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Lead Generation: A closer look at a B2B company’s cost-per-lead and prospect generation

July 14th, 2011 7 comments

Update: All MarketingSherpa newsletter articles are now permanently open access.

 

Several weeks ago I had the chance to speak with Jon Miller, Marketo‘s Vice President, Marketing, and co-founder of the company. Our talk was extensive and covered Marketo’s entire marketing process and philosophy, and the main result was a MarketingSherpa B2B newsletter case study (members library).

Even though the story was extremely in-depth and revealing in covering the marketing automation company’s practices — so much so that when my editor tweeted the story he wrote, “#B2B Marketing Strategy: Revenue-oriented approach leads to 700% two-year growth http://j.mp/lWT7PS @jonmiller2 opens up the kimono” — not everything Jon and I discussed made it into the case study.

One result of the extra material I have on hand was a popular MarketingExperiments blog post on testing form field length, and a second result is today’s SherpaBlog post going into more detail about Marketo’s cost-per-lead across its prospect generation efforts.

It’s a prospect, not a lead

Even though “lead generation” and “cost-per-lead” are something of industry terms of art, Jon explained to me that Marketo has a rigorous naming system for its eight-stage buying cycle, or what it calls a “revenue cycle:”

1. Awareness

2. Names

3. Engaged

4. Prospect

5. Lead

6. Sales lead

7. Opportunity

8. Customer

For someone to move from “engaged” to “prospect,” they must visit Marketo’s website and either fill out a form or download content. At this point they undergo demographic lead scoring. Using this scoring, Jon says a prospect is, “the right kind of person at the right company.”

Marketo defines a “lead” how most companies might identify a marketing-qualified lead, so at Marketo “prospects” are in effect its traditionally defined leads. Confused yet?

This chart takes a look at Marketo’s prospect generation metrics for the last two quarters of 2010. You will notice above the line are efforts Jon pays some marginal cost for and each includes its cost-per-lead. Below the line are Marketo’s non-marginal-cost inbound marketing efforts.

Click to enlarge

Virtual beats traditional in trade shows

Virtual trade shows stand out in this list because they create the most prospects at the lowest cost-per-lead. In fact, the figure on the far right of this chart, lead-to-opportunity index, is calibrated to the virtual trade show statistics.

“For us, virtual trade shows work great,” Jon says. “You get the database really cheap and they become leads, too.”

He adds that pay-per-click advertising has a fairly high cost-per-lead, but they also convert to opportunities at a high level at the highest velocity (in terms of least days), and they almost double the closest conversion-to-lead figure. It is worth it to Marketo to spend the extra cost-per-lead money on PPC ads.

The worst overall performing tactic on the chart is the traditional trade show. These events have the highest cost-per-lead by a long shot and don’t offer a strong conversion-to-lead number, and the strong lead-to-opportunity conversion ratio doesn’t offset the weaker stats.

Based on this information from last year, Jon told me he plans on cutting back on traditional trade shows this year and is spending that money on traveling to captive event road shows.

Inbound rising …

One very interesting aspect of Marketo’s prospect generation chart is the performance of its non-marginal cost inbound marketing tactics. Across the board they meet, and often greatly exceed, the baseline lead-to-opportunity index. Velocity and conversion-to-lead also compare very favorably for most tactics.

And the cost-per-lead for these inbound efforts? Effectively zero.

What lead generation tactics do you find successful? Do you track the success rate and bottom-line impact of your inbound efforts? Let us, and your peers, know what you think in the comments section.

Related resources

Lead Gen Overhaul: 4 Strategies to Boost Response Rates, Reduce Cost-per-Lead

Custom Landing Pages for PPC: 4 Steps to 88% More Leads, Lower Costs

Lead Generation: How to get funding to improve your lead gen

Social Media Marketing: You value (and earn ROI on) what you pay for

Lead Marketing: Cost-per-lead and lead nurturing ROI

Search Engine Marketing: Finding appeal for your PPC Ads

Social Media Marketing Research: Rolling up my sleeves and getting social

The Indefensible Blog Post: Forget Charlie Sheen, here are 5 marketing lessons from marketers

July 5th, 2011 3 comments

I’m sure you’ve seen these blog posts before. They’re looking for a hook, so they throw a topical subject in the title to get you to click, and then share the deep marketing wisdom that you would naturally expect to learn from Charlie Sheen, The Bronx Zoo Cobra, and Justin Bieber.

I thought of this topic the other day because we actually did something I just knew we would never do on MarketingSherpa. We published those two proper nouns – Justin and Bieber – right next to each other.

In fairness, it was in an excellent email marketing case study about a very impressive trigger alert program, and Justin Bieber was only used as an example of search keywords this events company was targeting. But you better believe Senior Reporter Adam Sutton endured a relentless week of teasing for including the Biebs in his case study. There were the Photoshopped pictures. There were “Belieber” taunts.

Why? Because, and here is my indefensible blog post (with a hearty tip o’ the hat to Esquire magazine), marketers can’t learn anything from Justin Bieber. Or Lady Gaga. Or that kid who got his 15 minutes of fame for pretending to be in stuck in a weather balloon.

Think about it, what are 3 lessons from Charlie Sheen? 1. Be born to a famous dad. 2. Get a formulaic but highly rated sitcom. 3. Have an extremely weird but very public meltdown (using social media)

Does this really help your marketing campaigns? Get some ideas to generate more leads? Increase sales?

So, here’s the approach we take at MarketingSherpa. Perhaps the best people to learn marketing lessons from are…wait for it…actual marketers. That’s why we survey more than 10,000 marketers every year for our benchmark reports. That’s why we conduct more than 200 interviews every year for our free marketing newsletters. That’s why we invite dozens of marketers to present their case studies to their peers at our summits. And that’s why I’m writing this blog post today.

So, if I had to break down five marketing lessons I’ve learned from marketers, I would say…

1. Successful marketing comes from hard work, not “secrets” and “tricks”

Internet marketing is flat out hard work. The successful marketers I’ve seen go-to-market with a regimented marketing plan.

They understand what KPIs are key to their success – both the intermediate metrics that will help them make course corrections, as well as the key results that are critical to their business leaders.

They find ways to tear down artificial silos in their organization – between Sales and Marketing, between online marketing and offline marketing, between email marketing and social media marketing – to facilitate a cohesive funnel that drives customers to conversion.

They tame unwieldy, disjointed technology platforms to create tools that improve marketing campaigns and create clear, unified reports. They do this even though they don’t have a tech background. They do this even if it means having long conversations with IT about why Ubuntu is better than Windows.

But they don’t have “secrets to Internet marketing success.” And they don’t have “10 supercool tricks to boosting SEO.” They have war stories. And if you can get just a few minutes in their busy day to hear them, you just might learn something.

The battles are won in the trenches.

2. Your customers don’t care about your emails, your PPC ads, or even your TV campaign

They don’t even care about all that fun inbound stuff like your blog posts or YouTube videos. And they certainly don’t care about the latest features of your product, your mission statement, or your corporate structure.

They care about doing their jobs better. They care about having clean water for their kids. And they care about taking their wife out for a 12th anniversary dinner that she’ll never forget.

Never confuse a feature with a benefit. And never confuse a marketing “benefit” with what really matters to your customers.

3. Successful marketers have losses

This is marketing, folks. You don’t have to be one of the “crazy ones,” but you do need to push the limit on what your company thinks is possible.

As Theodore Roosevelt said, “There is no effort without error or shortcoming.”

If you don’t have losses – a “negative lift” on a test, a failed product launch – you’re not pushing hard enough. And if you don’t have losses, you’re not really learning anything. You’re just guessing.

The great thing about digital marketing is that it has never been easier to learn about your customers. You’ve got real-time data you can analyze and an endless possibility of tests you can run. Test two headlines you simply can’t decide between, two offers, two entirely different approaches against each other in a real-world, real-time environment and let your customers tell you which one is better. Test new landing pages against your top performers.

Sure, it’s scary, you might lose. But if you do it right, you’ll definitely learn.

4. Strategy is better than skill

This is something that I’ve heard Dr. Flint McGlaughlin, Managing Director, MECLABS, say in almost every meeting I’ve had with him. Drill it into your team as well.

Marketers are all too used to having a goal placed in front of them – double leads, gain market share – and churning and burning and blasting and using every tool they can think of to hit that number. Just…one…more…email send…will do the trick.

Sometimes it helps to step back and look at the big picture. Is it worth scrapping and fighting for a tenth of a point of market share with your fiercest competitors? Are you inundating your lists with offers?

Take the time to step back from the marketing machine and determine what your value proposition truly is. Don’t dictate your value to your customers. Discover what they find valuable about your products and services. Why do they put their job on the line to hire your consultants? Why do they part with their precious cash to buy your products?

As with any job, you can work harder, or you can work smarter.

5. Be the customer advocate

As a marketer, you spend almost every waking moment making a proposition to the customer. That makes every customer your customer. So make sure your company comes through.

Stay in constant contact with customer service, product development, services, manufacturing, and sales to make sure you are truly serving the customer. What are customers complaining about? What are you doing right? How can you make their lives easier, better, smarter, more fun, more fulfilling? Are sales reps over promising? Does everyone understand the value proposition of your brands? Do you all speak with the same voice? Do you walk the walk and live the brand?

Hey, that’s no easy task. But if you’re looking for easy tasks, you’re in the wrong business. See point #1 above.

Your customer is empowered like never before in the history of commerce. Today, you must assume that every customer is a publisher as well. How would you react if you knew the editor of The Wall Street Journal was eating in your restaurant, trying on a suit in your store, or purchasing your software platform? There is no quicker way to sink your brand and your marketing campaign, and the huge amounts of time and money you have invested in them, than by ticking off the editor.

You know what you expect when you’re the customer. Under promise and over deliver.

And to over promise to you, my audience, my customer, I dug up a sixth lesson. But instead of telling you one more thing I’ve learned from you, I asked author and behavioral expert, Beverly Flaxington, what she’s learned from marketers. Beverly has built her career around understanding other people. Here’s what she had to say…

6. Provide your audience the context

In too many cases, a marketer develops information and materials based solely upon the data and information about a particular product or service. The marketing material reads like this: “We do this. This is what we do. This is how we do it.” It’s a great deal of data without a lot of context around why it is important to the targeted audience.

The missing component is the “So what?” What’s so important about how you do what you do? Why should someone care about it? What is it going to do for them and how will it do it? This goes deeper than the idea of selling benefits. It actually asks the marketer to create language that speaks TO an audience about their needs, and helps that audience to easily make a connection as to why what the marketer is proposing is good for them.

As you develop materials or write marketing copy, ask yourself the “So what?” question as you make statements and provide information. Think in terms of “This is good for our audience because…..” The process can be very eye-opening because instead of assuming that someone will get why what you’re saying is so important, you can more likely guarantee they will understand!

Thanks for reading today’s blog post. Stay tuned to the MarketingSherpa blog next week, where we’re going to talk about what marketing lessons you can learn from Michele Bachmann, New Mexico wildfires, and Greek debt.

Related Resources

Evidence-based Marketing: This blog post will not solve your most pressing marketing challenges…yet

Loyalty Marketing: How to get customers to stick around (and keep buying)

The Last Blog Post: How to succeed in an era of Transparent Marketing

The Last Blog Post: Marketers must embrace change


Email List Growth: Finding low-cost and no-cost ways to grow your database

July 1st, 2011 2 comments

A common challenge we’ve heard at our Email Marketing Workshops is that marketers want to know how to effectively grow their email lists. This was true at the Seattle and Boston workshops, and I expect it will continue through Washington, New York, San Diego and Austin.

One tactic we describe is how to leverage existing channels between your brand and your audience to grow your list. Marketers can study how their audiences receive information from their brands and test adding an opt-in request to those channels.

For example, the New York Public Library used its transactional emails to grow its list. The library already sent automated emails to remind patrons that books were due. The marketers tested a simple addition to these emails:

“Get the latest NYPL news and events. Sign up for our newsletter at: [shortlink].”

This two-sentence request increased the library’s opt-ins by 120%.

More than transactional emails

I really like the above example. It shows how a simple idea in an existing channel can grow a database at nearly no cost.

Your company is not likely to be a library, but this idea extends beyond late notices for books. I saw another example while flying to our Email Workshop last week.

Delta In-Flight Email Opt-in

I took this picture on a Delta flight from Memphis to Seattle. I was poking through the touch-screen personal television at my seat and noticed, lo and behold, that Delta wanted my email address. As you can see in the second sentence, the page does a good job of emphasizing the value I’ll receive by handing over my information.

Here’s the next screen:

Delta In-Flight Email Registration form

I am not very sharp on the history of in-flight televisions, but I assume these screens were not installed solely to collect travelers’ email addresses. Instead, I assume that the opt-in request was added later at the suggestion of a clever email marketer. This is another example of a company leveraging its existing channels of communication to build its list.

Look for relevant audiences

In our Email Marketing Workshop, we spend the first half of the list-growth section emphasizing the importance of list quality and how it can be improved. We really hammer on the point that the size of a database is not as important as its quality.

For example, a large database that is loaded with disinterested subscribers is not going to help your marketing nearly as much as a smaller database with subscribers who are interested in your content and offers. You want high-quality subscribers who enjoy receiving your emails and clicking your links.

One way to help build a quality database is to invite only relevant people into your email program. The two examples mentioned above do just that.

  • The New York Public Library’s transactional emails reached people who had books checked out. These people had visited the library, so they might have been interested in receiving news about the organization.
  • Delta reached people in-flight on a Delta plane. These people were travelers, and they traveled with Delta, so they might have been interested in receiving offers and updates from the airline.

So when you’re looking to your existing channels to help grow your list, be sure to test the channels that reach the most relevant audiences for your email program. You don’t want to invite just anyone into your database. You want to build a high-quality list.

Related resources:

Email Marketing LEAPS Advanced Practices Workshop

Members Library — Growing Email Lists with Social Media: KFC’s Facebook tool adds subscribers

New Chart: Most effective email list growth tactics

Maximizing Email List Growth: How the New York Public Library drove a 52.8% lift in newsletter subscriptions

Email Marketing: Three lessons learned at the MarketingSherpa Email Marketing LEAPS Advanced Practices Workshop

B2B Marketing: Building a quality list

Lead Generation: 4 critical success factors to designing a pilot

June 30th, 2011 No comments

In my last blog post, I talked about getting funding by framing a strategic lead generation initiative properly for the sponsoring executive. Let’s talk about the first step on the road to an improved lead generation capability –  configuration of a pilot.

While there is an infinite number of ways to develop a pilot, a well-designed pilot depends on:

  • The current gaps in your lead generation machinery
  • Perceptions of lead generation in the C-Suite,
  • The risk appetite of the company
  • And your own credibility.

These four guiding principles, however, can help you scope a pilot in a way that leads to long term-success:

1. Start where the economics are most forgiving.

There are two big economic factors to keep in mind when designing a lead generation pilot.

The first is the deal size (or annual recurring revenue or lifetime value). The smaller the deal size, the lower your lead costs must be. Getting to a low cost per sales-ready lead takes a great deal of efficiency and scale. So why target a market where you must be highly efficient to have success?

The second economic consideration is probability of purchase. Customers, for example, are typically more likely to buy something else from you than non-customers are. There may be vertical markets or other segments where your products or services have a better success rate. Responders are more likely to buy than non-resonders. The higher the probability of purchase, the higher your conversion is going to be and the lower, therefore, your average deal size can be.

Combining a high potential average order size with a high probability of purchase gives marketers the most room for mistakes and course correction.  So play it safe.

Action item: Start with the most probable segment where you can sell big ticket items so that you have lots of room to experiment and course-correct and then test and iterate your way to the margins of your market.

2. Keep it simple

Lead generation has gotten very complex. You are not going to be able to optimize everything at once. So don’t try. Instead, tackle things in stages and look for ways to narrow the scope: fewer sales people receiving leads, a single solution area and/or market segment, and so on.

Action item: Once you determine where the low-hanging fruit is, figure out how to narrow the scope of what you’re doing so that it manageable by clarifying the objective and using that objective to simplify the pilot.

3. Make the pilot long enough for course corrections

Too often, marketers do not give themselves the room to learn and improve. New teleprospecting reps, for example, need 30 to 60 days to get reasonably good at what they do, and that’s assuming you have the right playbook and training to give them.

You may need time to see what competitors are doing, analyze online traffic patterns, refine your service level agreement with Sales for the pilot, or any other of a number things. But most importantly, pilots should be experiments in optimization so give yourself long enough to:

  • a) course correct
  • b) sample properly
  • c) gather sufficient results.

And the longer the buying cycle, the longer it will take to get more definitive feedback on the outcome of the leads. And the lower the traffic, the longer the test must continue to gain sufficiency to project the results with the necessary confidence level.

If possible, make the pilot last for an entire fiscal year with the understanding that you’ll come back to management sooner if possible with a plan for scaling the initiative. That way, you won’t have to go “dark” while management decides on the speed of scaling your lead generation initiative and you’ll have plenty of room for testing and optimizing and tracking results.

Action item: Develop a conservative timeline that shows key milestones at particular stages. Make part of the deliverables of a milestone or two the new knowledge the company will have about optimized lead generation processes.

4. Base the measurement of the pilot on what you can control .

While you ultimately want to drive revenue, you can only control the quality of the leads you give to sales people…not what they do with those leads. So only promise the executive stakeholder(s) that by the end of the pilot, you will give salespeople what they ask for at least 75 percent of the time (90 percent or higher is possible).

You can and should refine your customer profile and lead definition and perhaps even the follow up and reporting processes. That’s what the pilot is for, in part. With enough experimentation, you’ll get to a definition that works for sales and that marketing can deliver consistently and scale.

Action item: Collaborate with sales on an ideal customer profile, a lead definiton, and the follow up and reporting requirements you will need in exchange.

Lead generation is a set of capabilities, processes and practices that you can always improve. So it’s a never-ending journey. And these four design principles will give you the best opportunity for that kind of long-term success.

Related Resources

Lead Generation: How to get funding to improve your lead gen

Lead Marketing: Cost-per-lead and lead nurturing ROI

B2B Lead Generation: Why teleprospecting is a bridge between sales and marketing

Lead generation: Real-time, data-driven B2B marketing and sales

Lead Generation: How to get funding to improve your lead gen

June 24th, 2011 4 comments

You’d like to take your lead generation function to a new level. But how? The cost of all you want to do is far more than you suspect you can get budget for. Plus, you’ve seen others try new things that didn’t work. They lost credibility and any chance for getting funding in the future.

In this economy, that’s the last thing you need.

Let me share a blueprint that’s worked for me. I first used this blueprint ten years ago to help Denny Head, who worked at Avaya, get the funding that resulted in a billion-dollar sales lead pipeline in 20 months.

When framing your lead generation pilot for your CMO, keep these four critical success factors in mind:

1. Sell a vision.

Lead generation scales sales organizations. That’s a big deal. Sales channels are the least scalable part of the go-to-market machinery.

And yet, a recent survey I conducted with an American multinational conglomerate corporation (the name has to stay confidential for competitive reasons, found that sales reps were spending more than 40 percent of their time looking for sales opportunities (i.e., generating their own leads). Even worse, new reps spent more than half of their time just identifying opportunities.

That use of time has a material cost. It also robs sales of revenue production. If sales reps are spinning their wheels generating their own leads, they’re wasting time that could be better spent closing deals.

So, a very large expense is at stake, far bigger than the cost of funding your most ambitious lead generation plans. More importantly, the potential for increasing the revenue capacity of your sales team can pay for incremental investment many times over.

In addition to the financial benefit, a lead generation model that delivers insight and predictability about revenue production is a great benefit to the C-Suite.

Action Item: Survey your sales organization to find out how much time they spend looking for leads. They may not realize how pervasive the problem is. In the survey I mentioned above, even sales managers underestimated how much time was being lost. On average, they underestimated the amount of time their reps were devoting to lead identification by 27 percent.

Then use the information from that survey to estimate the cost of this time to the company and to reveal how much money the company is already spending on “lead generation.” Then collaborate with sales leaders to determine what kind of revenue production that additional sales capacity might represent.

2. Tie the vision to corporate objectives. Often, marketers are so focused on tactical considerations they fail to see the big financial picture.  Each year, the CEO develops a list of strategic objectives. Every smart department head should look at those objectives and position any initiative in that light.

For example, if the objective is higher profitability, then show how lead generation can take cost out of the business. If the objective is revenue growth, then show how lead generation can contribute to revenue growth.

Action item: Find out what the strategic objectives are for sales and then figure out how to tie lead generation to one or more sales, marketing, and/or corporate objectives. Focus on what truly matters to your business leaders. What are their KPIs? If you can move the needle even a little in a metric that matters, your lead generation initiative will be a success.

3. Under-promise and over-deliver.

Too often, marketers think they need to promise a miracle in order to get funding. That’s crazy. By painting a big enough picture of the end-state, you can soft-sell the pilot phase.

Collaborate with the executive stakeholder(s) about their priorities and success metrics. As best you can, moderate expectations. Remind everyone of the impact of the buying cycle on revenue production. The buying cycle will elongate the payback.

And make sure everyone understands the need to test and iterate during the pilot. In fact, I always stress the importance of continuous improvement through a repeatable process and scientific experimentation. It works in manufacturing. Why can’t it work in marketing?

Action item: Find relevant examples of counter-intuitive marketing experiments that produced big results. (Hint: Our sister company, MarketingExperiments, is a great resource).

4. Provide a roadmap.

A vision is great, but you need to have a practical plan on how to get from wherever you are today to where you’d like you’re company to be. Maybe you need to improve the marketing database. Maybe your content strategy needs re-engineering. Perhaps you need to do lead nurturing and lead scoring in a new, shiny marketing automation system.

And maybe you need to tie social media into the mix and convert more visitors into leads via paid search. And, well, the list is endless and growing all the time with cool possibilities.

There are “go-fast” scenarios and “stick-your-toe-in-the-water” scenarios. Which one is right for you depends on the risk appetite of the sponsoring executive, your personal track record, and the perceptions of lead generation in the company.

Action item: Collaborate with the sponsoring executive on a road map. Explain that there are many ways to get to lead generation Nirvana and it all depends on the tradeoff between the level of proof required and desire for speed and scale.

While there are many important considerations, I’ve found that these four factors are essential to get executive buy-in and to the long-term success of your lead generation initiative.

Related Resources

Lead Marketing: Cost-per-lead and lead nurturing ROI

B2B Lead Generation: Why teleprospecting is a bridge between sales and marketing

Lead generation: Real-time, data-driven B2B marketing and sales

B2B Lead Generation: Increasing leads 296% by analyzing Web traffic – Case Study

Evidence-based Marketing: This blog post will not solve your most pressing marketing challenges…yet

June 23rd, 2011 5 comments

Here at MECLABS, we have a pretty singular focus – to help you optimize your sales and marketing funnel. Or as I like to say in every email I write: Our job is to help you do your job better.

But, as Tom Cruise said to Katie Holmes (or maybe it was Cuba Gooding, Jr.), “Help me, help you.”

So evidence-based marketers, on what topic do you need more evidence? Evidence to help you understand what your peers are doing. Evidence to help you understand what really works. Evidence to do a little internal marketing to your business leaders (or for the agency folks out there, your clients)?

Below are a few key topics you’ve been telling us you want to learn more about. We’re trying to decide on the topic for our next MarketingSherpa Benchmark Report. In which topic should we invest 5 months of a research manager’s time digging into to discover the evidence you need.

Please take 7 seconds and rank them in order of importance in the poll below. Or if we missed a topic entirely, please tell us in the comments section below.

In no particular order, the nominees are…

  • Analytics – Using analytics and metrics to drive business decisions from which products to launch to which landing page works best to which content is most relevant to your audience.
  • Mobile – Mobile tactics can vary slightly or widely from traditional approaches, so how are marketers developing and implementing wireless strategies? How are marketers planning their budgets and measuring their results? And, for the love of all that is holy, when on Earth will I be able to view Flash on my iPad? OK, maybe not that last one. But seriously Steve, it would be nice.
  • E-commerce – What do direct sale sites view as the top opportunities for the upcoming year? Are they investing in site speed enhancement, conversion optimization, or both? And is social media impacting purchases?
  • Agency and vendor selection and management – What factors play into how marketers choose and compensate agencies? How do marketers determine if they need a software platform in a specific space? And if so, do they buy, go with open source, or attempt something homegrown? How do you get IT’s support in choosing a vendor? And then, more importantly, how do you get IT to stop talking about “Star Trek: The Next Generation” already?
  • Salary survey – How much does Bill make?  He hasn’t had a good idea since 1993. And his tuna salad lunches stink up the office. OK, if not Bill, then what about the rest of your peers. Are you being fairly compensated? And what should you pay your team?
  • Lead generation – Which information do marketers view as most valuable? How do they keep their databases updated and clean? Do marketers find third-party lists effective? And in an age of social media, do marketers value a big email list as much?
  • Content marketing and lead nurturing – Do my peers outsource content creation or do it in-house? If so, how? Do they have their own teams? Or just beg, borrow, and steal from other departments?

B2B Marketing: Embracing customer centricity

June 21st, 2011 3 comments

The pressure for B2B marketers is on. Buyers are empowered with an ocean of information available to them online through search engines and social media sites. They are researching their purchasing decisions on their own instead of engaging with Sales early on. Trepidation exists among the marketplace because of a struggling economy, making it more difficult to close new accounts.  Winning over modern B2B buyers requires organizations to revolutionize their marketing approach, and adopt a truly customer-centric approach.

At MarketingSherpa, we have just launched our annual B2B Marketing Benchmark Survey to identify key tactics B2B marketers can use to adopt customer centricity, and ensure success in an increasingly  challenging environment.

Let’s hone in on this concept of customer centricity. What is this and why is it so important to us now?

In today’s marketplace, the B2B buyer has the power. They can research their purchasing decisions before we even know who they are. They have instant access to peer and third-party opinions of our products and services through social media sites, and information coming directly from the company is received with more skepticism than ever before. We have to earn the trust of our buyers if we ever hope that they will choose us over the competition. This brings me to my next question:

How well do you know your customers?

I am currently in the middle of our B2B Marketing Workshop tour, and the number of attendees that do not yet have buyer personas established for their audience continually surprises me. This is a critical first step towards embracing customer centricity and achieving B2B marketing success. Before you can deliver content to your audience that is going to build trust and drive conversions, you must have a solid understanding of their interests, needs, motivations, etc.

A buyer persona is a detailed profile that represents an actual, real-life group of your target audience. It includes common interests, motivations and expectations, as well as demographics and other behavioral characteristics. Buyer personas enable you to deliver highly relevant content to your audience that will build trust and drive qualified conversions.

In a perfect world, we would be able to develop one piece of content and have it appeal to your entire audience. In reality, it is likely that your market can be broken up into multiple buyer personas. You will need to first identify these personas, and then develop unique content for each profile.

So, how can you get started with the first step, identifying your buyer personas?

This process is far too complex to cover in detail for one blog post. Plus, you’re busy – so I’ll just give you the highlights:

1. It’s going to start with research, and a lot of it. Start by talking to customer-facing departments. Ask them about motivations, challenges, common objectives, etc., for your best and worst prospects and customers.

2. Next, talk directly to your audience. Get your prospects and customers on the phone and ask them directly about their interests, motivations, challenges, etc. Ask them what types of content they want, and what format. Be sure to be in contact with best and worst prospects. You will want to be able to distinguish the differences that exist between these two groups.

3. You can also mine your in-house database. Look for common traits that exist for customers with large deal sizes, shorter timeframes to purchase, most repeat purchases, etc. Then identify common traits for customers that make returns, have the smallest deal sizes, or are for some reason less profitable. What is the difference between these two groups?

4. You can also conduct a survey of your audience, asking them about their interests, challenges, etc.

This research will get you started on identifying buyer personas, and adopting a customer-centric mentality. You will then be able to develop content that will be uniquely relevant, interesting and valuable to those groups in order to build trust and drive qualified conversions. You will also be able attract more of your ideal customers, instead of customers that make returns and are not a fit for your solution.

Related Resources

MarketingSherpa B2B Summit 2011 – in San Francisco and Boston

B2B Email Marketing: Why renting third-party lists is among the worst tactics

B2B Marketing: Combining sales and marketing knowledge to improve lead qualification

MarketingSherpa 2011 B2B Marketing Benchmark Report

B2B Email Marketing: Why renting third-party lists is among the worst tactics

June 17th, 2011 22 comments

I heard an offhand comment the other day from an agency marketer who said most of her B2B clients focused their email marketing on rented third-party lists (despite her advice). I thought to myself, “Really? That can’t be very effective.” I looked at some data and found I was right.

Although 46 percent of B2B email marketers use third-party lists:

  • Only 11 percent score the tactic at “four” or “five” on a five-point scale of effectiveness, with “five” being the most effective, according to the MarketingSherpa 2011 B2B Marketing Benchmark Report.
  • 57 percent score the tactic at “one” or “two”

These numbers almost completely reverse when we look at B2B marketers emailing to a house list. About 95 percent of B2B email marketers send to their own lists.

  • 67 percent consider the tactic a “four” or “five” in terms of effectiveness on a five-point scale, with “five” being the most effective.B2B email marketing love your audience
  • 5 percent consider it a “one” or “two”

For me, these stats help underline the point that high-quality email databases are workhorses in marketing departments, and that marketers need to steer away from thinking about email marketing as advertising.

Love and Respect Your Audience

To elaborate on a point that Brad Bortone made in yesterday’s post, I would like to emphasize that effective email marketing is based on relationships. These relationships hinge on expectations, promises, and trust.

This might sound like fluffy marketing-speak, but bear with me. Specifics are coming.

First, people have expectations when they opt into your email program. You need to clearly set these expectations during the opt-in process by describing:

  • The content they’ll receive in your program
  • How often they’ll receive emails

Once they opt-in, you’ve officially promised to meet these expectations. If you fulfill your promise and only send what they’ve agreed to, that will build trust. Subscribers will trust your emails will have something they want. That trust translates into higher open and clickthrough rates and helps build an effective program.

If you move outside of the expectations, you are assuming subscribers want something else. You’re breaking your promise, harming your relationship, and undermining trust. You’re encouraging them to click “spam,” ignore your emails, or (at best) opt-out — none of which are good.

So you cannot assume people want your emails. You have to clearly set expectations, keep your promise, build trust and establish good relationships to get good results.

Email Marketing is Not Advertising

Strong email relationships can only come from your house list. On a third-party list, their expectation is to not hear from you. They never opted-in. You’re assuming they want something they’ve never asked for, and you’re encouraging them to click “spam.”

Sure, sending to third-party lists can work. But look at the data above. You’re likely better off investing in your database, segmentation, and relevance.

The mindset that “we’re just going to reach people, even if they’d rather be doing something else,” is an advertising mindset. That’s what marketers do on television. I’d rather be watching Pawn Stars, but instead I’m stuck watching ads.

Advertising is great, but it’s not good email marketing. Good emails are anticipated by subscribers and are relevant to their needs. This is why a good house list is so valuable. Bad emails arrive out of nowhere and interrupt people when they’re doing something else. This is why emailing third-party lists is among the least-effective B2B email marketing tactic today.

Related resources

MarketingSherpa 2011 B2B Marketing Benchmark Report

Email Marketing: Three lessons learned at the MarketingSherpa Email Marketing LEAPS Advanced Practices Workshop

Chart: Top tactics organizations use to improve email relevancy

Email Deliverability: Always test emails that link to third-party sites

MarketingSherpa Email Marketing LEAPS Advanced Practices Workshop

New Technology Tracks the Eyepath of Website Visitors

June 14th, 2011 7 comments

A recently published research paper may prove to be of great interest to marketers. “No Clicks, No Problem: Using Cursor Movements to Understand and Improve Search,” by Jeff Huang, Information School University of Washington; and Ryen W. White and Susan Dumais of Microsoft Research, takes a look at the correlation of eyegaze on a webpage and cursor placement.

This research found a high correlation between where the cursor was placed on a page and where the user was actually looking, and created a tiny JavaScript capable of running invisibly on a webpage that tracks where the cursor is in real time providing information on where that webpage visitor is looking and, possibly more importantly, pausing throughout the visit.

This is from the abstract of the linked paper:

In this paper, we examine mouse cursor behavior on search engine results pages (SERPs), including not only clicks but also cursor movements and hovers over different page regions.

We: (i) report an eye-tracking study showing that cursor position is closely related to eye gaze, especially on SERPs; (ii) present a scalable approach to capture cursor movements, and an analysis of search result examination behavior evident in these large-scale cursor data; and (iii) describe two applications (estimating search result relevance and distinguishing good from bad abandonment) that demonstrate the value of capturing cursor data.

Maybe most intriguing for marketers is the final line of the abstract, “Our scalable cursor tracking method may also be useful in non-search settings.”

The JavaScript code that drives this online tracking tech is a mere 750 bytes and had a negligible effect on the load time of webpages hosting the script. Although this technology is not yet commercially available, it should eventually present another interesting avenue for marketers to test website visitor’s behavior.

Click to enlarge

Jeff Huang, the team member who implemented and deployed the cursor tracking code, mined the cursor data, and wrote parts of the paper, took a few moments to answer several questions I had about this intriguing technology.

Tell me a little more about this research.

Jeff Huang: We examined mouse cursor behavior on search engine results pages, including not only clicks but also cursor movements and hovers over different page regions. In an eye-tracking study, we showed that cursor position is closely related to eye gaze. We developed a scalable approach to capturing cursor movements, and an analysis of search result examination behavior for over 300,000 queries from around 22,000 people. Finally, we were able to use cursor movements to estimate search result relevance and distinguishing good from bad abandonment.

Marketers are probably familiar with click and heatmaps, and this seems closely related to that technology. Do you think this technology can be useful for more than search?

JH: Cursor movements can create heatmaps with a similar appeal as click maps. While click maps show only the regions being clicked, movement heatmaps can also show regions that received attention by proxy of the cursor position. Often clicks are not available for smaller sites so movements can provide richer information.

Could marketers utilize this tech for webpage research to improve, say, the eyepath of the page? Is cursor movement correlated with a page visitor’s eyepath?

JH: Yes, as we mention in the paper, the cursor is typically within 200 pixels of the eye gaze. The most common position for the cursor is to be slightly below what the user is looking at. We also found that the cursor follows the eye gaze by around 200ms [milliseconds] (although the data for this is highly variable).

Does this technology offer other applications for marketing efforts or webpage testing?

JH: Sure, having records of the cursor movements allow marketers to replay the user’s session on the Web page. For example, they can see which order a user filled out a form even if they did not complete the form and left the page instead. We have developed an efficient method to record the cursor movements so they take a minimal amount of space and can be collected without disrupting the user.

Is this tech publically available, and if not, when is commercial roll-out expected?

JH: This was developed as part of an internship at Microsoft Research last year, and deployed to internal users. I will return to Microsoft again this summer, but I cannot comment on its commercial availability.

B2B Marketing: Combining sales and marketing knowledge to improve lead qualification

June 10th, 2011 5 comments

Few issues create more conflict between sales and marketing than lead qualification criteria. In the MarketingSherpa 2011 B2B Benchmark Report, 72 percent of marketers listed generating higher-quality leads as their single biggest challenge, up from 69 percent the prior year. In most cases, Sales and Marketing each see lead qualification from very different perspectives, both of which have value.

In sales, management spends considerable time, including extensive one-on-one coaching, teaching sales people about lead qualification criteria, often dissecting specific sales calls, contacts, opportunities, and accounts. Good sales people soon learn that qualifying prospects takes significant skill and judgment.  Invariably, the best sales people are superb at this skill.

In contrast, the best marketers look at a sophisticated combination of techniques for delivering more qualified prospects to sales:

  • Targeting. By soliciting the right audience, fewer out-of-market prospects inquire.
  • Messaging and calls-to-action. The right message and supporting content will attract the most qualified buyers.
  • Explicit user-supplied information. Registration forms enable marketers to ask qualifying questions, questions that can evolve as the prospect moves deeper into the buying cycle.  Unfortunately, prospects are unwilling to fill-out a lot of information on a registration form so this tactic must be used with great restraint. MECLABS has one case study, for example, that shows a 189 percent increase in registration largely by decreasing the amount of information on a registration form.
  • Implicit data. Increasingly, marketers are drawing inferences about not just an area of interest, but the likely depth of interest, the role of the responder in the buying process, and similar qualifying information, all based not on what a prospect says but on what he or she does, primarily via his or her clickstream behavior but also via other media and transactional information.
  • Data Hygiene, enhancement, and consolidation. The cloud is creating very scalable and cost-effective tools for cleaning up inquiries, appending additional or better business card or firmagraphic information to each record, and consolidating duplicate accounts, contacts or areas of interest. The right processes will typically identify 14 to 21 percent of the lead pool as either duplicate or not usable (e.g., the visitor enters “Mickey Mouse” for a name).
  • Lead Scoring. Lead scoring uses any and all of the implicit, user-supplied information along with explicit and appended information to identify and prioritize records worthy of human follow up.

Leaving aside tele-qualification as a marketing function, the key difference between the approach of sales and marketing is this: marketing uses largely quantifiable techniques, primarily driven by highly scalable business rules and automation while sales uses qualitative techniques that are extremely nuanced and very subjective and invariably much more exacting for a given account.

In other words:

  • Marketing improves the probability of success across a pool of responders.
  • Sales identifies the probability of success for a particular responder.

Customers and prospects hedge, withhold information intentionally, change their minds, and/or misunderstand and even fabricate information.  Sales people use, not just the words of a customer, but a range of information, including someone’s tone, body language (in the case of on-site sales calls), the perspective of others within the account, external sources, and many other tools to evaluate the probability of purchase. While lead scoring is improving every day, it obviously has a long way to go before replicating the qualification techniques of sales people.

The truth is these two approaches are highly complementary

The more sales understands the tools and limitations marketing uses, the more insightful their suggestions can be; likewise, the more marketing understands the criteria and methods the best sales people use, the more marketers can improve their own upstream practices.

Related resources

MarketingSherpa B2B Summit 2011 – in San Francisco and Boston

B2B Marketing: Building a quality list

B2B Marketing: The 7 most important stages in the teleprospecting funnel

Members library – B2B How-To: 5 lead nurturing tactics to get from lead gen to sales-qualified

Free MarketingSherpa B2B Newsletter

Review: B2B Marketing Best Practices – MarketingSherpa 2011 Handbook by Lee Odden at TopRank online marketing blog