Thursday, May 19, 2016

Blowing Up the Funnel

IDC predicts that by 2020, 1 in 5 marketers will abandon the traditional funnel for a buyer-centric approach. The funnel belongs to the 20th century.  Back then, buyers were ignorant about their choices and sellers knew little about the needs and preferences of their prospective customers.  Now, leading companies are embracing high-information strategies that are re-architecting the shape of engagement and in the process, blowing up the funnel. [Read my interview with Direct Marketing News]  
 

Everyone hates the funnel

 The traditional sales funnel was invented for a low information world. Invented in 1899, it served all through the 20th century when buyers and sellers knew little about each other.  This low-information situation shaped commercial engagement into the funnel's distinctive silhouette – wastefully, painfully, wide at the top; desperately, frustratingly, narrow at the bottom; and with that nasty chokepoint between marketing and sales in the middle.
 
  • Wastefully wide at the top. Frustratingly narrow at the bottom: Because companies knew little about buyers, they had to "fish with nets" as Jon Miller, CEO of Account-based Marketing company Engagio, calls it. Cast wide to capture a range of suspects and then progressively filter to find those that really want to buy. Most of this effort was wasted, especially at the top of the funnel, as the number of prospects who made it through was astonishingly low.
  • The mid-funnel chokepoint: In the low-information era, filling the wide top of the funnel with prospects required a more cost effective (when compared to sales) one-to-many approach. Advertising and direct marketing attracts the masses. Once some knowledge was collected about prospects, they could be handed to the more expensive sales team to complete the job.  The two teams constantly bickered over this serial handoff. Marketing invariably lost that battle.
  • Customer pain: While the funnel is wasteful for marketing and frustrating for sales, customers also suffer in the low-information funnel.  Extensive outreach from ignorant companies is an intrusive time sink. Irrelevant marketing content and unprepared sales people requires buyers to do most of the heavy lifting during the buying process. Lack of information about customers perpetuates the insular inside-out attitude that permeates many B2B companies.

Blowing up the funnel

Today, disrupters compete on experience quality as much as they compete with products. Buyers are now in charge – not vendors. With the Internet as a high-information resource, buyers now need the vendor much less than before. 
 
Companies must earn back the right to sell.  They must reduce the customer pain that is indigenous to the funnel. They must offer buying experiences that customers view as advantageous. Leaders are seizing the opportunity with new go-to-market strategies. Not everything about these strategies is new.  In fact, each borrows from earlier methods. But these 21st century versions all have one thing in common – they depend on data for their success.  With a high amount of information about customers, these strategies blow up the funnel by destroying its familiar silhouette and properties.
 
Here are a few of these increasingly popular go-to-market strategies that do not build a funnel:
 
  • Account-based Marketing (ABM): ABM "flips the funnel" by offering a narrow-at-the-top and wide-at-the-bottom alternative. For large B2B accounts, vendors can get to know a few high potential buyers better and create bespoke programs that serve them and build business over the long-term.  Account focus is not new – but the ability to do this at scale is. Data and marketing technology is required.
  • Analytics-based discovery and nurturing: Leading marketers are getting more sophisticated at using big data and analytics to locate high propensity buyers thus reducing the need to cast wide. Analytics and behavioral monitoring expands the pipeline by improving conversion.  Painful intrusive filtering is replaced by relevant and useful nudging.
  • Virtual sales or a buying service concierge: This emerging hybrid of digital and interpersonal selling is a far cry from the historical "me and my quota" sales rep. Imagine a typical virtual sales rep sitting at what looks like the console of an air traffic controller. But instead of directing jets through the airspace, they using social media, advanced analytics, cognitive systems, and other information tools to guide buyers through their decision journey. The scalable, high-touch model completely removes the old chokepoint and broadens the lower funnel with better conversion.
  • "Loyalty" first marketing: A loyalty-first approach rejects the funnel with its casting and filtering altogether. Vendors use data to really understand their markets. They first build up a pool of fans with services, entertainment, and social benefits.  The resulting brand loyalty gives them an opportunity to later monetize with products and services.

Maybe I'm being optimistic, but I believe that these high-information strategies will not only be more effective in today's world, they also have the potential to make it a kinder, gentler, place.  Each requires that companies reach beyond a half-hearted marketing and sales "alignment" to a true information alliance.  The mid-funnel chokepoint dies.  In addition, knowing customers more deeply opens the possibility that companies will feel empathy for them. 
 
The funnel may have been a necessary thing – but it's not a good thing.  Time to get some data and blow it up.

(This post was first published on LinkedIn on April 28, 2016)

Monday, May 2, 2016

The Five Key Competencies for a Modern Tech Marketing Organization (via IDG Enterprise Marketing)

Our current market landscape is being led by self-educated buyers, and these buyers are moving fast and marketers need to move faster. Rich Vancil, Group VP of IDC, kicked off his IDC Directions session on “Best Practices in Building the New Marketing Machine” with this sentiment. So how do marketers not just move faster, but smarter? Vancil shared five key competencies to consider for modern marketing organizations based on recent research.
1.   Content Marketing
Given the session kick-off and the value of reaching the self-educated buyer, it is no surprise that content marketing is a top factor. However, companies are not being as strategic as they could be. In many organizations, there are multiple groups engaging the customer—product marketing, corporate marketing, field marketing, PR (earned media), and social—and unfortunately, tone and style often do not align. To reduce this “messiness” and provide a more omni-channel approach, a head of content or editor in chief should be considered. This position allows content paths/links to be created and a consistent message shared with your customers.Once this great content is created, work with your employees to be advocates and share the content socially to expand the reach.

2.   Sales & Channel Enablement
This is an evergreen issue. Sales is often sent materials directly from multiple groups, like product marketing, which can be overwhelming to the team. This is where sales enablement through corporate marketing can be extremely beneficial. The sales enablement team can be the intermediary to ensure materials are, in fact, sales ready and provide ongoing content audits to streamline the path of sales-ready tools. Allowing the sales team to spend more time with final tools and most important, your customers.

3.   Customer Intelligence & Analytics
Data is a must-have for understanding the buyer’s journey, unfortunately; that data is normally poor, or not parsed out effectively. To use data effectively, it is encouraged to build a marketing operations ambassador program, which allows non-marketing employees access to marketing data to leverage for decisions. For example, finance could use some data to determine customer lifetime value or for budgeting, whereas sales may be able to tie customer engagements to sales to learn more about prospects.

4.   Integrated Digital & Social Engagement
Providing an omni-channel experience is an ideal scenario for most marketers; however, we are not there yet. Similar to the challenges of multiple groups producing content, traditional media teams and those responsible for social promotions face similar disconnects, and it’s noticeable. However, having individuals own specific tools and collaborate/streamline messaging is key for success in the quickly growing social world.

5.   Loyalty & Advocacy
Many organizations live and breathe through a subscription economy, particularly when it comes to software. The challenge can be keeping customers happy as new competing solutions are constantly being launched. Building this loyalty and advocacy lies across the product, corporate, and field marketing teams. Customer success teams that care about a customer’s experience and determine ways to reduce response time and ease of use can play a major role in success.

Throughout the session, there were many nodding heads on areas that need to be improved in order to move to a modern marketing organization. Where are your competency gaps and what ways can your team improve the customer experience? Share them with @idgenterprise and @idcdirections.
(First published by IDG Enterprise Marketing· Apr 26, 2016)
 


Monday, April 25, 2016

The Marketing Personalized Lead and the Sales Buyer's Journey

All B2B marketers know what an MQL is, but what's an MPL? It's the Marketing Personalized Lead and it reflects the needs of the individual sales resource to whom the lead will be distributed. This requires marketing to apply the same science to understanding the needs of the sales channel as it does to any external audience. Just as with external audiences there are many segments and needs within the sales force and they change over time. There are enterprise account reps, segment reps, product reps, regional/territory reps, vertical reps, strategic partner reps, channel reps, inside/telesales reps, and many more. Within each of these categories there is additional variation. Marketing typically does not micro-target leads to sales reps even though it requires less work than it takes to micro-segment an external audience. The same tools apply: social monitoring, community building, data collection, behavior tracking, even buyer's journey analysis.

Sales buyer's journey analysis could be the single most powerful way to align marketing and sales. Sales buyer's journey may sound like an oxymoron but the tactical application is a profound leap in the ability of marketing to deliver immediately useful output to sales. Marketing should think of sales as "buying" its leads. The buy is acceptance, follow up and entry into the pipeline. When sales ignores the leads they are not buying. The reasons they buy or not are very much the same as any other buyer. The lead (offer) does not fit their current agenda (sales attention.)  

IDC defines sales enablement as:
Getting the right information to the right sales person at the right time in the right format in order to move an opportunity forward.

The two important concepts here are "information" includes leads and "opportunity" = already open in the CRM. Also, most marketers don't know the right time to provide certain leads to certain reps. The sales buyer's journey requires an understanding of exactly what each individual sales person needs right now. Most marketers think every MQL is an opportunity in the making and that's a huge misunderstanding of how sales works. An opportunity is a case that the rep is already working on. In order to provide MPLs to sales, marketing needs to know a number of new things about every sales rep:

                Are they working on new or existing accounts?
                Which opportunities are they working on this quarter?
                Who are they meeting with/calling on in the next few weeks?
                Do they need leads connected to current contacts?
                Do they want accounts or contacts included or excluded in marketing campaigns?
                What outreach is sales doing on its own?
                Where are they in the sales process?
                What do they already know about the opportunity?

Going to Sales with the ability to personalize leads for each rep is a game changer. It delivers exactly what Sales is looking for in terms of leads from marketing. It requires that scoring, distribution, contribution, and metrics be tuned to specific Sales activity. Typical symptoms of misalignment such as too many leads, poor lead quality, high rejection rates, and bickering will disappear. But it is critical to adjust metrics that drive lead volume in marketing. Instead of number of leads, marketing should be measured on lead to opportunity ratio, new opportunity to account ratio, contribution to pipeline. To the extent marketing remains engaged through the sales cycle other metrics such as time to close and deal size should also be considered.

MPL fills in the blanks left by the MQL. It delivers leads on a silver platter by ensuring fit between what marketing is serving and what sales wants to eat. It should be a fundamental model for marketing and sales alignment, and will be essential to the success of any account based marketing program. 



Thursday, February 11, 2016

Who Really Counts? Mapping Internal Influence in the B2B Buying Game


Everyone knows that B2B customers buy as a team. Participants play different roles – technical, line-of-business, financial, etc. Marketers usually focus on individual personas. But buying is not conducted in isolation. It's social. By understanding not only the players but also the way the game is played, marketers will develop more compelling content and campaign conversion strategies.

Buying teams can be large. According to IDC's 2015 IT Buyer Experience Survey, the average buying team for companies with 1,000+ employees has 9.2 members. While each buying team member goes through their own decision-journey, they don't all march through in tandem. And like a sports team, different players contribute in different ways.

Using data from the IT Buyer Experience study, IDC mapped the relative influence of buying team members to understand the dynamics at the exploration, evaluation, and purchase stages of the buying decision-journey.  IDC looked at the influence of the LOB executive, LOB staff, CIO, IT staff, CFO, and purchasing.

Here's a chart showing the rise and fall of influence for just two of these team players - the CIO and the LOB staff-level roles. Survey participants were asked to rank the relative influence of various buying team roles. The higher the ranking, the more influence the survey participants gave to different roles.
 

Influence Scenarios

Based on these influence ratings and other data such as use of content types at different stages, here's what IDC finds is happening during the buying decision stages.
  • Exploration stage: Exploration can be time-consuming. It's no wonder that staff-level "explorers" (both LOB and IT staff) do most of the work and thus have the most influence in this very early stage. The (LOB) executive who owns the problem is also very influential. IDC Guidance: Make a compelling case for change that will convince the executive who owns the problem. Also, educate the staff-level explorers so they can serve as internal experts. Spur the internal conversation with "shareable" content that says, "Hey, check this out. We really should be talking about this issue."

  • Evaluation stage: Many more influential players, including the CIO and purchasing, are added to the team during the middle stage of the decision journey as the enterprise works through the complexities of consideration and selection. IDC Guidance: Since vendors are infrequently present at the table to explain their messaging during internal discussions, there is a premium on clear, complete, easily accessible, and shareable information.

  • Purchase stage: Financial and contractual considerations are most important at this final stage. Purchasing function and even the CEO rise in influence, while other players move into spectator mode.  IDC Guidance: Marketing needs to help sales close the deal. But also stay alert to social buzz. The closer the deal gets to the wire, the tension rises. On one hand, the buying conversation gets very narrow, personal, and specific to the deal, and on the other hand, it widens out to intensely search for any final verification of a good choice or any final hidden reasons to divert the process.
Continue to pay attention to the information needs of specific buyers. But to really serve the full customer experience, don't forget that buying is also a social activity.
See IDC.com for the full report (Subscription or fee required)
This post first appeared on January 11, 2016 on LinkedIn

Tuesday, January 12, 2016

Cognitive Marketing: The Future for Smart Marketers

"Modern marketing is all about making the most compelling offers
to the best customers the fastest." 

Cognitive computing has a big future in marketing. The ability to track virtually everything everyone does on line has elevated the analytical requirements for marketers to the scope of a global stock market. Billions of data points are flowing and changing minute by minute. It is not possible to manage in human time frames or processing capacity. Fortunately machine assistance is rapidly evolving from batch reporting to predictive analytics to automated analytics, natural language processing, natural language generation, machine learniing and cognitive computing. We're not quite ready to add sentient computing but it will probably happen in our professional lifetimes. While all this sounds like it might squeeze the human value add out of marketing quite the contrary. It creates a cognitive surplus for marketers to spend their time on higher value, "right side of the brain" decision making instead of crunching numbers and clicking software UIs all day. For the foreseeable future humans will be better at applying curiosity and creativity to problem solving. 

Virtual telesales is a representative example. As marketers become more sophisticated in understanding customer behavior, they are getting better at managing acquisition cost. High-potential leads get higher-cost resources like a dinner meeting. Low-potential leads go into automated email drip campaigns. But there is a huge midsection in the lead curve that requires a very low cost, highly effective means of further qualification. Traditionally, this is done through telesales services, which can be opaque, inconsistent, and expensive. Enter the virtual sales rep, a digital, rules-based learning algorithm that can replace telesales (via solutions like Conversica. ) 

For simple email interactions, totally virtual reps are not only indistinguishable from humans, they are often preferred. Why? Because they can be set up to be courteous and respectful and are inherently reliable and scalable. For example, the time it takes several people in marketing and sales to follow-up on a Web visit by a prospect is typically more than a day and can depend on complex scoring, routing, and territorial designations. Studies show that delays of more than a few hours dramatically degrade engagement rates. A totally virtual rep can follow-up on every single Web visit with a personalized message within whatever time period it is programmed to do so. And it can manage several qualified exchanges to the point of setting up a human-to-human sales interaction or providing links for digital commerce. This eliminates delays caused by human availability and preference. The quality, efficiency, and cost of the virtual sales rep are simply compelling.


But the virtual rep is only one beginning for cognitive. The level of complexity in ad optimization and the logical future of personalization (individualization) in multichannel marketing will require millions of decisions to be made in real time. Again, the future is already here. IBM officially added Watson to its marketing cloud solution offerings in 2015. Cognitive services will become embedded in many marketing applications through open APIs, SDKs and community initiatives. They have to potential to solve a great deal of the inaccuracy and latency in how brands interact with customers. The question is not so much about when or how cognitive systems will become mainstream in marketing but whether customers will even notice.

Thursday, December 17, 2015

IDC CMO FutureScape: Predictions for 2016 and the Digital Transformation

Think marketing has already experienced the biggest impact from digital transformation? Think again. IDC CMO Advisory Service predicts that CMO jobs will turnover 25% per year; that 20% of marketers will blow up their funnel; and that cognitive marketing as a mainstream practice is not far away.

Here are our most recent predictions.


  1. By 2017, CMOs will spend more on content marketing assets than they do on product marketing assets. For decades, the product launch has reigned as the kingpin content event. With a "bill of materials" stretching through multiple Excel pages, product marketing assets suck up a major portion of the marketing budget – and much of that content is wasted. The days of product content dominance are numbered. Product content will remain important but it will take its place behind the content marketing assets matched to decision-journey stages.
  2. By 2020, 50% of companies will use cognitive computing to automate marketing and sales interactions with customers. A few leads go right to sales. But the majority need further qualification and extended nurturing. Companies will increasingly turn to smart systems that automatically assess and respond to buyers at the point of need.  IBM recently added Watson to its marketing cloud offerings. The question is not when cognitive marketing will become mainstream – but rather, will anyone notice?
  3. By 2017, 20% of large enterprise CMOs will consolidate their marketing technology infrastructure. Marketing has been absorbing marketing technology a bite at a time for more than a decade. Many organizations now manage dozens (if not hundreds) of point solutions. Just as marketing environments are hitting the wall of this operational complexity, marketing tech vendors are building solid integrated platforms – tailorable through a partner eco-system. A fortuitous convergence of supply and demand.
  4. By 2020, 33% of CMOs will outsource some digital marketing activities via marketing-as-a –service. Marketing-as-a-service is a bundle of technology and marketing services that enable world-class digital marketing capabilities to be outsourced. MaaS offers CMOs an attractive, viable alternative to owning (and operating) everything.
  5. By 2018, predictive analytics will be a standard tool for marketers, but only a third will get optimal benefit. Early adopters of predictive analytics for buyer behavior report amazing results. The benefits come from the ability to discover hidden segments that have a high propensity to buy. Marketers can also better serve these segments with behavioral targeting. However, the majority of marketers face big challenges to achieving the benefits.  Chief inhibitors? Lack of statistical skills, stubborn organizational silos that won't integrate data, and a culture that resists truth when it goes against tradition.
  6. In the tech industry, CMO job turnover will continue at the rate of 25% per year through 2018. In 2015, 59% of tech CMOs in companies larger than $50 Million in revenue had been in their job for less than two years. Some CMOs get pulled out of their job. The best and brightest get invited to join hot growth companies or exciting tech businesses sprouting as divisions in other industries. Other CMOs get pushed out. Some just can't live up to the requirements of digital transformation. Others are discarded by laggard CEOs who just don't understand modern sales and marketing.
  7. By 2020, 20% of marketers will abandon the traditional funnel in favor of a customer-centric model. The light of data increasingly reveals the reality of buying behavior. That same light also reveals major flaws in the traditional funnel. The sales funnel is 114 years old and never meant for the digital era. Rabid funnel advocates cling to the past with ridiculously convoluted updates. But making the funnel more complex with extra loops and stages just puts lipstick on the proverbial pig. Forward-leaning companies now experiment with customer-centric models that respond to real buying challenges in innovative ways.
  8. By 2017, 60% of CMOs will lag in implementing recommended benchmarks for marketing technology staff investment, increasing the rift between the CMO and CIO. Marketing is the fastest growth area for new technology investments, with growth projected at an average 9% per year through 2018. Given this situation, you might expect marketing to be ahead of the curve – leading the way towards technology investment and staffing. However, IDC believes that tech marketers are underspending and under hiring. Only 2.6% of marketing program dollars go towards technology and only 1.6% of marketing staff are primarily tech.
  9. In 2016, 70% of companies offering cloud or digital services will increase investment in post-purchase marketing. Marketing is primarily associated with the early stages of the buyer's journey, the stages IDC calls Exploration and Evaluation. However, as the ownership economy evolves into a service/sharing/experience economy, companies will find that they need to market throughout the entire customer experience. For example, the fastest growing cloud software companies (those with 20%+ annual growth) have a more holistic approach. They spend about 16% of their total marketing budget on post purchase marketing.
  10. By 2018, 50% of CMOs will make significant structural changes to their "intelligence" operations and organizations.  "Intelligence" as a capability is growing in importance in modern marketing organizations. Intelligence includes market intelligence (MI), business intelligence (BI), competitive intelligence (CI), and social intelligence (SI). In the past, these four functions were spread around the enterprise. Now, IDC sees more companies consolidating into a larger, single, intelligence group – often combining with intelligence functions from other areas like sales. The elimination of silos in this important area is a positive sign.

For more information, check out our free webcast of the report highlights or download the full report. [Report download may require subscription].
 

Friday, November 13, 2015

Content Strategy: Think Utility Before Customization

For a company with dozens of product lines, numerous possible personas, and a global presence, developing content can be a daunting venture. The number of permutations for information types and distribution sources can be overwhelming. But before going crazy, you might be surprised to know that customers may not need as much personalization as you think – what they really want from content is utility.

IDC's 2015 IT Buyer Experience Survey examined the content requirements and preferences of various types of technology buyers. We compared buyers who work in the IT function with those in various business functions. We compared buyers of cloud solutions with traditional on-premise technology solutions. What we found surprised us.

IDC does recommend tailoring content for specific audiences. It is helpful for ease of consumption, for relevancy, and attractiveness. However, the buyer research told us that covering some basics was even more important.

  • Highest priority – make sure content is complete. Buyer groups are much more similar than they are different. Buyers have one primary commonality – they are all human. Humans follow the same type of a decision-journey. All audience groups generally need the same kinds of information and mostly prefer similar sources to get that information.  The highest priority task should be to make sure the core information is available. Clearly and simply answer the buyers' questions for all stages of their decision-journey. Lack of critical information at a point when a buyer needs it will slow or stop journey progress.

  • Make core buying information easily accessible through at least four communication channels. Those four channels are your website, your sales team, search, and some number of third party publications - preferably voiced by objective people. Your website is the buyer's default location for all information. Buyer's talk to sales people at the point when they really need detailed answers. If sales people don't have the answers, everyone loses. (Hint: a humble Q&A fact sheet for sales is super helpful).  Discovery is the name of game in the earliest stage of the decision-journey. Search is by far the number one tool for discovery and buyers also like to find ideas for improvement perusing both general business and special interest sites.

These content tasks may be more challenging than marketers expect.  Many of the buyer's questions are not answered by even the best thought leadership pieces or the most well-messaged product data sheet. For example, Product Service Reviews was the second most desired type of content at the earliest stage of the decision-journey – not something most marketers have at the tips of their fingers.

Before going through the (worthwhile) effort to customize content for different audiences, make sure you are covering the basics and serving your customers' the most important information needs.

More information is available in the IDC report, Categorizing the Content Needs of Different Buyer Types: IDC's 2015 2015 IT Buyer Experience Study (#258780) (Subscription required)