Revenue Opportunities

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1 revenue + associates Revenue Opportunities Created by Low Adoption Rates of Modern Sales and Marketing Programs A study of 196 New England B2B companies revenue + associates page 0 Revenue Gap Study

2 The Takeaway New England B2B small and mid-sized businesses (SMBs) have a great opportunity to take greater advantage of modern sales and marketing programs to significantly increase their revenue. For many individual companies this could result in a major increase in revenue; for the region it could generate hundreds of millions of dollars of annual revenue, or more, and thousands of jobs. The great challenge, and opportunity, for those in marketing and sales is how to effectively take advantage of the many, many options that they now have to significantly increase their revenue, but which many describe as overwhelming. Overview Over the past 20 years, many new sales and marketing technologies and channels have been introduced. These have been more rapidly adopted by B2C companies with some notable successes, such as Amazon, Apple, and, in the Boston area, TripAdvisor and Next Step Living. Adoption among B2B companies has been slower. Today over 1,000 companies offer sales and marketing software. 1 A small number of New England B2B companies many creators of sales and marketing software themselves have embraced this new data-driven world, and many of these companies have seen dramatic revenue growth through the implementation of it. Examples include HubSpot, insightsquared and Dyn. But once you step outside of that circle of a few dozen companies, adoption rates plummet. revenue + associates 1 Missed Revenue Opportunities Study

3 revenue + associates studied 196 B2B companies with approximately $10 million to $100 million in annual revenue. The companies are all headquartered in New England and operate nationally and, in many cases, globally. Their use of 9 modern, data-driven sales and marketing programs was reviewed. (More detail on the companies and how they were studied is available in the Methodology section.) The 9 programs that were looked for are: Analytics Marketing automation Remarketing Search advertising (Pay-Per-Click ads) Search engine optimization Conversion optimization Social media Content marketing A mobile-friendly website The Internet is the great leveler and gives even small companies the opportunity to compete effectively with the largest companies in national and global markets. However, few of the companies were taking advantage of these programs to significantly increase revenue. Overall, out of a possible score of 9, the average score was The median score was 2. For example, although mobile search is likely to surpass desktop search this year 2 and close to half of s are opened on a smartphone 3, only 28% of companies have a mobile-ready website. Several other programs had even lower adoption rates. This was a baseline assessment: the tags for the technology are on the site, or a minimal search marketing or social media program is in place. No assessment could be done on how often, if at all, the analytics are being reviewed and acted on, how well marketing automation programs revenue + associates 2 Revenue Opportunities Study

4 are used, or if the search marketing or any of the other programs are being routinely optimized. If a maturity model had been used for each of the 9 programs, on a five point scale companies would have only needed to score a 2 one level above doing nothing to get credit for the program. Based on the low adoption rates found it is assumed that the maturity and day-to-day usage of these programs at many companies is low, too. In separate studies Gartner 4 and the CMO Survey 5 found that nationally mid-market and enterprise companies spend approximately 8-10 percent of revenue, or more, on marketing, including staff about a quarter of that is spent on digital marketing the largest investment in the digital marketing budget is for the website manufacturing companies spend as much on marketing and digital marketing as companies in high tech and retail By those industry measures, to take greater advantage of these modern revenue generation tools the companies in this survey should be spending minimally hundreds of thousands of dollars on their digital marketing annually and, for the larger companies, up to two to three million dollars a year. While no data were available on actual budget numbers, from the observable efforts and state of many company websites it would appear that most New England B2B companies are spending far below that level. Companies in manufacturing, especially, are visibly spending considerably less than companies in high tech. Not only did manufacturing companies have a disproportionate number of the lowest scores, making the overall average even lower than it would have been without them, but the websites of many manufacturing companies had clearly not been updated in years. (One was copyright ) Some of these individual programs may not be appropriate for a particular company, and each company needs to test and determine its optimal sales and marketing mix. However, the majority of the 9 programs are likely to significantly enhance the revenue of most B2B companies. Many other companies in many industries are seeing significant revenue boosts from using these programs. For example: revenue + associates 3 Revenue Opportunities Study

5 Most companies report 100% ROI on marketing automation within the first year In IT decision making, vendor content (34%) is rated almost equal to independent third party content (35%) by buyers for impact on decision making Implementations of mobile-friendly, responsive websites produced immediate % increases in mobile conversions. A minimal revenue generation effort would include analytics, marketing automation, remarketing, conversion optimization and a mobile site, so an average score of at least 5 out of 9 was expected. (See Appendix A for research on the revenue opportunity.) And while each of these 9 programs can have a revenue impact by itself, that impact is multiplied as more and more of them are used in concert together. For example, a robust search marketing program would include at least PPC ads, conversion optimization and remarketing and the constant review of the analytics leading to the continuous improvement of each. Only 31% of companies running PPC ads, however, had also implemented optimized landing pages and remarketing. Advanced content marketing can include the generation of unique, valuable new content, search engine optimization, social media, online advertising, analytics, and conversion optimization; this combination was very rare. Very few of the companies studied are taking advantage of the potential synergies between these individual programs and traditional programs to multiply the revenue impact. Early adopters of new sales and marketing programs typically have outsized returns, which can fade as what were once innovative programs become mainstream and adopted by most companies. With such low adoption rates, companies still can take advantage of an early adopter advantage to ramp up revenue. These results confirm the findings of others 6 that many people in marketing and sales are overwhelmed by the proliferation of tools and channels over the past 20 years. With over 1,000 companies now providing sales and marketing software tools and new channels appearing almost annually, even companies that want to take advantage of them often don t know where to start. revenue + associates 4 Revenue Opportunities Study

6 Findings The 9 areas, and their degree of adoption, are: Analytics: An analytical tool for measuring activity on a company s website is an essential capability for a company to be able to analyze and optimize sales and marketing programs on an ongoing basis. Adoption rate: 87%. (81% of all sites had Google Analytics in place.) 87% Marketing automation: Marketing automation programs combine analytics with website tracking, marketing, lead scoring, lead nurturing, and personalization. They are an essential tool in companies that adopt them for aligning the work of sales and marketing. Adoption rate: 29% 29% Remarketing: Remarketing is the showing of online ads to only a private list of people who have visited a company s website. These ads can be targeted down to the level of people who have visited the pages of particular products and services. This is one of the easiest and mosteffective online marketing programs that a company can do. Adoption rate: 15% 15% revenue + associates 5 Revenue Opportunities Study

7 Search pay-per-click (PPC) advertising: PPC search ads, such as Google AdWords, get a company in front of people who are searching for its products and services right now. They also can provide a wealth of information on the most effective keywords, ad copy, offers, and other factors. Adoption rate: 23% 23% Search engine optimization: In most cases percent of people using search engines click on the organic results, not the PPC ads, so gaining high rankings can drive a significant amount of free traffic to a company s website. SEO can greatly enhance a content marketing program, too. Adoption rate: 39% 39% Conversion optimization: For companies using PPC ads, driving people who click on their ads to custom landing pages, instead of their website homepage or product page, can significantly increase conversions. Even for companies not using PPC ads, encouraging people to contact them, and making that easy, also increases sales. Adoption rate: 31% 31% revenue + associates 6 Revenue Opportunities Study

8 Social media presence: Being active on social media channels such as Twitter and LinkedIn are central to participating in the conversation around a company s industry and brand, broadcasting content, and interacting with potential and current customers throughout their buyer s journey. Adoption rate: 28% 28% Content marketing programs: Customers today are doing much more research mostly online -- before making a purchase. Often a shortlist of potential vendors is created from this research. Content marketing to these potential customers can include a regular program of blogging, webinars, white papers and other types of materials. Adoption rate: 23% 23% Mobile-friendly website: Desktop search is declining and in 2014 mobile search will pass desktop. Many customers are using smartphones whether while traveling, waiting for an appointment, or even at home or work. Having a website that is easy to use and read on a smartphone is now essential. Adoption rate: 28% 28% revenue + associates 7 Revenue Opportunities Study

9 All of the companies have a website. No effort was made to evaluate the quality or effectiveness of those websites outside of the programs described above. Companies with number of programs 0 Programs 1 Program 2 Programs 3 Programs 4 Programs 5 Programs 6 Programs 7 Programs 8 Programs 9 Programs Of a possible total score of 9, the average among companies in the study is 2.76, with a median of 2. More companies had none of these programs in place than had 7, 8 or 9 programs combined. revenue + associates 8 Revenue Opportunities Study

10 Regional Revenue and Jobs Impact While taking advantage of the latest sales and marketing tools can have a significant impact on an individual company s revenue, on a regional basis the impact could be huge. These 196 companies operate nationally and, in many cases, globally and represent several billion dollars in annual sales much coming in from outside of the region. Many of the manufacturing companies have production facilities in the region: a Made in America point of pride for some of them. Even if the comprehensive adoption of modern, data-driven sales and marketing programs only increased company revenues by 10 percent that would bring in hundreds of millions of dollars of additional revenue and thousands of jobs to the region not including the multiplier effect from those new jobs. And besides the companies studied, New England is home to many of other similar-sized companies that compete nationally and globally. The regional impact from all of them could exceed $1 billion in new revenue and over 10,000 jobs. Traditionally industry associations and city and state governments have looked at such matters as innovation, education, tax policy, and energy as means of generating regional competitive advantage, but this study suggests that the marketing and sales strategies and programs of New England SMBs may equal or surpass these for potential impact. revenue + associates 9 Revenue Opportunities Study

11 Appendix A: Individual Company Revenue Opportunity A different combination and weighting of sales and marketing programs is likely to be most effective for each company. And the effectiveness of any one of these programs, or combination of programs, will be affected by the quality of implementation, industry, competition, the general economy and other factors. However, cross-industry studies of the 9 programs have found that the implementation, active use and optimization of these tools can have a major impact on a company s revenue. For example: Marketing automation: Many metrics are used to demonstrate the ROI of marketing automation. Seventy-five percent of companies adopting marketing automation achieve a positive ROI within 12 months 7 ; most of those that did not had not engaged in the additional training or staffing needed to support their implementations. 8 As with any of these technologies and programs, the more mature, robust implementations reap the highest return. 9 Companies that automate lead management see a 10% or greater increase in revenue within 9 months. 10 Remarketing: Remarketing can take many forms including showing display ads to anyone who comes to the website, showing product-specific ads to people who drill down to a particular product or service page, remarketing only to those who come from a PPC campaign click 11, and even remarketing to try to close people who abandoned an ecommerce shopping cart. 12 Marketers report such results as 50% increases in revenue and 70% higher conversion rates. 13 And since the remarketing display ads are often paid on a cost-per-click basis, the brand can get many additional free impressions, too. Search marketing (PPC): PPC can be especially valuable for highly-priced B2B products and services. 14 After remarketing, search marketing has perhaps the most trackable and immediate ROI of any of these programs. And independent of the direct traffic from clicks, the free impressions and interactions can have a significant revenue impact, too. 15 Google s AdWords program and third-party PPC management programs provide a vast amount of data and analytics for optimization based on keywords, ads, offers, and many other factors. revenue + associates 10 Revenue Opportunities Study

12 SEO: Best-in-class companies, which have higher revenue growth and contribution of marketing to revenue, typically align SEO and content marketing. 16 In surveys, marketers rate SEO at the top of all digital programs for ROI, and have for several years. 17 Conversion optimization: Conversion optimization can quickly increase conversion rates by %, and in some cases by over 1000%. 18 Testing big changes can lead to big improvements. 19 Social Media: Studies have shown that people place greater trust in companies in which the CEO and other members of the C-suite participate in social media, and are more likely to buy from them. 20 Reviewing social recommendations are an important in the buying process for many people today, as is research on social channels. 21 There are many other ways to measure social media ROI including impressions, engagement, traffic generated to website, leads and revenue, depending on company social media goals. 22 Content marketing: Most companies look for increases in lead generation and customer acquisition as measures for the success of content marketing. Many companies use content as part of nurture programs 23 (which typically are greatly aided by the use of marketing automation programs, too). 24 Forty six percent of best-in-class companies track the number of qualified leads generated by content marketing programs; they also report higher website conversion rates, click-through rates, and marketing qualified leads (MQLs). In IT decision making, vendor content (34%) is rated almost equal to independent third party content (35%) by buyers for impact on decision making. Mobile-friendly website: Aside from the fact that Google is now penalizing sites that aren t mobile-friendly, 25 thereby reducing traffic, and brands with mobile-friendly sites typically see far more mobile traffic and mobile time-on-site, companies implementing responsive, mobilefriendly designs have often seen mobile conversion rates quickly increase % upon launch of the new site. 26 Other modern programs that could have significant revenue impact, such as marketing 27 and predictive analytics or the integration of the 9 programs studied with traditional efforts revenue + associates 11 Revenue Opportunities Study

13 such as tradeshows, direct mail and cold calling could not be externally observed and so were not studied, but adopting those would be expected to ramp up company revenue even more. Given all of this, an estimate of a 10% impact on the revenue of companies from effectively adopting more of these modern revenue generation programs is quite modest. The impact on revenue of implementing a comprehensive, modern, integrated program at a low-scoring company could be huge. revenue + associates 12 Revenue Opportunities Study

14 Appendix B: Methodology The 196 B2B companies included in this study were chosen randomly with care taken to represent a wide range of industries including high tech, medical devices, manufacturing, and services such as engineering and architecture. Companies that appeared to have such a narrow customer base, such as only the military, so that broad-based sales and marketing efforts would not be appropriate were excluded. Ecommerce companies were also excluded since it was assumed that they would have unique marketing opportunities. Approximate company size was determined by public company filings, reports for the Inc. 5000, or LinkedIn employee measures. The companies represent the six states in New England in approximate proportion to their contribution to the regional economy. State Regional economic contribution Number of companies in study Massachusetts 47% 93 Connecticut 29% 54 New Hampshire 8% 15 Maine 7% 13 Rhode Island 6% 12 Vermont 3% 7 100% 196 Companies of this size are a major part of the United States economy. Although the most recent compiled data 29 is from 2008, in that year over 96,000 companies had 100 to 750 employees (those companies are slightly larger than the companies in this study). Fewer than 12,000 firms had more employees. These SMBs accounted for over one-sixth of the paid employees in the U.S. economy that year. revenue + associates 13 Revenue Opportunities Study

15 The study was conducted in April and May of 2014 using a variety of tools to identify the presence of a particular technology or program, such as looking for the tags for an analytics program or a marketing automation program in a company s website code. This is a baseline study and it was deliberately kept easy for a company to get credit for a particular program. The specific base measures used for each of the 9 programs, and potential advanced measures for future study, are: Analytics: Presence of website tags for an analytics program. Potential advanced measures could include attribution models determining most effective sales and marketing programs based on contribution to pipeline and sales. Marketing automation: Presence of tags for a marketing automation program. Advanced measures could include full implementation of marketing automation with accelerated pipeline progression, increases in sales, and a positive ROI. Remarketing: Presence of remarketing tags on the site from such companies as Google (DoubleClick), Facebook or Perfect Audience. Advanced measures could include increases in sales due to remarketing, and ROI. Search advertising (PPC): Ongoing PPC programs in excess of $100/day of click fees a minimal program for companies of the size studied that would be always-on and optimizable -- as measured by such services as Spyfu, ispionage or SEMrush. Advanced measure could include always-on search marketing with continuous improvement in contribution to qualified leads, pipeline and sales. Search engine optimization: Presence of keyword-rich home page Title, and either Keywords or Description meta tags with similar keywords, and unique page descriptions. Advanced measures could include a more thorough examination of site for high-quality content, other cues to Google, and use of other SEO techniques leading to increases in revenue + associates 14 Revenue Opportunities Study

16 traffic from organic search and contribution of organic search traffic to pipeline and revenue. Conversion optimization: For companies doing search marketing, PPC ads that direct traffic to custom landing pages with easy-to-use forms rather than the site s home page or a standard product page. For companies not doing search marketing, the presence of website conversion optimization techniques (beyond the listing of a company phone number) such as prominent contact sales buttons or phone numbers high on pages, Contact Sales or Order buttons or phone numbers on product pages, and pop-up chat. Advanced measures can include the tracking and optimizing of these tactics to document increased conversions, leads and sales. Social media presence: At least one major, active social media account, usually Twitter, with tweets/posts more than once a day that are part of a conversation and not just promotions of company news. Advanced measures can include monitoring the volume of social conversation around a brand and its positive mentions, and increases in traffic and leads originating on social channels. Content marketing: At least six new content items per month, usually a blog post (of any length and quality), as part of an ongoing active content development program possibly also including webinars, white papers, infographics, marketing apps, etc. Advanced measures can include SEO-optimized content used in nurture programs for each stage of buying team s journey. Mobile-friendly website: Presence of a mobile-friendly website, including forms, when viewed in the Chrome browser on a Samsung Galaxy S5 and iphone 5 using a Safari browser; this usually means a responsive site. Advanced measure could include increases in mobile traffic, conversions and sales originating on mobile. revenue + associates 15 Revenue Opportunities Study

17 Research notes (slide 21) / 18 See individual case studies buyer_behavior_helps_b2b_marketers_guide_the_buyers_journey https://econsultancy.com/blog/ brands-that-increased-conversion-rates-via-responsivedesign#i.mzkx264otdv8xh 27 https://econsultancy.com/blog/ of-marketers-say- -delivers-excellent-or-good-roi- 2#i.i93dxyiz4eorxf 28 https://econsultancy.com/blog/64364-how-predictive-analytics-for-b2b-sales-and-marketing-canoffer-huge-returns 28 https://www.census.gov/econ/smallbus.html 29 https://www.census.gov/econ/smallbus.html revenue + associates 16 Revenue Opportunities Study

18 About revenue + associates revenue + associates (www.revenueassociates.biz) helps companies significantly increase revenue through measurable improvements in their sales and marketing programs. Not just permission but encouragement is given to post this report anywhere so long as the entire report, with no changes, additions or deletions, is posted. Copyright revenue + associates 2014, All right reserved.

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