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Revenue Marketing: The Future of B2B

17 Oct

Marketing means different things to different people. For me, marketing is about solving business problems. Sometimes that means building awareness, sometimes it means better understanding customer requirements, sometimes it means investing to generate revenue, and sometimes it means galvanizing employees around a common purpose.

But over the last decade, B2B marketers have made an unprecedented shift of resources to focus on revenue generation. Today, B2B marketing program managers, lead generation experts, event teams, search marketers, content creators, and database marketers all align to drive revenue with the highest possible ROI. This is the core of “Revenue Marketing.”

What is Revenue Marketing?

Revenue Marketing is the development of repeatable prospecting programs that new drive customer acquisition and measurable sales.  The key to revenue marketing is a predictable return on investment: if you know the impact of marketing investment then it’s possible to link marketing plans to specific revenue objectives.

The rise of Revenue Marketing as a discipline is the direct result of new CRM tools and models. In sales-driven B2B companies, marketers have earned a seat at the table by tracking the bottom-line impact of every dollar invested.  CRM systems now make it easy to track how campaign investments generate leads, how leads become opportunities, and how opportunities become revenue-paying customers. The result is a new focus on ROI: optimizing the marketing mix to drive as much revenue as possible from a given marketing investment.

In the most sophisticated companies, revenue marketing now drives the entire sales pipeline. Sales people don’t make cold calls. Instead, inbound leads are automatically nurtured until they are right for sales. In these companies, marketing programs people are paid like sales: they have pipeline and revenue goals and substantial at-risk compensation built around these goals. The quarterly planning process begins with the revenue goal and backs into required marketing program investments and sales staffing.

The Revenue-Focused CMO

Over the last few months, I’ve had the opportunity to talk to dozens of B2B marketing and sales executives about their approach to revenue generation. I was surprised to see how similar revenue marketing practices are across a diverse set of companies. The tools, roles, tactics, language, and best practices are becoming firmly entrenched. Today in B2B, revenue marketing is a clearly-defined discipline. And like any high-value, growth discipline, expert practitioners are both hard to find and well-paid.

This new focus on revenue is one of the reasons that CMO influence is on the rise. Continue reading →

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Facebook Email Targeting & CRM Retargeting: Important New Tools for Marketers

1 Oct

Email marketing is a delicate art. In today’s world, fewer than 1/5 of recipients will open a commercial email message. For every 10 people who click on an email link, one person permanently opts out. While new subscribers are likely to open and click, results fall-off by 65% or more within just 4 months of email list subscription.

For most marketing organizations, email lists are full of high-potential contacts who no longer wish to receive email. In B2B, this is particularly an issue in businesses with  long sales cycles and high levels of lifetime customer value. While a prospect may be interested in a product or solution, they may not want to receive any commercial email.

A few weeks ago, Facebook rolled out a new advertising feature that allows marketers to display ads to targeted recipients selected via email address, phone number, or Facebook user ID. The new feature allows a self-service advertiser to upload an encrypted list of 20 or more contacts with the ad they want to show. Facebook will automatically target the supplied ad to the specified contacts.

This type of marketing, often referred to as CRM retargeting, allows advertisers to invest in building awareness or driving conversion within a known group of contacts. A large IT provider, for example, could drive an online campaign targeting known CIO’s who arbitrate buying decisions for their firms. A telecom company could market new devices to customers on expired contracts. Concert promoters can promote shows to people who have purchased tickets in the past. And all of this can be done using a prospect’s email address or phone number but without sending an email.

For B2B marketers focused on nurture marketing or content marketing, CRM retargeting enables marketers to reach prospects with relevant messages and content through an additional channel. It makes is possible to invest in advertising specifically targeting people who would prefer to not receive email. For companies with very large accounts, it would be possible to build account-targeted campaigns that deliver a unique message to representatives of a specific company. For companies looking to build a Facebook follower base, the new model allows them to promote their brands directly to a list of customers or fans who are most likely to engage online.

While others have attempted to use email as a filtering method for display advertising, two things makes Facebook’s new service unique: a billion member reach and a collection of multiple address for many of their members. For people with multiple addresses — work, home, school — Facebook is likely to have a match for whatever address might be in your CRM system.

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Predictive Analytics Will Transform B2B Sales & Marketing Execution

11 Sep

Consumer marketers have become adept at driving revenue based on predictive analytics. Potential customers are routinely scored on a wide variety of attributes from lifestyle to promotion receptiveness.  These scores allow consumers to be  segmented into groups based on shared interests, purchase likelihood, and total buying power. By starting with highly differentiated segments, marketers can design programs that are highly relevant and effective.

This is not the way that B2B sales and marketing works in most organizations today.

Yet, B2B is a ripe environment for predictive analytics: selling costs are high, sales probability is low, and resources are very expensive. While the language of B2B marketing and sales is full of references to probability — customer funnels, response rates, conversion rates, close rates, call-to-close ratios — it’s rare to see B2B organizations leverage prospect and customer data to score customer attributes, build discrete segments, and allocate resources to maximize the conversion and revenue.

But all of this is about to change. Over the next five years, common consumer marketing techniques will find a happy home in many B2B marketing and sales organizations.

Here are 6 reasons why:

  • Electronic sales processes are creating massive amounts of useful data: Today, B2B buyers spend more time interacting with companies online than they do with sales people in person or over the phone. For every successful sales call they attend, a typical prospect may spend hours interacting with content, reading forums and blogs, and testing sample products. In today’s world, every buyer action leaves a trail of digital clues that signal their context, needs, purpose, and intent.
  • Prospect attributes can be easily deduced from observable data: Most B2B organizations with CRM and content marketing capabilities have enough data to score prospects on purchase probability, likely problems or interests, and potential solution needs.
  • Relevancy matters: Even as the typical portfolio of products and solutions becomes more varied and complex, B2B sales and marketing messages tend to be narrow and simplistic. The patterns that work most consistently are destined to be forever repeated. For prospects, this means that they are often hit with messages and a pitch that ignore the nuance of their particular needs and segmentation. For many prospects, this is a turn-off that is difficult to reverse.
  • Sales & marketing funnels are based on probability: Typically, 2% of targets respond to a marketing campaign, 60% of leads are accepted by sales, 50% of accepted leads become opportunities, and 25% of opportunities close. When you look at the full marketing and sales funnel, a pathetic 1:667 targets becomes a closed deal. Using predictive analytics to improve any stage of the funnel has the potential to create incredible value. Continue reading →

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HBR: Big Data for B2B May be Overhyped

23 Aug

A recent Harvard Business Review blog post provides a thoughtful analysis of one of the looming issues facing B2B marketers: how to think about Big Data. As the hype builds, marketers are looking closely at their CRM data (and data in other systems) to see how to best leverage it to drive revenue.

The post asserts that broad data analysis is overrated and that marketers should focus on the narrow set of insights that really matter in a B2B sales environment. Here is the guidance on B2B Insights:

“It’s impossible to know all the insight types that you can hope for, but it is imperative that you have several to bank on that can help sales force members answer key questions. For example, salespeople can gain insight into which customer to target, which offers maximize value for each customer, or how to spend time to drive success. Sales managers can gain insight into what guidance to give salespeople, how to set goals that are fair and realistic, and how to keep a team on course to achieve district goals. Sales leaders can gain insight into how many salespeople are needed, how to attract and retain top talent, and whether an incentive plan is motivating the right kinds of sales activity.”

B2B sales is always more complicated because the sales person has a relationship and often knows more about the prospect than the data can tell. The key to providing value to sales people is to help prioritize activity: helping them figure out who to call, what to focus on, and what activity to take next to maximize their chance of success.

The full post can be read here.

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The Nurture Fallacy: 5 E-Nurture Marketing Myths

16 Aug

Marketing automation companies have built a big business by creating tools for electronic “nurture” programs. Now, B2B marketers around the world are executing “e-nurture” programs designed to take prospects on a multi-step journey designed to increase prospect education and awareness, and ultimately, to lead prospects to buy.

It’s not uncommon to see B2B marketers execute complex drip and trigger campaigns with seemingly endless tracks and branches. In some organizations, nurture complexity has outstripped the ability of charting tools to diagram the planned  communication paths.

While marketers must focus on the customer journey, the current e-nurture fad fails to deliver on the value that it promises. Here are the five commonly held beliefs that I believe to be myths:

Myth # 1: “You can take prospects on an email journey”

While email remains an invaluable tool for marketing and demand generation, it is a horrible tool for guiding prospects on a linear educational journey. Here’s why: only 10.8% of email is ever opened, and only 30% of mail that is opened is actually read (the rest is skimmed).

Most nurture campaigns are built on the assumption that a prospect will internalize a core message or idea and will progress on the electronic customer journey from message to message. The fact is that very little commercial email is read, very few ideas are internalized, and very few people are persuaded by content delivered through email. While some portion of people who open may click through and interact with online content, that proportion is almost always a small single digit percentage of the overall campaign audience. By the time the next message arrives, the educational benefits of the previous message are almost always forgotten.

Myth # 2: “Content should be sequenced along an educational path”

To maximize sales conversion, email campaigns should promote the best content (based on conversion rate) vs. optimizing content to follow a progressive educational path. Nurture campaigns should be focused on sequencing content based on effectiveness by first merchandising the content with the highest impact that hasn’t yet been accessed by a particular prospect. It’s common sense: sequencing content based on performance vs educational narrative will always drive better results.

Myth # 3: “The more tracks and steps, the better”

As marketers build teams and programs around nurture strategies, they often drift towards micro-segmentation of the prospect database based on interest and sales stage. The result is an endless tree of options and content as prospect interest evolves and sales stages change.

For marketing and sales, the typical result is painful complexity and a proliferation of content required to address every interest/stage permutation. In most companies, a few pieces of content do the real heavy lifting and have the biggest impact on persuasion and conversion. A proliferation of nurture segments dilutes the impact of the best content and creates heavy demands for new content that inevitably underperforms and quickly becomes out-of-date.

Myth # 4: “Prospect activity tracking is the secret to an effective nurture program “

Since only 10.8% of email is opened, a basic nurture practice is to resend messages to people who ignore the first message to try to get their attention a second, third, or fourth time. Continue reading →

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The CRM Crisis: Why Sales Force Automation Failed

4 Jun

Just two decades ago, B2B sales people spent most of their time filling out computer forms to manually track hundreds of pieces of data on customers and accounts, mostly for the benefit of managers who watched their every move. Two decades later, virtually nothing has changed.

Over the last twenty years, consumer web and desktop software has evolved: the consumer world has become social, mobile, and location aware. Interfaces have become simple, intuitive, and pleasurable. Data collection has become automated and increasingly intelligent.

During the same period, enterprise software has made surprisingly little progress. In the case of sales force automation (SFA) and customer relationship management (CRM) software, the lack of innovation in the user experience is particularly remarkable. While new software-as-a-service models have streamlined deployment, customization, and IT management of CRM tools, the tools themselves haven’t evolved at nearly the pace of other technologies.

CRM has a problem: it’s not working as advertised. A 2011 Accenture study of sales effectiveness and CRM usage found that only 16.9% of companies using CRM believed that their CRM tools improved win rates. Only 11.8% believe that their CRM tools shortened sales cycles. And only 15.4% and 3.7% believe the tools increase revenue and margin respectively. Where did CRM tools help? The survey showed that slightly more than half of companies believe that CRM helps to improve communication between sales people and their managers. Why? Likely because forcing sales people to document every activity improves managements ability to monitor activities and to discuss them with their teams.

Today, almost every business-to-business organization struggles with basic sales force management problems that have plagued the industry for decades:

  • Sales activity tracking remains a largely manual effort: CRM systems are filled with information on customers, prospects, accounts, and activities. It’s not uncommon for companies to require more than a hundred fields of data on a typical opportunity and the corresponding accounts and contacts. What do all of these data points have in common: they are typically manually entered into a web browser or software application by the sales people themselves.

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