Buyers in businesses have embraced the web and social media tools to find and research solutions, just like individual consumers. Of course, a "considered" purchase of an enterprise software system costing $50,000 or more is much more complex than buying a $200 digital camera.
51 percent of marketing organizations are using lead management systems and 60 percent are using some form of lead scoring before passing leads to sales.
Still, the process often starts with research on the web and ends with a purchase. Business-to-business (B2B) marketers are optimizing what happens in the middle with strategies and tools to engage with buyers more effectively, and increase the flow of qualified leads to sales reps.
B2B marketing tools, first introduced a decade ago, have moved into the mainstream. CSO Insights' 2008 Lead Life Cycle Optimization [1] study found that technology is playing a larger role: 51 percent of marketing organizations are using lead management systems and 60 percent are using some form of lead scoring before passing leads to sales. The global economic crisis may boost demand further, because it has "turned the spotlight on improving efficiency," says Will Schnabel, Silverpop's VP of international markets and former CEO of Vtrenz, a lead management pioneer acquired in 2007 by Silverpop.
Buyer-Centricity
Alight [2], a software maker of planning tools for finance and product managers, exemplifies a new breed B2B marketer that matches marketing and buying processes. Typically buyers find Alight through a Google search with keywords like "budgeting software" and then click on a paid ad promising to help the buyer "learn the 5 capabilities budgeting software should deliver." A landing page invites the prospect to fill out a short form to view an online demo.
Whether the offer is a white paper, webinar, demo or free trial, there's nothing remarkable about this. Anyone can easily place ads on Google or other search engines, create a registration form, and collect "leads."
The key is how these leads—more accurately called contacts or inquiries—are handled. Done right, it's magical. Alight uses Marketo's lead management solution to collect the leads, generate stats on what users do after they click, and hand over qualified leads to sales via a Salesforce.com connection. Prospects who don't reply immediately to a phone call are put on an automated "nurturing" program to received targeted messages with other offers designed to revive interest at a future date.
Quite possibly the company couldn't exist without this "B2B marketing 2.0" approach. According to Alight's VP of Sales Ben Lamorte, VCs didn't think the company could sell software solutions to mid-market enterprises at a price point from $10,000 to $50,000 without expensive feet on the street—which can increase the cost of sales to the point that the business model isn't viable. Alight is beating conventional wisdom by combining effective search campaigns with affordable tools like Marketo for lead management, Salesforce.com for sales automation, Citrix GoToMeeting for online meetings, and Camtasia to turn recorded demos into short video clips.
Understanding the Buying Process
Consumers research online, so do business buyers. A 2007 study by Enquiro Search Solutions [3] found that 65.3 percent of B2B prospects in the Awareness phase started their search with general search engines. As they move through the Research and Negotiation phases, prospects increase their usage of B2B vertical search engines and vendor web sites.
B2B Search Activity by Buying Phase: (Source: Enquiro)
It's critical, therefore, for B2B marketers to have an effective search strategy, both organic and paid, to engage with the prospect during online research. The prospect must be served up content and offers that are appropriate for the stage of the buying process.
- Awareness: Starting out, prospects will use general search terms and be attracted to educational white papers and webinars.
- Research: Digging deeper, prospects will search on specific solution and brand names, and are more likely to respond to demos and free trials.
- Negotiation: During the final decision-making phase, buyers will search with comparison and review terms, and consume content that pits one vendor against another.
Who makes the purchase happen? In most B2B transactions, sales reps do. And what do sales reps need? Qualified leads, that's what.
Giving the right offer at the right time is not as simple as it sounds. It doesn't make sense, for example, to offer a high-level white paper that buyers will read in the awareness phase, and then treat these as qualified leads. Sales will be frustrated and the money generating these prospects will be wasted. But if marketers only target those ready to buy immediately, by the time the buyer is ready to make a decision, the vendor/solution may not be in prospect's "consideration set"—a mental short list of options that the buyer is seriously considering.
Serena Software [4], a maker of software development tools, discovered it was introducing a free trial too early in the marketing process. Michaline Todd, Director of Corporate Marketing, said this resulted in too many unqualified prospects because they weren't sufficiently educated on Serena's solutions and pricing. Now trial offers are introduced more strategically and Serena uses a solution from MarketBright to manage web content in a more "flexible and agile" way.
Working Backwards From Revenue Goal
The key to success in B2B marketing is working backwards from the main business goal: revenue. Marketing, after all, doesn't directly produce revenue, only a purchase does.
Who makes the purchase happen? In most B2B transactions, sales reps do. And what do sales reps need? Qualified leads, that's what. In fact, a major conclusion of CustomerThink's 2008 sales productivity study was that sales executives should "focus on getting more of the right prospects into the funnel to begin with, then ensure that you invest sales time on those properly qualified."
So what really matters is the flow of qualified leads. But what, exactly, is a "qualified," or as some call it, a "sales-ready" lead? Forrester analyst Laura Ramos, who has been researching B2B marketing best practices for the past three years, say a lead is qualified "where there has been a series of interactions that demonstrate to sales that prospect has moved from early awareness to consideration."
In other words, a lead is much more than a prospect filling out a web form. This indicates interest, but that's it. Savvy sales reps won't waste their time culling through lists of these so-called "leads" to find a few good prospects. Instead, they cherry pick a few contacts from companies that look promising, ignore the rest, and thus waste most of the marketing investment.
Breaking Marketing and Sales Gridlock
It's not easy to get two organizations with different ideologies to agree on anything. Witness the limited success U.S. President Obama has had getting agreement between the Democrats and Republicans. They just see the world differently.
So, too, is the case between marketing and sales. Marketers are often rewarded for lead volume, so they generate leads that aren't a good use of sales time. Quota-focused reps, on the other hand, don't want to spend time on opportunities unless they are ready to buy now. Result: potentially good prospects are either never called, or called once and forgotten. Marketing and sales, like political opponents, then play the blame game when revenue falls short of plan.
While sales reps may never fully appreciate the value of brand marketing, and marketing professionals may not understand the art involved in selling, they can create common ground around lead qualification. Barry Trailer, managing partner with CSO Insights [5], agrees that "technology gives leverage if you use appropriately," but adds that scoring leads is a critical activity, because you need a systematic way to decide whether a lead is sales worthy. Even new companies with no history can convene experienced sales reps in a session to build a "perfect prospect profile"—prospects that would close 80 percent of the time. This profile would include demographics and psychographics.
While sales reps may never fully appreciate the value of brand marketing, and marketing professionals may not understand the art involved in selling, they can create common ground around lead qualification.
Marketing can add value by providing intelligence on the behavior of prospects online. Eloqua co-founder and CTO Steven Woods calls this "digital body language." Much like a rep would look for signs of prospect interest in a face-to-face meeting, interest can be assessed with online prospects by analyzing what content is accessed; the frequency and depth of interaction; and even when others from the same organization take a peek. Ideally, marketing and sales executives should agree on a scoring method to include all the relevant factors and decide what score meets the sales-ready threshold.
Finally, marketers can provide tools to directly help reps interact with their prospects. Erik Bower, co-founder of Marketbright, believes that "social selling" is the next wave of innovation. The company's just released Prospect Portal makes it easy to "give prospects their own water cooler" with a micro-portal that a sales rep can deploy for individual prospects. Reps can publish content, events and messages, plus enable the prospect to share information with colleagues involved in the buying decision. The prospect should get a better buying experience while the rep improves selling effectiveness.
Return on Innovation
In this economy, what's the case to spend money on B2B marketing automation solution? To be sure, there's plenty to gain by incrementally improving existing processes. But keep an open mind, because the Web 2.0 era also makes innovative new approaches viable.
- Optimize search investments. This is the low-hanging fruit right now, says Marketo's CEO Phil Fernandez. Clicks on B2B ads can cost $7 to $10 each, and some B2B marketers spend tens of thousands per month on Google. Using analytics to increase conversion rates will put more leads into the funnel at the same spending level, or allow a marketer to maintain lead volume when budgets get whacked.
- Warm up cold leads. Most marketers have stockpiles of dormant contacts that never went anywhere. Experts estimate that around 10 percent of these so-called "cold" leads will eventually become warm again, if properly nurtured. One company told me that of 30,000 contacts acquired, about 1500 re-engage each month, thanks to nurturing. That's a lot of extra value extracted out of a sunk marketing cost.
- Improve marketing and sales process. At Enquiro [6], the same outfit that did the B2B research mentioned earlier, they used to generate leads via a white paper offer, then give ("dump" might be a better term) them all to reps. Now they score leads with Marketo and only send promising leads to reps. "Sales reps love the process," says marketing director Spoeth, and marketing efficiency has been improved, too.
- Support new business models. Clever use of search and B2B marketing/sales technologies can enable a company to tackle markets that are not viable with traditional approaches. Acteva [7], an event registration service, can quickly set up and manage campaigns targeted to different vertical markets. Each campaign includes tailored landing page, email, lead routing and reporting. Doing this with the old process, which involved conventional web page design and IT coding, was too time consuming to even consider, according to marketing director Elias Terman.
Tips for Success
Industry experts agree that the best B2B marketers understand precisely how their prospect buy, work to integrate marketing with sales, and deploy the right technology for the right jobs. To improve your odds of success, follow these words of advice.
First, as Andrew Spoeth, Enquiro's Director of Marketing advises, invest quality time to understand exactly how the customer really buys, both online and offline. Online research, focus groups and usability testing can all play a role. You may be surprised to learn, Spoeth says, that "the buying process doesn't follow a neat progression" as you might expect from looking the typical buying funnel. People jump around, so be prepared to engage when the buyer is ready.
Marketing and sales leaders must then clearly define a "qualified lead" and agree to work together toward a common goal. Their boss can encourage this by giving them shared revenue objectives, and fixing measurement systems that motivate lead volume over quality. Developing a mutually agreed leading scoring and reporting process is crucial.
To engage with prospective buyers, the right offer delivered at the right time is paramount. Billy Martin, VP of Marketing at Weather Trends International [8], said the company uses Eloqua's system to help deliver messages that are "high value and relevant" at a frequency that will increase engagement, not stimulate opt-out behavior.
Finally, deploy the right solutions. Eloqua [9] and Vtrenz [10] pioneered B2B marketing solutions a decade ago, and now offer powerful suites of functionality. As the industry has expanded and matured, upstarts like Marketo [11] and Marketbright [12] have entered with fresh designs and innovative features. And, there are many more solutions in the market from specialty vendors, while mainstream CRM vendors are adding basic capabilities that are bound to grow over time.
In the end, the point of B2B marketing is not about contact generation, it's about creating qualified opportunities for reps and increasing revenue. Marketing needs creative professionals, and sales needs artful reps to close deals. But both can benefit by taking a more systematic approach to B2B lead management, to better connect with buyers and increase the overall effectiveness of the marketing/sales process.