MODERN BUSINESS-TO-BUSINESS MARKETING IN THE ERA OF THE EMPOWERED BUYER

Transcription

1 MODERN BUSINESS-TO-BUSINESS MARKETING IN THE ERA OF THE EMPOWERED BUYER by Scott Levine, Vice President Strategy KERN, An Omnicom Agency 1 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

2 TABLE OF CONTENTS 03 Introduction chapter 1 04 The Opt-In Culture chapter 2 06 The Business-to-Business Empowered Buyer s Manifesto chapter 3 08 How Is Marketing to the Empowered B-to-B Buyer Impacting B-to-B Marketers? chapter 4 10 The Top B-to-B CMO Modern Marketing Challenges chapter 5 15 Today s Best-Practice Demand Generation chapter 6 18 Where Do Enterprise Marketers Fall Short With Demand Generation Efforts? chapter 7 19 The Importance of the B-to-B Brand chapter 8 21 Marketing to Groups chapter 9 26 Next Evolution Demand Generation Content Strategies chapter B-to-B Companies Are Not Immune to the Age of the Customer chapter Next Evolution Demand Generation Media Strategies chapter What is Next Evolution Demand Generation? 2 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

3 INTRODUCTION The past 20 years have seen more changes in marketing than the last 100 years. Today, we live in an instant world where buyers possess infinite choice and infinite power. Whether instant access, instant information, instant gratification, instant justification or instant rationalization, these instants impact the way businesses that market to businesses think, act and react. The instant factor doesn t just apply to customers and prospects. Instant also figures into the marketer s world of dashboards, real-time marketing analytics and programmatic algorithms. And, as technology advances, instant is swiftly becoming not good enough. We re now heading into the crystal ball business, predicting behavior with predictive analytics to predictive lead scoring. Rather than dwelling on the good old days, CMOs must now look toward tomorrow, seeking the next innovation, striving to equip themselves and their organizations to stay as far ahead of the fast approaching storm of constant and continuous change as possible. Changes in culture, perceptions and processes With the average job lasting 61 months according to the Spencer Stuart Report, B-to-B CMOs are currently enjoying the longest tenures in recent history. Despite this new level of job security, many CMOs are struggling with significant challenges as CEOs are increasingly looking to them for strategic input. In fact, the CMO now comes second only to the CFO in terms of the influence he or she exerts on the CEO. According to an IBM CMO Study Two thirds of CMOs will be held accountable for ROI by 2015, but half feel insufficiently prepared to provide hard numbers. The risk of change vs. the risk of the status quo While there is some comfort in maintaining the status quo, marketing in the era of the empowered buyer amplifies the risk of stagnation. This new era of B-to-B marketing elucidates the importance not only of changing, but also choosing the right direction in which to change. The view from above The purpose of this white paper is to provide a high-level view for CMOs and B-to-B marketing leaders. It is geared toward readers with an advanced understanding of modern marketing who have followed the trends up until today. 3 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

4 CHAPTER 1 THE OPT-IN CULTURE In today s opt-in culture, we can no longer tell people when and where to engage. Until recently, a marketer could address customers at times and places determined by the marketer. Watching a hit television series also meant watching the accompanying commercials. The same was true of newspapers, magazines, radio and, to some extent, even the customer s mailbox. The buyer of the past received current news and necessary information by newspaper, radio and television. Fixed parameters controlled sources of information and possible channels for communication. Five to seven television stations per market made viewing choices finite. There were two local newspapers and 10 local radio stations. The range of television and radio signals physically limited access to media. The only way to opt out was to turn off the medium or stop paying attention. Today, when anyone with a mobile device is a potential journalist, there are billions of journalists. Overtaking the desktop, mobile is now the preferred path to the Internet. When we consider the ubiquity of mobile devices there are more devices than there are people on the planet we all must come to the same conclusion: mobile is today s channel of choice. Empowered buyers engage and disengage with brands at will. They have unlimited digital access in an information instant-gratification world. Opting in (or out) is now squarely in the hands of the consumer. This instant gratification reality fuels the modern buyer s What s in it for me? mentality. Also known as the me-conomy, this new reality has had profound economic impact and operates on its own set of rules. The rules of the me-conomy game Addressable audiences are fluid: The addressable audience is fluid, as life causes people to live many roles, such as father, mother, husband, wife, marketer, analyst, car enthusiast and each of those roles defines an addressable part of the audience. This fluidity gives marketers a great opportunity to speak to more human parts of the audience, even when promoting a business-oriented product. For instance, perhaps when sharing business solutions, we engage not only the businessperson making the buying decision, but speak to the heart of that person by addressing one of her more personal roles such as mother or hobbyist. People don t stop being themselves when they walk into an office. The tyranny of choice : There are more brands, more places to buy and more opportunities to source, compare and challenge than ever before. The tyranny of choice causes brands to compete harder than they ve ever had to before. What used to be a bounded rationality of decision making with a limited number 4 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

5 of choices has evolved into an unbounded rationality, where new and greater choices appear by the minute. Brands need people more than people need brands: Why should I buy what you re selling? Brand value is waning as more choices are offered to the modern buyer. Value becomes diluted as choice increases, commoditizing products, services and solution sets. Linear integration is yesterday s reality: People will no longer tolerate being told where to enter and when to leave. Engagement comes from all entry points and exit points simultaneously. You walk through the airport looking at your smartphone until you arrive at your gate, then you sit down and pull your laptop out and work on that until the flight is ready to board. Once you are onboard, you pull out a tablet and continue to work. Across all devices, platforms and locations, you are moving in and out as your life dictates. As modern marketers, we all know that linear integration is yesterday s news. Today s empowered buyers follow their own path in their own time and on their own terms. 5 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

6 CHAPTER 2 THE BUSINESS-TO-BUSINESS EMPOWERED BUYER S MANIFESTO Much has been reported and written over the past two years regarding the modern B-to-B buyer s journey, with almost all of the research indicating that, in some way, shape or form, salespeople are being displaced by the ubiquity of available information on digital channels. The Corporate Executive Board (CEB) and Google have been quoted numerous times about B-to-B buyers traveling 57% of their journey without ever contacting sales. SiriusDecisions stated just last year that 67% of the buyer s journey is now done digitally, and many other sources, such as Forrester and Gartner, have reported similar statistics, all pointing to the fact that buyers are completing a majority of the journey without contacting a vendor s salespeople. A 2014 Demand Gen Report on B-to-B buyer behavior states: As many as 34% of respondents said the number of team members involved in the B-to-B purchase process increased over the past year, and TechTarget chimes in too: The single buyer is no longer team buying is prevalent across all geographies as 55 75% of respondents indicate that the most common buying team consists of 2 4 people, but the size of the buying team increases at larger companies. CEB puts the average size of the enterprise buying group at 5.4 people. The average B-to-B buyer age is going down A recent article in Advertising Age states that millennial influence within B-to-B buying decision groups is growing rapidly, according to a new study by Google and the research house Millward Brown Digital, where 46% of potential buyers researching B-to-B products today are millennials, up from 27% in We d like to introduce you to someone quite important. Someone that you ll need to become quite familiar with. We d like to introduce you to the business-tobusiness empowered buyer of today. We have taken power. We will no longer sit back and be sold to. We have access to more information than ever with the mere touch of a finger, and we intend to use it. We have a ravenous appetite for content, not marketing material. We don t stand alone. We are constantly influenced by our network and we make our decisions in groups. Our strength is in numbers. Because of us, marketing will never be the same. And that s a good thing. We work, think and buy on our own terms. We will create the future to our liking. We will be unshakably loyal to what works for us. And ruthlessly fickle to what doesn t. We are the empowered buyer. Welcome to our world. 6 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

7 The modern business-to-business empowered buyer is more complex, sophisticated and independent than the buyers of yesterday. They don t know who you are and, while they may recognize your firm, they don t know you. How much do you really know about your buyers? Do you really know what they want or need and do you know how they feel or what they re thinking? Do you know what generational segment that your buyers hail from? And if you do, you d better be ready to speak Boomer, X-er, Y-er and Millennial, as each generational segment really only understands their own language. Your buyer is part of a buying group of between three to seven people on average, so even if you convince your buyer, you ll also have to convince their group, or help your buyer to convince their group, that your solution makes sense. Buyers don t trust your content and only 9% of them trust content provided by vendors. However, your buyers do trust content generated by their peers, as 86% of IT buyers use social media networks and peer-generated content in the purchase-decision process. Do your buyers know what your brand means? Maybe they once knew, or maybe they never knew; are you prepared to tell them what your brand stands for? Why would your buyer stop what they re doing to listen to you? The attention span of humans is shorter than ever. You don t have much time to convince your buyer. According to the National Center for Biotechnology Information, at the U.S. National Library of Medicine, the average attention span of a human being has dropped from 12 seconds in 2000 to eight seconds in This is one second less than the attention span of a goldfish. Your buyer is using their own digital resources on their own times and terms to seek out solutions. When marketing to the empowered business customer of 2015, your organization needs to show up in their research, since the modern buyer will travel 57% of their buyer s journey and download 17 pieces of content before they engage with a salesperson. It s a brave new world with brave new buyers, and marketers who aren t adapting to succeed are flirting with obsolescence. 7 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

8 CHAPTER 3 HOW IS MARKETING TO THE EMPOWERED B-TO-B BUYER IMPACTING B-TO-B MARKETERS? We ve come from a world where our audience was addressable through a mass effort, rather than the precise pinpointed effort that we need today. The most challenging complexity that modern B-to-B marketers face is creating individualism within a mass-media framework. To speak to individuals, marketers require a model that directly addresses customer needs, wants and desires. We have evolved from specific episodic programs that had a beginning, middle and end, to continuous, seamless customer experiences developed to encompass the entire customer lifecycle. Moving from complex siloes of channel-specific marketing, we are challenged with simplifying messages to resonate with audiences through omnichannel branded experiences. No longer a one-way affair, with the advent and proliferation of social media, two-, three-, four- and more-way communications are now the norm. Our old processes were slow and methodical, with feedback coming to us at a snail s pace. Today we re in the throes of real-time marketing, data collection, data analysis, marketing dashboards, and instant and automatic multivariate testing that allow us to optimize on the fly to continuously improve and streamline programs. Recently, with the advent of technology-powered automated programmatic realtime buying, we have been able to break away from human-driven media buying, where limitations such as negotiations and time constraints have disappeared. The B-to-B marketer and the new group dynamic In the face of all these changes, one incorrect perception for B-to-B marketers is that, when marketing products to business clients, they are marketing to a single decision maker. A recent study from the CEB and Motista confirms that, in almost every case of a complex enterprise sale, there are 5.4 decision makers on average involved in a group decision. TechTarget puts the number of people in a group decision team at seven. Everyone on your sales team knows that groups make buying decisions. SiriusDecisions came to the same conclusion as we did. They unveiled a new B-to-B Buying Decision Process Framework at their May 2015 Sirius Summit in Nashville, Tennessee. SiriusDecisions outlined three types of buying scenarios: Groups buying by committee (six to 10 people in the buying group), groups buying by consensus (three to five people involved in the buying group) and independent buyers (one to two people in the buying group). They ve determined that those buying independently are usually involved in deals for less than $50K. They detail the deal size for consensus buying at a range of $50K to $500K, and likewise call out the committee buying range at $500K to millions of dollars. 8 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

9 Recently, Gartner published a report Gartner Predicts: Seizing the Digital Business Advantage in which they predicted the impact of digital on the future of marketing. Gartner s predictions included: By 2023, superior digital business capabilities will lead four out of five industry leaders to reposition their brand promise or build new brands. Digital business incompetence will cause a quarter of businesses to lose their market position by By 2017, corporate strategists will perform daily competitive scans to compensate for the death of sustainable competitive advantage. By 2017, one in five industry leaders will have ceded their market dominance to a company founded after Modern Business-to-Business Marketing in the Era of the Empowered Buyer

10 CHAPTER 4 THE TOP B-TO-B CMO MODERN MARKETING CHALLENGES To provide insight into the top business-to-business CMO challenges for 2015, we researched, aggregated and assessed over 20 studies from key resources, including Gartner, Forrester, IBM, Forbes, Altimeter, LinkedIn, CMO.com, AAMA, Harvard Business Review, McKinsey, The CMO Club, IDG, The Economist, Bloomberg BusinessWeek, Mobile Marketing Association, Advertising Age and the Content Marketing Institute. 1. Creating effective engagements for today s empowered customer B-to-B buyers are now in control of the buying process and expect new levels of consumer experiences when interacting with your brand. How ready is your organization to deal with empowered and emboldened B-to-B buyers of 2015 who buy on their own time frame and terms? Business buyers spend just 21% of the buying cycle in conversations with salespeople, while spending 23% of the time in conversations with peers and colleagues and 56% of the buying cycle searching for and engaging with content (according to IDG Connect, 2013). Marcus Starke, Chief Marketing Officer of Ciena writes: Many technology companies are very inward-focused, looking at the world through a technology lens and doing everything based on what they think is right and important. The old build it and they will buy it mantra is still prevalent in many B-to-B environments and so it is the marketer s biggest opportunity and challenge to turn an inward focus into an outward one, help the company take on a market and customer perspective, and put buyers first. 2. Delivering on the promise to drive revenue How can marketers change internal perception of marketing as a cost center to that of a revenue driver? CMOs must be prepared to prove total marketing revenue contribution. According to a 2015 study by McKinsey, The Fuqua School of Business and the AMA, it was revealed that companies are spending 8.3% of revenue on marketing, blended for both B-to-C and B-to-B marketers. We generally see 4% to 5% of revenue for B-to-B companies. Even at the lower end of the B-to-B budget estimate of 4%, companies yielding $1B in annual revenue have an average marketing budget of $40,000,000. What is the return on the investment? CMOs must be prepared to answer the big revenue question in The Fournaise Group reports that: 90% of marketers are not trained in Marketing Performance & Marketing ROI, and 80% struggle with being able to properly demonstrate to their Top Management the business effectiveness of their Marketing spending, campaigns and activities. Marketing must be an efficiency driver for sales, helping sales to focus on what they do best proposing and closing solutions while marketing provides the strategy to drive preference and consideration through campaigns implemented with marketing automation methodologies. 10 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

11 Marketers must create and construct their plans to align with the sales pipeline and revenue goals of the organization, while having a plan in place to report ROI. CEOs are putting even more pressure on CMOs to generate (and prove that they generate) incremental customer demand for the companies products or services (i.e., their ability to generate more sales, more market share, more prospects and/or more conversions). 3. Delivering differentiated branded omnichannel experiences Will marketers successfully engage prospects and customers with the same brand experience regardless of channel in 2015? Business-to-business buyers expectations have changed dramatically due to the advent and proliferation of rich consumer omni-channel experiences. B-to-B buyers have consistent experiences when engaging a B-to-B brand through various channels. This includes ecommerce, where applicable, for B-to-B products; less so for services. While there are some great examples of B-to-B ecommerce sites, such as CDW, the people who get IT, most are not so great. According to a recent report from Forrester Research, Building The B-to-B Omnichannel Commerce Platform Of The Future, the top barrier to omnichannel implementation is back-office integration across channels (44%); 42% of B-to-B companies point to difficulty sharing customer data and analytics between channels, countries, or locations, while 40% say they are limited by distribution partners, franchises or wholesale customers; and 36% report a conflict between different channel organizations, implementation difficulty or lack of business incentives (33%), limited staff skills (32%) and employee or management resistance (31%). B-to-B marketing organizations must strive to own customer experience by developing omnichannel experiences that are seamless for their customers. Controlling the touch-points of a customer s full journey is the optimal way to deliver a truly differentiated omnichannel experience. 4. Bridging the knowledge gap The success of any marketing operations team is reliant on new technological knowledge and skills. The era of informal marketing skills development is over. B-to-B must now rise to the expectations of the customer by employing all available technology, analytics and alignment with sales and products. How can marketers close the gap between what they used to do and what they need to do in 2015? Marketing operations personnel must be capable of presenting a viable business case that enables a top-down strategic view of marketing s return on investment to the business. Proving and reporting ROI is of the utmost importance to the CMO, who must do the same for those sitting at his or her corporate table: the CEO, CFO, and CXOs. The best technology stack integration will amount to no more than a giant paper weight without proper analysis of the valuable insights gained. If the marketing 11 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

12 operations team is unable to perform and collect, analyze, interpret and produce insights from that data, the entire investment in technology and human resources is wasted. As marketing operations for modern B-to-B marketing organizations require new skill sets, will those who already possess desired skill sets become a valuable commodity as new hires, or will organizations formalize training for these positions? 5. Making business mobile Mobile marketing capabilities are a must-have for marketing organizations in Mobile advertising, apps, messaging, mcommerce and CRM must be part of the marketing mix in 2015 as 70% of marketers see mobile marketing as a critical enabler of products and services. People and companies want and must have mobile solutions that work anytime, anywhere and on any device. According to comscore and Morgan Stanley, mobile Internet access overtook fixed internet access in 2014 as the customers preferred channel of choice. The new consumer-like expectation of modern B-to-B buyers is the ability to get whatever they want in their immediate context and moment of need. Mobile marketing includes advertising, apps, messaging, mcommerce and CRM on all mobile devices including smartphones and tablets. Buyers increasingly switch between their devices, and brands must be able to create those omnichannel experiences. 6. Tackling the content marketing conundrum With organizations increasing investments in content marketing, there is growing pressure on marketers to prove ROI. While nearly all B-to-B marketers are creating content, few are creating effective content. The challenge is to identify what makes content effective, and then figure out how to create it. 70% of B-to-B marketers are creating more content than they did one year ago, even those who say their results are least effective (58%) and those without any type of strategy (56%). Measurement is a key area where B-to-B marketers are struggling: only 21% say they are successful at tracking ROI; however, having a documented strategy helps; 35% of those with a strategy say they are successful. Once again, infographics was the tactic that had the greatest increase in usage (from 51% last year to 62% this year). 94% of B-to-B marketers use LinkedIn to distribute content, making it the most-used social media platform (they also say it s the most effective free social media platform). 12 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

13 58% of B-to-B marketers use search engine marketing, making it the paid method used most often to promote/distribute content (they also say it s the most effective paid method). While organizations are anxious to practice content marketing, why aren t more organizations able to develop and create effective content? From the Fortune 500 marketing boardrooms to the mid-market marketing meetings, we see a common issue: a lack of a formalized, documented content strategy. We also see that even when organizations do have a formal and documented content strategy, the focus of the content is usually from the organization s point of view, which totally disregards the thoughts, feelings, experience, expectations and consideration of the target audience as they move through the modern buyer s 10-stage journey. 7. Harvesting return on technology investments Is being a modern marketer dependent on having the latest shiny new marketing technology object in the tech stack? Before marketing departments can request that new DMP (Data Management Platform) or marketing automation software, there must be a data strategy in place that requires those technologies. How can marketing organizations understand if they are underinvesting or overinvesting in marketing technology? And if the organization does invest in marketing technology, the prevention of underutilization of that technology is of paramount importance in determining the return on investment to the organization. The marketing technology experiment ends in Marketers must face accountability to prove commercial returns from the technological investments, even if the organization acquired and assembled those technologies one at a time for different and various reasons. If this is the case with your organization, a marketing technology audit is the first step in proving ROI on the technology investments. A thorough audit can help you determine the validity and necessity of each piece of technology as it pertains to the success of the whole. 8. Accountable demand generation Will marketers find a way to improve the results of demand generation efforts? The average B-to-B marketing organization only converts 3% to 6% of leads into sales, according to a recent benchmark study by Implisit. Let s look at that a different way: If the organization has deemed 3% to 6% of leads as qualified, then 94% to 97% aren t converting. Organizations drive accountability and performance from their demand generation ecosystem by designing and implementing a best-in-class system of universal measurement in order to secure trust from the organization s leaders in the key performance indicators reported. In a push-and-pull battle between sales and marketing, in which sales demands a quick handoff of leads and marketing wants longer nurture times, marketing will inevitably cave to sales and pass poor quality, premature leads. Though they are the instigators of the problem, sales will ultimately be frustrated by following up on leads that aren t qualified and don t exhibit the BANT criteria. Practicing accountable demand generation means focusing on lead quality over lead quantity, regardless of the urgent demand from sales to pass over more leads. 13 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

14 According to the 2015 Demand Gen Report Benchmark Study, 74% of respondents rank focusing on lead quality over lead quantity as being the most important demand generation goal for Recently, KERN unveiled a Best-in-class Demand Generation Ecosystem: The 8 Pillars of Demand Generation for Revenue Acceleration, which describes each of the eight categories of demand generation that must be implemented to achieve best-practice demand generation. A 24 page executive preview of The 8 Pillars of Demand Generation can be found here. 14 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

15 CHAPTER 5 TODAY S BEST-PRACTICE DEMAND GENERATION Despite the increasing complexity of demand generation, we can still distill best practices down to these seven, basic principles. 1. Find ways to break through the B-to-B marketing clutter How can you break through to the modern empowered B-to-B buyer, which now includes the generational segment of Millennials? Marcus Starke, CMO of Ciena, writes: There s no reason why B-to-B marketing should be boring. Instead, your content should be as engaging, exciting and creative as anybody s marketing, whether you re selling technology or consumer products. People want to get excited and make connections, understand and be understood. 2. Content strategy is essential to content marketing Most modern B-to-B marketers have embraced content marketing, yet few have a documented content strategy. According to the Content Marketing Institute s Content Marketing Study of 2015, only 35% of marketers have a documented content strategy. It s really no surprise that the 35% who properly documented their content strategy are more effective in all aspects of content marketing than those who don t. And it s more than just having a strategy: it s really about what ingredients you used to create that strategy. We ll explore those secret content ingredients in Chapter 9, Next Evolution Demand Generation Content Strategies. 3. Learn more about your customer through buyer personas to create relevant, compelling content In the Demand Gen Marketo 2015 study, they found: Marketers are adopting personas as a significant tool in their demand generation strategy, as just a little more than one quarter (27%) reported that their personas are well documented and aligned to their messaging and 31% of respondents reported that they do not have personas in place, but plan to build them in the coming year. In addition to personas, marketers are using the insights gleaned from harvesting mountains of marketing data to enable their organizations to learn more about their customers; some are even able to accomplish this in real time. KERN has developed what we call the evolution of the marketing persona in our new persona development process: Progressive Persona Profiling. See more about Progressive Persona Profiling here. 4. People buy things, businesses don t. Create personalized content strategically placed where people are likely to consume it. Bryan Kramer, author of Human to Human: #H2H, states: There is no B-to-B or B2C it s human to human (H2H) marketing. Kramer goes on to say: The fact is that businesses do not have emotion. Products do not have emotion. Humans do. Humans want to feel something. And humans make mistakes. 15 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

16 The value and power of the brand can convey both logical and emotional perceptions of the brand, to serve as a halo to the sales organization and ecommerce sites. In a 2015 study, McKinsey states: In fact, decision makers consider the brand a central rather than a marginal element of a supplier s proposition. Our survey indicates that a company s brand is on par with sales as an influencing factor. Branding conveys emotions about a company s services and products. Strong brands convey trust and confidence. Branding and brand storytelling is important in the age of H2H marketing. Branding helps human salespeople tell compelling stories to human buyers. In Demand Gen Report s 2014 B-to-B Buyer Behavior Survey, 61% of respondents said they selected vendors who delivered a mix of content that was appropriate for each stage of their buying process. It is important for marketers to create content relevant to buyers needs at each stage of their journey. Learn more about KERN s 10-Stage Modern Buyer s Journey and our philosophies and processes regarding creating a relevant and compelling content strategy here. Things have changed. Today, there is no such thing as digital marketing ; rather, there is now marketing in a digital world. Placing the content where people can see it requires organizations to rethink their B-to-B media marketing to include the latest in available media purchase strategies, such as contextual targeting, behavioral targeting, programmatic display, Facebook Exchange, content syndication, site retargeting, social graph targeting, native advertising, online video, paid social, search retargeting, , search engine marketing and look-alike modeling. 5. Use marketing automation to drive engagement and nurture prospects Marketing automation was once a nice-to-have and is now a must-have. An organization s ability to nurture both prospects and customers through automated streams is essential for marketing organizations to attempt to stay top of mind. And marketing automation needs companion pieces of technology to fully realize the potential that it needs to be connected to. Marketing technology is a huge field, with hundreds, if not thousands, of vendors now competing for every marketing technology dollar. What s in your tech stack? Does it deliver on the promise of moving your organization forward by harnessing your big data and creating actionable insights for your team to consider when planning new strategies or optimizing current strategies? 6. Pass leads that meet lead-scoring criteria or BANT to sales when leads become MQL, SQL or SAL Here is an area where we see many organizations falling short. It should be simple, but the inability to define a lead, a marketing-qualified lead, a salesaccepted lead and a sales-qualified lead causes marketing teams to fail. The road to failure starts with the wrong usage of the word lead. What is a lead? Is a tradeshow attendee a lead? NO! A clear and concise definition of leads, suspects, prospects and opportunities must be created with a culture of universal understanding of each definition firmly in place throughout the organization as WHAT S IN YOUR TECH STACK? Does it deliver on the promise of moving your organization forward by harnessing your big data and creating actionable insights for your team to consider when planning new strategies or optimizing current strategies? 16 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

17 the very first step. Without a clear and precise definition, creating scoring criteria is impossible. Organizations are consistently frustrated when trying to define the various stages of qualified leads, and this is causing only a few of the leads that they deem qualified to actually convert into sales. How qualified are these leads that convert between 3% and 5% to sales? Probably not that qualified. 7. Route qualified leads to sales for conversion to customers It seems simple enough: create scoring criteria, score leads until they meet or exceed the criteria threshold, then pass those leads to sales. However, even here, complexities abound especially for organizations with multiple sales channels. When dealing with VARs (Value-Added Resellers), distributors, channel partners, installers, implementers and the like, organizations are generally routing their leads into a black hole of unknown results, which always translates into an organization s inability to measure the effectiveness and efficiency of their marketing efforts. It is impossible to prove return on investment when this leads go into the black hole vortex dynamic is present in your sales process. There are software solutions that can help organizations with channel partners route and track leads; however, we re often surprised that organizations with this problem don t seek the software solution to it. For organizations that can track their direct sales specifically, the routing of leads can be derailed for a variety of other reasons. Perhaps the lead scoring wasn t correct in the first place; or sales was never on board with the entire leaddefinition process; or sales is distrustful of leads being sent over by marketing; or the entire lead-distribution process is broken, since sales insists on receiving a certain quantity of leads, whether those leads are ready or not. Why is demand generation not working for most organizations? Where are enterprise marketers failing with their demand generation efforts? We will attempt to answer these questions in the next chapter. 17 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

18 CHAPTER 6 WHERE DO ENTERPRISE MARKETERS FALL SHORT WITH DEMAND GENERATION EFFORTS? To help better understand where next evolution demand generation begins, we shall first take a look at why we believe enterprise marketers fail with demand generation efforts. Opportunities for Enterprise B-to-B Marketers Realize the importance of brand B-to-B marketers who underestimate the power of brands in businessto-business decision making put their organizations at a substantial disadvantage. Create effective content Only 38% of B-to-B marketers find that their content marketing is effective. Market to groups In a complex B-to-B sales environment, there are multiple stakeholders and decision makers causing the buying group to behave in an unpredictable way. Realize that current media strategies are obsolete Never before have marketers had so many channels to choose from. Therein lies the challenge: how can marketers predict which channels are likely to have the greatest impact, especially for those challenged with limited budgets to test new channels? Address the entire demand generation ecosystem Many organizations take a narrow point of view when assessing or diagnosing their demand generation system. However, to truly understand what s working and what isn t, organizations need to assess the entire demand generation ecosystem. Focus on the entire B-to-B customer relationship It s time to expand the focus of B-to-B engagement to the entire customer relationship, including loyalty and retention, which are not traditional priorities for B-to-B marketers. The following chapters will take a closer look at each of the areas where marketers are falling short, starting with the importance of the brand. 18 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

19 CHAPTER 7 THE IMPORTANCE OF THE B-TO-B BRAND B-to-B brands have stronger influences on purchase decisions than many marketers realize. Those marketers who underestimate the power of brands in business-to-business decision making put their organizations at a substantial disadvantage. According to McKinsey, Present-day companies tend to underestimate the power of brands and trademarks in business-to-business decision making. If anything, they think of branding as consumer-facing communication. Demand generation is powered by the beacon of brand. Modern marketing organizations need to build and leverage brand to drive demand. The illumination that the brand provides to the demand generation campaign allows buyers to experience less risk in dealing with a known quantity, the value of your brand. Brand marks, trademarks, logos and taglines are representatives of a brand, but they are not the essence of the brand. The essence of a brand comes from a list of ingredients including the corporate reputation and the perception of the brand s services or products across every touch point for every customer and prospective customer. B-to-B buyers look for signals and emotions related to risk reduction, efficiency, forward leadership and effectiveness. Consumers look for personal emotions of joy, pride and love. In today s world, creating an omni-channel brand experience is at or near the top of the list of both B-to-B and B2C CMOs. How exactly an organization should begin the quest to create a unified brand experience regardless of channel, touchpoint, or location is a question being contemplated in marketing boardrooms across the globe. With all of the points of contact with both customers and prospective customers, organizations have had to put greater importance on communicating a consistent brand experience. Nowhere is that more evident than within the parameters of a B-to-B demand generation effort. But, in fact, some of today s most iconic brands are not, or at least not exclusively, consumer brands. Why does B-to-B branding matter? According to a 2015 report by McKinsey: Decision makers consider the brand a central rather than a marginal element of a supplier s proposition. Brands drive customer decisions Brands drive the bottom line 19 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

20 Brands drive differentiation Brands act as purchasing factors Brands add tangible value We have examined the correlation of brand strength and financial performance and found it to be statistically significant The McKinsey study draws a line in the sand and states definitively that brands do matter in a B-to-B complex sales environment. Look at leaders such as SAP and IBM, which are some of the world s most recognizable brands, regardless of their B-to-B position. MarketingProfs states that Fact-based business branding provides a unique opportunity to close this gap between suppliers messages and decision makers needs and that 56% of businesses expressed difficulties building their brand and developing effective communication strategies. Brand storytelling to extoll the value of the brand through branded content is extremely important. As demand generation is powered by the beacon of brand, that beacon needs to shine bright and long, meaning that the brand strategy and work must be firmly in place before a successful demand generation campaign can be launched. 20 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

21 CHAPTER 8 MARKETING TO GROUPS Patrick Spenner of the CEB and frequent contributor to Forbes, details the complexities of group buying in a series of compelling and convincing articles. Spenner states: In a complex B-to-B sales environment, there are multiple stakeholders and decision makers causing the buying group to behave in an unpredictable way. Even those marketers sitting upon the most sophisticated technology stacks aren t equipped to measure this important dynamic in enterprise B-to-B marketing and selling. Which brings us back to a question that CEOs and CFOs are constantly posing to their CMO counterparts: Why aren t qualified leads converting into sales? Complex enterprise purchase decisions are rarely, if ever, decided by one individual. And, while this notion of a buying group is not new, this group buying dynamic is now front and center, facing marketers who are trying to market to only one member of the group and wondering why their organizations sales conversions are tanking. Whether your organization passes leads at the MQL or SQL level, all of these leads have a Q in the middle of their acronym, which stands for qualified. HOW MANY OF MARKETING S QUALIFIED LEADS DON T CONVERT DUE TO THE DYSFUNCTION AND UNPREDICTABLE BEHAVIOR OF THE BUYING GROUP? The CEO and CFO want to know: what does qualified really mean? After all, if leads are passed to sales in your organization, somehow these leads are deemed as qualified. How many of marketing s qualified leads don t convert due to the dysfunction and unpredictable behavior of the buying group? No matter how complex the marketing technology stack, regardless of the mountains of engagement data that marketing automation and CRM provide, group buying dysfunction flies under your radar. Group dynamics is an unequal mixture of personal feelings, fear, risk, politics and positioning, where the status quo is always the perceived safest choice. What is your organization currently doing to counteract the unpredictability and dysfunction that takes place within the confines of the buying group meetings? 21 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

22 Why do modern marketers need to practice group-based marketing? According to a recent study by the CEB, a group is considerably less likely to buy than a single decision maker. When one additional person is added to the buying decision, those two people are 26% less likely to buy than the individual was. In groups of six or more people, the group is 50% less likely to buy than the individual would be. These are eye-opening numbers. If the average buying team or group is approximately 5.4 people, enterprise marketers are, and have been, fighting an uphill battle to convert corporate buying decisions that are being made by groups. As marketers, we re usually first to point out that dealing with group buying dynamics is a sales problem. After all, sales is intricately and personally involved in the back-and-forth with the prospects. Therefore, sales should know if there is a group problem and sales should know how to deal with it. The truth is, group consensus isn t a sales problem: it s a marketing problem. The reason why is fairly straightforward. According to a combined Google/CEB study, group conflicts peak when the buying cycle is only 37% complete. Sales usually steps in at 57% completion of the buy cycle. Because group conflict peaks early, marketing cannot rely on sales for early conflict resolution. Therefore, marketing must take on responsibility for resolving, or better yet, preventing or mitigating early group conflict to positively drive purchase consensus. When you consider the possible mixed dynamics of any six people in one room trying to decide whether or not their corporation should purchase something, it s a miracle anything gets sold. Group decision-making dysfunction can be attributed to a multitude of things; however, we can narrow it down to three distinct dysfunctional areas: Disparate perspectives: Everyone has a point of view. The sole reason corporations have groups making buying decisions is to bring multiple perspectives and points of view into balance in theory, to make the best possible decision for the organization. It s a great philosophical idea; however, with different perspectives also come different personalities, goals, worldviews and personal agendas. Fear: One of the greatest motivational factors known to humankind is fear. Individuals are uncertain how others in the group will perceive them and their points of view and perspectives. There may be previous baggage between some of the group members that will influence and motivate them to behave one way or another. There are those who avoid conflict at all costs and, on the other end of the spectrum, those who seek out and thrive on conflict. Resistance: Maintaining the status quo, or simply doing nothing, is always the safest choice for decision makers. Other forms of dysfunctional resistance 22 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

23 include unwillingness to reason or compromise, the usual political power struggles and the effects of interpersonal struggles on the rest of the group. Perceived individual risk increases as the size of the buying group increases One might think that the fewer people are involved in the buying decision, the greater the sense of risk for each person involved will become. Not so. Most people believe there is greater risk for themselves as the size of the buying group increases. Specifically, losing respect and credibility was a concern of 50% of respondents in the CEB study as the group size reached six members. The fear of losing a job is significantly less than the fear of losing respect and credibility. How, then, can we as marketers best address the dynamics of group buying in an enterprise environment? How can we speak to disparate perspectives of the buying group members? By identifying shared needs, wants or goals of the stakeholders and leveraging those shared needs within the messaging of the content, marketers can find the buying group s common ground and address common needs to establish a positioning and message that resonates with all or most of the group. What can we do to reduce the resistance from group members, while we arm those most likely to be change agents to champion our cause? Enable the change agents within the group with the collateral ammunition that they need to engage other group members with persuasive and compelling facts, tips, tools and coaching. How do we address and reduce the fear that group members are feeling? To mitigate the fear of change, position the reward as being worth the risk by focusing on the personal, group and organizational benefits. Group based marketing begins with understanding customers personal goals and emotions. What is group-based marketing? Marketers need to understand the unpredictable behavior and the other dynamics of group buying to quell the dysfunction of the buying group with group-based marketing. In order to mitigate dissention among group members, in a quest to help the group make a positive decision, marketers can include the following: Focus on the shared needs of the group What is the rally point that all members of the group can get behind? What do all members of the buying group need? Start with the shared need to build the positive thought process that provides the positive consensus. Address personal stakeholder risk Rather than avoid the issue of why each of the stakeholders is vulnerable to risk, address the risk head-on. Doing this provides 23 Modern Business-to-Business Marketing in the Era of the Empowered Buyer

24 marketers opportunities to nullify the perceived greater risk by discussing the actual risk, along with the greater risk of organizational inertia the risk of doing nothing. Enable change agents of the group Use communication and response devices to identify the likely change agent or agents of the group, and arm them with the information or materials that they need to champion your cause amongst the other members of the group. Understand and leverage interrelations The interpersonal interrelation of group members is an important dynamic to address. There are generally followers, leaders, change agents, apathetic members and proactive members of the group. Develop communications that relate to each of these different dynamics within the group. Group content strategy When setting a content theme, top line message and strategy for content across the 10-stage modern buyer s journey; develop different content that addresses the different points of view across the group buying dynamic. Group lead scoring, nurturing One of the major issues with current best-practice demand generation is that an individual member of the group may meet the criteria to be passed to sales as an MQL, SAL or SQL, while the other members may be nowhere near ready to be passed to sales. Scoring and nurturing needs to be rethought with the group dynamics top of mind. Group influencer marketing There are influencers of each member of the group, as well as influencers within the group. Understanding the organizational structure of the targeted prospect company will enable you to market around the prospect and the group, as well as within the group. Personalization within groups We know that personalization works to significantly lift response and engagement. Using personalization within the group allows the proposition to be framed for the group. Group lead distribution Working within the new parameters of group lead nurturing and group lead scoring will require a new criteria threshold to be determined for the passing of group leads that meet the MQL, SQL and SALs. During our development of group-based marketing (GBM), we fielded several repeated questions that queried us on the difference between GBM and accountbased marketing (ABM). 24 Modern Business-to-Business Marketing in the Era of the Empowered Buyer