeff Ernst (Twitter: @jeffernst), both analysts at Forrester.  The first brief, “Automating Lead-to-revenue Management” by Wizdo, notes that B2B technology marketing organizations’ contribution to lead pipelines, on average, hovers at a surprisingly-low 27%.  The second brief, “The State Of B2B Demand Generation: Disjointed” by Ernst, further notes that only one in four B2B marketing organizations “… have defined a lead-to-revenue management process that their marketing and sales teams follow” and that less than 5% of aggregate marketing and sales interaction with B2B buyers rises to the level of what Ernst would consider truly “orchestrated.”

Clearly modern B2B demand generation is failing.  And all of the great messaging and creative, smart tradeshow sponsorships and new technology investments that we throw at the problem cannot help if we are unable make a critical leap.  We must be able to manage demand as an operational process.

So why haven’t we done this yet?

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No member of the C-suite has a riskier or more-short-lived term than the chief marketing officer (CMO).  The average tenure of a CMO at the ‘100 most advertised’ US brands is 28.4 months, according to recruiting firm Spencer Stuart in a recent Advertising Age column by John Quelch.  In fact, as a marketer, few things are as much of a sure-fire, eventual career killer as being named CMO.  Strange … you’d think that getting to the top of marketing hierarchy would be the pinnacle of one’s career.

The challenges faced by the CMO speak to many of the fundamental strategic problems underlying marketing organizations and marketing science today and that are linked to a permanent shift in power from brand-company to customer and to a proliferation of communication channels and information sources.

For CMOs to succeed they must sit at the top of a newly-agile marketing organization, built from the ground up with sophisticated, financially-savvy and technology-empowered closed-loop systems and processes in place that can scale, that can manage increasingly complex and customer-centric communication execution and that can provide necessary transparency into multi-channel program performance.  And this transparency must provide other C-suite colleagues with the real-time status of key performance indicators (KPIs) and on the return on investment (ROI) of marketing programs in net present value (NPV) terms.  “[F]inancial accountability of marketing is here to stay,” argues Quelch in the Advertising Age column.  “[I]mproved accountability requires CMOs to be financially literate, to understand the balance sheet as well as the income-statement effects of marketing initiatives.”

Source: iStockphoto

Source: iStockphoto

Too often, though, such an organization does not exist.  “Although the marketplace has changed beyond all recognition due to Web 2.0 and the explosion in digital – marketing technology and process have not kept up with the changes,” commented Bob Barker, VP of corporate marketing at Alterian, in a recent post on DM News.

The imperative for the CMO, thus, is to drive change. 

And that change must be focused on building just such an organization.  It is not sufficient to manage execution of the existing organization or to believe that your company is already ‘getting it right’ today.  There is no room for complacency or incremental efforts.  Marketing is a dynamic practice that keeps an organization in check with the dynamic needs of its customers and of the marketplace.  CMOs must drive change because their organizations must constantly change to remain competitive – a fact that was validated in a recent CMO Council report, which noted “… 61% of respondents believe that marketing operational transformation will be an essential area of focus for them in the months ahead.”

So how do CMOs do this?  And where should they focus their efforts to transform the marketing organization?

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