On September 19, I am releasing my new book, Balancing the Demand Equation: The Elements of a Successful, Modern B2B Demand Generation Model. (As a note, it will be available in hardcover via Amazon, and also will be on iBook, Kindle and Nook. Details to come.)
At the heart of the book is a sophisticated framework that is designed to help B2B marketers understand and succeed in the modern demand generation environment … and to help them move away from the persistent, legacy, top-of-funnel, mass-marketing approaches that are ill-suited to today’s B2B marketing challenges.
What are these challenges?
B2B marketers find themselves more challenged than ever in connecting with the modern buyer – i.e., Buyer 2.0 – at the right place and the right time in the buying cycle. B2B marketers also find it challenging to scale marketing operations that drive perpetual, one-to-one engagement, acquisition and nurturing of prospective buyers. Complicating things, technology is both problem and solution in this equation – i.e., technology is in part to blame for our challenges, as Web 2.0 has resulted in a more-empowered buyer, but it’s also a key piece of the new equation via marketing automation and customer relationship management technology.
Thus the B2B demand generation ‘formula’ has never been more out of alignment.
Sounds like a problem that needs solving, right?
Yet you might react to what I’ve written so far by saying, “Isn’t this really just an operational challenge for B2B marketers? Why should the rest of the company care?”
Adopting sophisticated, new approaches to B2B demand generation – particularly moving to marketing automation, and using it to deliver buyer-centric, multi-touch nurturing programs – is not merely about improving operational efficiencies and/or getting B2B marketing to ‘step up.’
It’s about top-line revenue … i.e., the revenue that organizations with un-sophisticated B2B demand generation are walking away from every day.
The Numbers Don’t Lie
I was reminded of this fact this past week as I read a DemandGen Report article, which cited recent IDC research on this very issue. “BtoB companies’ inability to align sales and marketing teams around the right processes and technologies has cost them upwards of 10% or more of revenue per year, or $100 million for a billion-dollar company, according to IDC.”
This issue also was a central theme at the SiriusDecisions Summit 2011 in Scottsdale this past May – which I covered in my blog post from the event. Richard Eldh addressed the issue in his opening address at the conference.
“Why is it we as organizations want to even focus on sales and marketing alignment?” asked Eldh. He explained, “[O]rganizations … [that are] tightly coupled outperformed in both revenue growth and in profitability.” A key element of this alignment – and of sophisticated B2B demand generation – is ‘closing the loop’ between marketing activity data and sales outcome data, and the SiriusDecisions team has found that there is a wide gap between ‘best-in-class’ and ‘worst-in-class’ closed-loop practices.
Eldh cited research by his team that shows that throughout 2009 and 2010, organizations with ‘Poor Measurement’ – i.e., those with ‘worst-in-class’ practices for connecting the dots between marketing and sales efforts – grew revenues an average of 1.4% over a two-year period (including an economic environment in 2009 that was particularly challenging). Comparatively, organizations with true ‘Closed Loop’ – i.e., those with ‘best-in-class practices – grew revenues an average of 7.5% over the same period.
Clearly Closed Loop organizations perform better from a revenue-growth perspective than Poor Measurement organizations, but as Eldh highlighted, the story is even more dramatic from a profit perspective.
Eldh’s team found that Poor Measurement organizations saw an average of -23.4% profit growth throughout 2009 and 2010, whereas Closed Loop organizations saw an average of 146.3% profit growth over the same two-year period – quite a difference and one that supports his point. In fact, almost as an understatement, Eldh commented, “We see significant impact … post putting in some measurement systems.” Clearly.
Operating a best-in-class B2B demand generation program enables a more granular level of visibility into the connection between marketing programs and revenue outcomes – visibility that helps identify and convert a greater number and percentage of opportunities. This visibility is key to tuning, and ultimately perfecting, an organization’s B2B demand generation formula.
This is supported by recent data from Lenskold Group in the “2011 Lenskold Group / The Pedowitz Group Lead Generation Marketing ROI Study.” The study noted:
Companies using full-featured marketing automation integrated with CRM or sales automation indicate much higher rates of reporting and forecasting metrics. Compared to marketers with no marketing automation, integrated marketing automation users were more likely to report performance metrics (average 58% vs. 36% per metric), report final metrics (average 46% vs. 22% per metric) and forecast metrics (average 56% vs. 35% per metric).
What Can You Do?
In the book I introduce a framework for taking B2B demand generation practice from a legacy era to the modern era. The core of this framework is finding the right balance between 1.) focusing on the buyer – i.e., becoming more one-to-one and bottoms-up in our buyer engagement – and 2.) adopting an operations mindset – i.e., shifting to a scalable, process-oriented mindset to deliver the volume of one-to-one buyer interactions and qualified leads required to succeed. As the book explains, ‘balancing’ these two elements is ultimately the key to succeeding with modern B2B demand generation.
Let me boil this down, though, in light of some of the data I presented above, to two core elements that must underpin your B2B demand generation – and that help represent the difference between organizations that are ‘best-‘ and ‘worst-in-class.’
Moving from ‘legacy’ to ‘modern’ in your B2B demand generation requires that your approach and programs be:
> Buyer-centric: Your B2B demand generation program must be designed not only to score and qualify leads and/or to elicit minimal levels of awareness/response. Sophisticated, modern B2B demand generation must be designed from the ground up to engage and accelerate B2B buyers in their buying processes. This means developing content that is more about the buyer’s issues and needs than your product/service. This also means adding value throughout the buying process with tools and resources that help the B2B buyer make a better decision. And this finally means a multi-touch strategy that is iterative and that moves at the buyer’s pace.
> Closed loop: Your B2B demand generation program also must connect the dots between every content offer and the resultant revenue outcome – ideally through marketing automation sync-ed to CRM. So not only must B2B demand generation educate buyers, but it also must make sure that we’re educating them with the right content, in the right sequence that is most likely to result in their buying from us. Then our scoring and qualification makes sense, because we understand the ‘critical path’ of our targeted B2B buyer and can design programs that deliver the highest volume of leads that meet our ideal score profile.
There’s obviously a lot more that goes into successful, modern B2B demand generation; however, buyer-centricity and operating in a closed-loop fashion are a good start. And frankly, it’s a big leap from where many of our B2B marketing programs are today.
But it’s a leap that is about more than just improving marketers’ operational efficiency; it’s about improving the ability of our organizations to identify and convert revenue opportunities. Sophisticated, modern B2B demand generation efforts result in perpetual, buyer-centric, closed-loop programs that contribute to predictable and sustainable revenues for their organizations. This is why B2B demand generation is no longer tactical; now it’s strategic.