This week I’m publishing a four-part blog series — based on research I’m doing as part of the updated focus for my marketing book project. This series takes a look at B2B demand generation today. The first post provided an introduction to the series. Parts two through four examine the three major challenges facing B2B demand generation. The second post identified why technology, alone, is not enough to improve B2B demand generation. Today’s post looks at the second challenge — exploring our continuing struggle as maketers to link marketing tactics to revenue outcomes. ~ABN
So what does that average B2B marketing organization look like today? And what are the challenges that organizations must overcome to get to best-in-class?
Challenge #2: We still struggle when it comes to linking our B2B marketing tactics to revenue outcomes; thus, we have a hard time proving (and better targeting) the specific impact of investments in content offers and demand generation programs.
The Web 2.0 world has substantially changed the dynamics between sellers and buyers – changing the information consumption patterns of B2B buyers and resulting in a new era of buyer power. One dynamic is the emerging importance of content and the impetus to adopt new content marketing processes.
But we need to be able see the linkages between content consumption and revenue outcomes – both elasticity and ‘critical path’ – within a given persona’s buying process if we are going to be able to develop sophisticated content-based nurturing. Yet seeing this type of linkage is in fact the Achilles heel for many B2B marketing organizations.
The Lenskold Group highlighted this challenge in their recent “2010 B2B LeadGeneration Marketing ROI Study.” It pointed to the fact that most B2B marketing organizations are able to link only basic offers to revenue outcomes:
When asked to describe their organization’s highest level of measurement capability to assess lead generation marketing, close to half [of] marketers (44%) reported that they credit the last marketing touchpoint as the lead source. Twenty-one percent (21%) reported that they split credit across multiple touchpoints, an approach that acknowledges how marketing impact is dependent on more than just the last touchpoint generating the lead. Only 14% use the more reliable techniques of market testing or modeling to isolate the impact of specific tactics (11% and 3%, respectively), while the balance (20%) do not track leads to specific marketing touchpoints.
One obvious call-out is the fact that marketing automation synchronized with a CRM platform can help track contact offers and establish these linkages in a closed loop; however, as we saw from SiriusDecisions earlier in this series, only a quarter of B2B marketing organizations use marketing automation in a sophisticated fashion, and only about 10% use marketing automation to manage the entire demand generation process.
Analyst Megan Heuer with SiriusDecisions commented on this in a recent blog post, “So You’ve Got a Marketing Dashboard … So What?” Heuer asserted, “It’s a fact that despite good intentions of marketing teams to improve reporting and dashboards, the gap remains wide between desire for better reports and the execution that delivers them — not to mention the skills to take that data and turn it into actionable advice.”
B2B marketers also seem challenged when it comes to analyzing their activities in the context of the buying cycle. “We know from our research that we in marketing don’t do much with analytics—i.e., using data to determine and predict customer buying patterns,” commented Chris Koch with ITSMA in a blog post. “Only 50% of marketers in our survey said they had analytics programs, and of these, few were focused on predicting behavior; most were simply reporting past behavior. Even rarer is the ability to carry those analytics all the way through to a sale.”
This challenge has broader implications, as well. Not only as B2B marketers do we have a hard time connecting the dots for ourselves, but we also have a hard time connecting the dots for our colleagues in the rest of the enterprise, according to a recent post by David Wieneke on the UsefulArts.us blog:
[T]he Association of National Advertisers’ Marketing Accountability Conference found that most financial executives don’t accept Marketing’s forecasts or ROI calculations.
- Nine out of 10 said they don’t use ROI metrics to set marketing budgets in the annual budgeting cycle.
- Seven out of 10 said their companies don’t use marketing inputs and forecasts in financial guidance to Wall Street or public disclosures.
- Four out of 10 said marketing forecasts made inside their company can’t pass the muster of a standard corporate audit.
So what is holding back out ability to link programs to revenue outcomes – and to deliver analytics that show the total impact of B2B demand generation programs and that enable them to be tuned? Honestly, the technology’s not the problem, folks.
The Annuitas Group touched on this in a blog post: “[S]o many marketing organizations are struggling with determining what to track and how to track it. As a result, many end up measuring with no clear purpose in mind.”
Analyst and author David Raab has his own take. He commented in a recent blog post, “Why Marketers Don’t Measure”: “[M]arketers have for years listed better measurement as a top priority but made little actual progress,” commented Raab. “When asked about obstacles, they generally come up with reasons like lack of data or measurement technology … . Since these are problems that can be solved with funding, they suggest that the root cause is that marketers doubt measurement is worth the investment or don’t know how to do it.”
So we come back to a call-out from our first challenge. A true skills gap seems to explain why people and process are such important areas where we should be investing our time and energy to improve the state of B2B demand generation.
[update] Part four of this series continues to examine the three major challenges facing B2B demand generation today and looks at the third challenge – our overall lack of buyer orientation. Stay tuned …