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?
Our challenges with this fall into two major categories – a first, which today we are easily able to remediate, and a second, which it’s much more challenging to address.
Problem one: Our Inability to Track the B2B Buyer
Another book I have been reading recently is Revenue Engine by Steve Woods (Twitter: @stevewoods) and Alex Shootman (Twitter: @shootman) at Eloqua. Their book provides an analytical framework for thinking through the high-level management and optimization of the lead-to-revenue process, and it’s worth a read.
Synthesizing some of their points, the two would contend that managing demand as an operational process probably was not even really viable until recently. But they note that something substantial has changed in the last decade, which has enabled us to begin to approach lead-to-revenue management in a serious manner – the ability to observe a B2B buyer throughout his/her entire buying process:
Historically, marketing and sales have not been held to the same standards of measurement, optimization, and control that other corporate disciplines have confronted. Why? In a word: visibility. Scientific management was enabled by the ability to observe a worker, measure and time the tasks performed, and refine them accordingly. The tracking innovations in logistics and warehousing meant that analysts could track each package, each movement, and each shipment to a granular level, which gave rise to supply chain management. And the ability to precisely and automatically measure defect rates and manufacturing tolerances meant business could feasibly embrace and implement the total quality management discipline.
Unfortunately, that hasn’t typically been the case with marketing initiatives or sales conversations that have long eluded meaningful measurement. Without the ability to see and measure the progress of buyers, it has been virtually impossible to systemically optimize the performance of the revenue creation process. Until now.
Unprecedented transitions in buyer behavior and online access to information over the past 10 years have enabled, for the first time, the management and optimization of the entire revenue-creation process.
The same Web 2.0 world that has complicated buyer communication – challenging us as B2B marketers – also has delivered more mechanisms than ever for observing what Woods has termed “Digital Body Language.” I.e., more than ever, we have the tools to observe a buyer’s substantive interaction with our companies throughout the entire buying process. This capability is critical because leveraging trackable insights is at the core of our ability to optimize B2B demand generation and leads to what Woods/Shootman would term a state of more ‘scientific’ lead-to-revenue management.
So connect up inbound marketing and social media tools with marketing automation and a CRM platform, and you’ve got end-to-end tracking of much of the B2B buyer journey via his/her consumption of digital content.
Okay, problem number one solved, right?
… but yet we know this is not sufficient. Merely adopting platforms such as marketing automation gives us a new level of capability for engaging with B2B buyers, but how do we leverage the technology to efficiently manage the demand process? As I’ve noted in a past blog post, why is it that our adoption of the technology, by itself, does not seem to tackle our problems and that an alarmingly-high percentage of new technology adopters also report overall failures in their B2B demand generation programs?
Clearly there is something else – something bigger – that is holding us back from effective management of demand processes.
Part two of this series looks at the fundamental issue of B2B marketing leaders’ ‘lack of an operations mindset.’ Stay tuned …