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. The third post explored our continuing struggle as maketers to link marketing tactics to revenue outcomes. The final post today looks at the third challenge — highlighting our consistent failure when it comes to placing the B2B buyer at the center of our demand generation planning. ~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 #3: We too often don’t start with our targeted buyer when it comes to developing B2B demand generation programs, nor do we rationalize the content and pacing of our nurturing against the buyer’s decision-making process.
This third point is perhaps at the core of the other two problems. Our failures with technology and our inability to link activities to revenue outcomes are also linked to the fact that too often we don’t start our marketing thinking, building or planning in the most obvious place. We don’t start with the buyer, and we certainly don’t take into account the major changes in the nature of the buyer over the last decade.
“It’s a no-brainer: You can’t make a connection with your audience unless you know who you’re trying to reach,” comments B2B marketing consultant Stephanie Tilton on the Savvy B2B Marketing Blog. “This gets down to marketing basics – you need to develop buyer personas. Yet my unscientific polls show that a fair number of B2B marketers haven’t undertaken the exercise of developing buyer personas.”
So we don’t tend to define and understand buyer personas. We also don’t leverage them to improve the relevance of messaging and content, and we don’t rationalize the timing and pacing of our marketing activities against them.
SiriusDecisions analyst Tony Jaros commented at the firm’s 2010 summit that only one in three B2B marketing and sales organizations today have crafted their go-to-market strategies specifically based on their target market.
And personas are only used by a minority of companies as a focal point for B2B demand generation planning. “[A] … study by MarketingSherpa revealed that 40 percent of business technology hardware marketers, 22 percent of software marketers and 19 percent of professional services companies are now using personas as a sales enablement tool,” notes marketing expert Laura Patterson in a 2007 article.
The data from marketers is mirrored by data from the buyers’ point of view that shows we’re not connecting. According to a MarketingProfs article, the Corporate Executive Board found in a 2009 study of 9,000 B2B buyers “… that 86% of the ‘unique benefits’ touted by vendors were not perceived as unique or having enough impact to create preference.”
Perhaps this gap explains why “[s]egmentation has emerged as a key Best-in-Class enabler for delivering higher return on marketing investments,” notes Aberdeen Group in its study, “Lead Lifecycle Management, Building a Pipeline that Never Leaks.” Can you imagine this? Segmentation (a.k.a., targeting the right message to the right prospect) – something that would seem so intuitive – is a major differentiator between being good and great in B2B marketing? Yes.
The Aberdeen study highlighted a 17 percentage-point difference between best-in-class (60%) B2B marketers and ‘laggards’ (43%) when it comes to their ability to ‘segment and target more effectively. “The Best-in-Class are more likely to segment and target their customer database and most importantly use this segmentation in nurturing campaigns. It’s important to note that the Best-in-Class don’t just deploy lead nurturing campaigns; they have formal ‘nurturing programs.’”
Unfortunately, a majority of B2B marketers may segment by obvious categories such as ‘industry’ but they remain really bad at getting the segmentation right when it comes to the timing of where a buyer is in his/her buying process. MarketingSherpa highlights this in its “2010 E-mail Marketing: Benchmark Report.” The report pointed out that only about 1/3 of B2B marketers are likely to segment by “Prospect’s stage in the sales cycle,” when developing email-based marketing campaigns. (See graphic below; used with permission.)
Rather than using nurturing to determine where a buyer is in his/her buying process and use that to build out our marketing and sales engagement, we send out broadcast emails to push buyers to make a purchase within the next month or quarter. This fails to recognize that nearly 2/3 of B2B buyers at any given point in time will make a purchase decision in a period greater than one month or one quarter, according to MarketingSherpa in its “2010 E-mail Marketing: Benchmark Report.” (See graphic below; used with permission.)
So we’ve seen throughout this four-part series that modern B2B demand generation remains challenged on multiple fronts. These challenges include: tying technology adoption to process evolution, linking tactics to revenue outcomes and rationalizing our programs around our targeted buyer.
It’s worth reflecting for a moment. It strikes me that this is not only a challenge for B2B demand generation, but for all of marketing – a point I found well-highlighted in a recent Harvard Business Review article:
To be sure, most companies use customer relationship management and other technologies to get a handle on customers, but no amount of technology can really improve the situation as long as companies are set up to market products rather than cultivate customers. To compete in this aggressively interactive environment, companies must shift their focus away from driving transactions to maximizing customer lifetime value. That means making products and brands subservient to long-term customer relationships. And that means changing strategy and structure across the organization — and reinventing the marketing department altogether.
It looks like we’ve still got some work to do.