Why B2B Marketing Fails Its Mission (Part 2)

Proving Trustworthiness

As we mentioned in “Why B2B Marketing Fails its Mission (Part 1)”, getting on the short list requires proving to be trustworthy. To accomplish that, a vendor has to pass three critical hurdles.

Hurdle 1: This is a waste of my time.

From the buyer’s perspective, this is a given until proven wrong. B2B Marketing typically wastes a buyer’s time with self-serving information that doesn’t help the buyer.  Now that B2B marketing generally has a bad reputation, it must earn the buyer’s trust by doing the opposite of what it normally does. It must focus all effort on understanding the buyer’s world (perhaps even better than the buyer) to clearly understand the relevant challenges and propose useful solutions.

The first sign that B2B Marketing is beginning to pass this hurdle is found in the first metric:email open rates. If the targeted recipients are opening at a rate of over 10%, then at least the subject line appears to have been relevant to the prospect.

Even after opening the email, the recipient still assumes that this is a waste of her time and looks for the first evidence of this fact so she can move on to something else. Gimmicky subject lines designed only to lure the prospect into opening the email are only going to make things worse.

This happens because B2B Marketers don’t conduct the necessary research to know what message they should be communicating.  They claim that they don’t have time to do proper research.

Instead, they do what’s easy for them and write about what they know—their own company and their own products.

As the result, the buyer gets this message instead of a relevant one: “Vendor ABC is the leading provider of product XYZ…”

It’s a waste of time for both buyer and vendor.

However, it doesn’t have to be.

Hurdle 2: Is this for real?

If the vendor has NOT wasted the buyer’s time and has instead described her challenges in a clear and logical way, the buyer’s curiosity should be piqued—  because where there is smoke, there is fire, right?

On the contrary, her next question is still one of skepticism—is this for real? After all, this point is normally where things start falling apart and turning into the usual self-serving, “Vendor ABC is the leading provider of product XYZ…”

The next step in the buyer’s journey is to turn this cautious curiosity into real interest. This doesn’t happen over one email. It will take several high-quality emails that are consistently on-message to convert curiosity into real interest.

The first sign of real interest is clicking on links that take the buyer to additional relevant information.  However, more important than even click-through rates is increasingly high open rates. As a potential buyer begins to recognize the brand of this relevant information, she continues to open communication from that source, strengthening both her interest and belief that this might actually be a different kind of vendor. That’s how a vendor ends up on the short list of vendors that are invited to present.

Hurdle 3: Should I invite them in?

Some sales executives might say, “We can’t wait to get invited. We must try to get the appointment as soon as possible. Otherwise, our competitors will get in there first”.

Though you shouldn’t necessarily wait until you are invited to contact the buyer, the best time to call is when the potential buyer is already seriously thinking of inviting you. Then it becomes a simple matter of scheduling the date that works.

To pass this hurdle, B2B Marketing must make available to the potential buyer (or someone in the buyer’s  company) a sufficient amount of evidence to prove you are worth the risk of scheduling a meeting.  Sufficient amount means white papers, case studies, blogs, customer interviews, and more that consistently demonstrate the vendor’s commitment to understanding and solving the buyer’s challenge.

B2B Marketing must provide overwhelming evidence that you are a Top Tier Vendor in that segment.

Conclusion

To summarize, the job of B2B Marketing is to get your sales rep onto the short list of vendors that are invited to present to a potential buyer.

In order to achieve this, your Marketing team needs to provide overwhelming evidence that you are a Top Tier Vendor in the buyer’s sector, which is demonstrated by full understanding of the buyer’s problem and the ability to create  a viable solution as evidenced by deeply informative content found on your web pages, white papers, social media properties, case studies, customer testimonials, and more.

While Tier 3 vendors continue to put out “ABC, the leading provider of XYZ…”, you, as a Top Tier Vendor, can work on becoming a go-to-resource for your potential customers, giving you relatively easy access at low cost.

The end result is that you enjoy higher closing ratios and shorter sales cycles, which translate into a high growth rate at low sales and marketing costs— which is what we all want in the end.

Why B2B Marketing Fails its Mission (Part 1)

The mission of B2B Marketing is to get Sales on the short list of vendors that a prospective buyer wants to meet with. That is what happens to Top Tier Vendors—they get invited to present anytime a potential buyer has a need.  

However, the vast majority of B2B companies are Tier 3 vendors—they compete with hundreds, if not thousands of other companies for the same customer base. Tier 3 Vendors never get invited, so they  must spend a great deal of time and money trying to get noticed for a deal they are unlikely to win.

The first step towards building predictable revenue and high growth is to focus on becoming a Top Tier Vendor in a clearly defined market space.

What Tier Vendor are you?

This concept of vendor tier is critical to the goal of achieving high growth rate. Tier 1 and Tier 2 vendors grow at a high rate. Tier 3 vendors either miss their targets or grow at an anemic single digit level.

Tier 1 Vendors

A tier 1 vendor is the market leader in its chosen market space. It has a deep bench when it comes to products, services, and expertise that are a high fit for its customers. As a result, it is the vendor that most customers want to buy from. It also charges a premium to customers for the privilege of buying from the leader.

There are usually no more than 2-3 Tier 1 vendors for any given market.

Tier 2 Vendors

A Tier 2 vendor is a strong niche competitor, but it probably doesn’t have the same scope and scale as a Tier 1 vendor. However, within its limited scope and scale, its offer is as complete and unmatchable as a Tier 1 competitor. In addition, a Tier 2 vendor typically charges less than a Tier 1 vendor.  Therefore, for customers who don’t need the scale of Tier 1, a Tier 2 provider is a very attractive alternative.

There are usually no more than a handful of Tier 2 vendors for any given market.

Tier 3

Any B2B company that is not a Tier 1 or Tier 2 vendor is automatically a Tier 3 vendor—meaning that it is one of many dozens, if not hundreds, of vendors attempting to serve the same customer base with an undifferentiated, “me too” offer. Tier 3 offers are typically seen as “commodity,” and price competition is the only way to win deals.

In this article, we will refer to Tier 1 and Tier 2 vendors as a Top Tier Vendor.

The Real Test of Top Tier Vendor Status

Here is a simple test. If your prospective customers know who you are and what you do, then you are a Top Tier Vendor in your chosen market. On the other hand, if your target customers don’t know you, then you are a Tier 3 vendor as far as that market segment is concerned.

If we have agreed so far, then the mission of B2B Marketing should be to make a B2B company a Top Tier Vendor in its chosen market space.

What we typically see from vendors is an unfocused, highly undifferentiated message that goes something like, “Company ABC, the leading provider of XYZ, has the best…” No one really cares, so that vendor is relegated to Tier 3.  

Here is a question for you, the CEO, to ask yourself:

  • Would you rather be a Tier 3 vendor competing with everyone for anyone’s business and earning hair-thin margins with anemic growth, or
  • Would your rather be a Top Tier Vendor competing with less than a handful of other vendors for the business of a market that knows and respects you and invites you to present your solution, so that you grow at a healthy rate and earn healthy margins?

The Power of the Short List

From the vendor’s perspective, getting on the short list of a buyer confers two very important advantages:

  • Since the list of competitors is short, the probability of a win is much higher, resulting in more predictable revenue and higher growth rate.
  • Since the list is short, buyer-vendor engagement level is high. Reps can more accurately gauge their chance of winning and can exit early if they don’t see a win. This further reduces wasted sales resources, which reduces cost of sales.

However, from the buyer’s perspective, getting on the short list depends on whether you as a vendor are trustworthy or not.  Can the buyer trust you to not to waste her time? To be honest with what you can and cannot do? And most importantly, is trusting you going to cost the buyer her reputation, or even her career?

If you are a Tier 3 vendor, the answer is simple. You are not trustworthy, and the only thing that would make up for the risk of working with you is rock-bottom prices.

However, if you are Top Tier Vendor, you have proven to be trustworthy, and you are invited in to present.

The purpose of  B2B Marketing is to make your company a Top Tier vendor so that you can get on the short list.

From there, you just have to prove to be the best fit for the opportunity— and that’s Sales’ job.

Read about the three hurdles in proving trustworthiness.



Five Factors Affecting Revenue Growth (Factor 5): Manage by Metrics

In his book “The End of Marketing as We Know It”, Sergio Zyman, then Chief Marketing Officer of Coca Cola, spells out his success in driving Coca Cola to the number one beverage company in the world. At a time before cloud based services, Sergio tracked numbers daily. He would run an ad and then measure how many cases of Coca Cola products that ad moved. If it met his metrics, the ad continued to run. If it didn’t, it was cut.

Among B2C companies, Zyman is not alone in his obsession with running Marketing by the numbers. Jim Kiltz, ex CEO of the Gillett Company and author of “Doing What Matters,” also ran his company by the numbers. In fact, he advocated for the ZOG (Zero Overhead Growth) and NOG (Negative Overhead Growth) principles that basically said companies should grow their sales with no change in selling and marketing costs—a far cry from the current situation of B2B companies.

We have not been able to find any examples of B2B companies that strictly run Marketing by the numbers. Yes, nearly all B2B companies measure and track sales results, but that’s about it.

Even in Sales, most of what is tracked is at the tail end in closed wins. Few companies, if any, track sales cycles, closing ratios, average deal sizes, lost deals, etc., by rep. Even fewer track how early reps cut loose opportunities that go nowhere.

Managing by Metrics is how companies move from Good to Great. It requires substantial work, but it pays a lot of dividends in the long run.

In Conclusion

It is our belief that each of these Five Factors can significantly improve a company’s ability to grow Sales. Working on all five can completely revitalize a company that is seeing flat sales.

Our recommendation is to always start with Factor 1. Nail that, and the others will be much easier to accomplish.

Please contact us with any questions or thoughts. We are here to help.



Decision Point: Build or Buy?

As you can see, there is a lot that goes into building and maintaining the operational excellence necessary for generating consistent revenue growth. Not only does a company need to produce high quality and compelling content regularly, but it must also continually distribute this content to its targeted audience, track engagement, make necessary adjustments, and pass those that are ready to the next operations team.

A common mistake that many companies make is to think that they can hire one or two people who will take on the various roles shown in the chart to the right. It doesn’t seem to work out that way, no matter how hard the marketing team tries to learn and master these various disciplines.

 

Position

Salary/yr.  

Marketing Head

$108,000

Researcher

$45,000

Copywriter

$84,000

Graphic Designer

$84,000

Video/animation

$84,000

Social Media

$60,000

Email marketer

$60,000

SEO specialist

$60,000

Prospecting Head

$84,000

BDR

$55,000

Sales Support

$45,000

 

A better alternative is to keep your marketing team lean with just the Head of Marketing, who is responsible for developing your marketing strategy, and a smart, energetic product marketing manager who will work with sales to develop product marketing campaigns.

With your internal team controlling your marketing and sales goals, strategies, and metrics, you can now work with a partner to provide you with both the Marketing Operations and Prospecting Operations deliverables you need.

This approach gives you the following benefits:

Focus. You focus all hiring where it matters the most—on those that are integral to the design and development of your products and services.

Rent-to-own. You let others make the required investments toward achieving the operational excellence that is necessary to deliver the quality and quantity of results that you need to consistently grow your revenues.

It is the classic case of paying for what you use, rather than for the infrastructure needed to deliver what you use.

 

About SOMAmetrics

SOMAmetrics is a sales productivity enhancement consulting company that enables clients to consistently grow their revenues by fixing three critical sales hurdles—insufficient sales pipeline, low conversion rates, and access to new markets.

We provide the best practices, new market research, SEO, digital marketing, sales enablement, performance metrics, and sales and marketing automation services that clients need to consistently achieve their revenue objectives.

Our best practices, systems, and processes have been honed through working with over 100 small and mid-sized B2B companies serving a wide range of industries including: Financial Services, Education, Healthcare, Manufacturing, and Data Centers.  Please contact us today:

Phone

510 206 9264

Email

eskinder@somametrics.com

Website

www.somametrics.com


Critical Success Factor 4: List Management

In Critical Success Factors 1-3, we discussed the importance of Content, Content Distribution, and Automation in the operation of B2B Sales. Here, we discuss the final factor, List Management.

Characteristics

Importance/Impact

Duplicate records

Duplicate records are inevitable as you continually build your marketing list. However, they pose a significant problem and must be continually managed. At any given time, you should strive to keep your duplicate records at under 1%.

Duplicates happen when your marketing team uses different sources of lead acquisition and enters leads into your database without first checking for duplicates. Sometimes marketing does this in order to keep a prospect in multiple marketing lists. However, there are ways to do that without creating duplicate records.

Opt outs

A key aspect of managing lists is ensuring that someone who opted out of one of your marketing programs is opted out of all, unless the recipient chose to opt out of specific marketing programs.

You should treat opt-outs very seriously. If you receive even a handful of spam complaints, you could become blacklisted, which means you would not even be able to send emails internally to each other until you clear yourself from the blacklist.

Bounces

Email bounces occur when mail can’t be delivered—this can be because the person is no longer at the company; she created a false email address just to get something she wanted; or because she created a temporary email for such a purpose, and it is no longer active.

You must keep your lists clean on a regular basis as bad records give you an inflated representation of your actual audience size. Too many bounces can also cause you to be flagged for blacklisting.

Email validation

If your sales reps bring a list of prospects with emails and claim that these prospects wish to receive marketing emails, they should first be validated before being placed in your system. There are online email validation tools that start at $14/1,000 records, and the prices drop for larger list sizes.

List segmentation

This is perhaps the hardest part of list management—keeping a tight control of the audience so you can send highly targeted messages. For example, you want Jim Jones to be part of your overall monthly newsletter, but you also want to keep him on your Hospital CIO list and your overall CIO lists. What you don’t want are three records of Jim Jones—you just want Jim Jones to be in all three marketing campaigns.

As you can see, a lot of work goes into creating engaged marketing audiences that are more inclined to meet with your sales reps, thereby providing you with a consistently high quality and quantity of sales pipeline. You may need help with some of this work. The next section covers that. 

Critical Success Factor 3: Automation

Both Marketing and Sales Automation are crucial to the success of B2B sales.

Marketing Automation

Purpose

To automate the creation and nurturing of a lead by delivering the right content at the right time based on action previously taken (or not taken) by the prospect.

To provide intelligence on the buying intent and readiness of marketing created leads and automate the handoff to the next step based on lead scoring and grading.

Used by

Marketing

How it should work

Should be set up to send targeted messaging to a targeted list in the right logical sequence, grade and score the leads based on the action they took and their profile (title, company size and industry, etc.), and automatically flag the right high-scoring leads in the system that Prospecting and Sales work with.

Sales Automation

Purpose

To automate, facilitate, and accelerate the time consuming and expensive one-on-one new customer-acquisition related activities in which your Prospecting and Sales teams typically engage.

Used by

Prospecting, Sales

How it should work

Marketing Leads should only be made available in the CRM used by Prospecting and Sales when that lead is ready to be further qualified.

The system should enable the Prospecting team to see their high-priority work views (those they have already contacted but have not yet fully qualified) separately from their general prospecting pipeline (those they haven’t touched at all or are still pursuing to make first contact).

The final status of the lead here is SQL (Sales Qualified Lead), which means the lead is qualified and has agreed to a meeting with a sales rep.

The system should be able to do validation and ensure that all the necessary fields are filled out.

The system should automatically assign the lead to a sales rep and send the rep a notification email without the Business Development Rep having to do anything further than changing the status when all fields are completed.

Such automation ensures data integrity, accelerates sales, and avoids human error.

Figuring out how much to pay for Automation

There are several marketing and sales automation tools available, and at significantly varying prices. The question is, how much should you pay for a given automation tool?

The answer, generally, is that it depends on what you need—more capability and flexibility comes at higher prices.

However, we think that a better answer comes from considering its impact on the productivity of your various teams. Remember that your payroll is likely the single largest expense category for your company. Anything that improves productivity (improves the ability of the same employees to do more without working longer hours) should be worth serious consideration.

Here is a simple analysis to make the point. Let’s assume that your average, fully burdened salary for a member of your marketing/prospecting/sales team is $50,000 per year.

Product A is clearly far cheaper than Product B. However, Product B can improve productivity by 10% while Product A can improve productivity by only 5%. In the end, Product B is the superior value since the question is not just how much the product costs, but how much impact it has on your operations. The last line compares the two numbers by dividing the net value by $50,000 to arrive at the net productivity gains.

   
 

Product A

Product B

Fee / user/ year ($)

300

1,800

Productivity Gains (%)

5%

10%

Productivity Gains ($)

2,500

5,000

Net gains ($)

2,200

3,200

Net gains (%)

4.4%

6.4%

 

The Issue with Data—What is too much versus too little

One of the recurring problems we come across is that the management’s need for data is at odds with its need for employees to keep their work simple and efficient. If you want a lot of data, then you are asking your people to spend more time on data entry and less time on what should be their primary work.

The key is to get the data you need as a natural outcome of the work they do. This is a lot easier said than done, and any system that you use must be thoroughly evaluated before implementation.

The first step is to identify the essential data you need to qualify a lead and move her through your sales stages. This should not require much data, but it should be clear to all your teams that without this information, they are likely to waste a lot of time and effort trying to engage the wrong people.

On top of that, there may be additional data you want to collect, but be judicious and let employees provide this in a free text format rather than forcing them to enter into discrete fields. You are far more likely to get useful information this way, since forcing them to enter data could prompt them to just click on something to get past your validation.

The end goal is twofold: to provide employees with reports and dashboards that help them manage their day-to-day productivity, while you gain insight on what is working and what isn’t.

Make these two goals converge, and you will have plenty of high quality—and useful—data.

Read about the final Critical Success Factor, “List Management”.

Critical Success Factor 2: Content Distribution

While the first critical success factor in B2B sales involves the quality of your content, the ways in which that content is distributed to your audience is also important.

Medium

Key Metrics

Description

Email

Click through rate, unique opens

The purpose of email is to produce awareness of something you want the recipient to notice. You want to point out a critical issue and direct recipients to where they can learn more about it.

Therefore, your email campaign must be designed to support your prospects’ desired process for finding solutions to their problems, as well as the vendors with which they want to partner.

Emails must be designed to get a click to where you can engage the prospect more. Of course, emails must be opened in order to get the click, but the opens alone tell you very little.

Website

Inbound leads, search ranking, web traffic

Your website’s number one role is to act as the central repository for the information your prospects need to determine that you should be on their short list of vendors they should engage to solve a particular set of their problems.

It is a powerful communication tool and must be used as such. You must rely on your website to bring in leads straight to your sales team, as well as to nurture other leads for the long term.

You must know what key terms your prospects use to search, which pages are the most visited, and where they go from there. Continually optimize your website to attract, engage, and nurture prospects.tor

Social Media

Followers, likes, shares

Your social media platforms (Facebook, LinkedIn, Twitter) are where you truly build your brand. They allow you to create a community of loyal customers, employees, and future employees.

Social media is the appropriate place for you to share your views that are more socially and politically oriented, such as environmental responsibility, diversity (cultural, racial, gender, age, etc.), and so on. It is a great place to post new job openings, have current employees discuss the importance and impact of those roles, etc.

In short, your social media properties are where you correctly position your company.

Read about the third Critical Success Factor, “Automation”.

Critical Success Factor 1: Content

One critical success factor in the operations of B2B sales is content. Content is how a prospect can determine the degree to which a vendor understands her problem and can solve it. The more quality content you have, the more certain she becomes that you must be on her short list of vendors to evaluate— making it easy for your sales reps to meet with her.

Since this is a journey for the prospect to take, you must have a variety of content types designed to get her started on this journey so that she can acquire more knowledge and conviction regarding your company and continue to an actual sales engagement with one of your sales reps.

Type

Purpose

Usage

Emails

Create awareness

Email continues to be the most effective outbound communication medium. Its sole purpose is to make the prospect aware of a specific problem and what the logical next step might be towards solving that problem.  Ask the reader to take a small incremental step forward, but always have a complete means by which the prospect can get in touch with you if she is ready to engage.

White Papers

Educate: the generic problem and solution.

The purpose of a white paper is to enable your prospects to clearly see the type and extent of the problem(s) they have, analyze its cause(s), and provide a vendor-agnostic solution to the problem. In other words, your objective is not to sell your product or service, but to establish yourself as a credible partner that can help your prospect solve their problem(s).

Webinars

Educate: specifically about your solution

Webinars are similar in purpose to White Papers. They both require a significant amount of time and effort to produce quality content. However, webinars are typically expected to discuss your product and solution, perhaps with a demo (if appropriate).

Case Studies

Prove

Case studies give the prospect a practical and relatable example of how your solution solves problems such as the one the prospect is currently experiencing. The power of a case study can be diminished if you are unable to use the customer’s name (especially if it is a highly recognized company). Be sure to do what it takes to get permission to mention the client by name on at least a few of your case studies.

Blogs

Educate Interest

Blogs are relatively short (1-2 pages), highly targeted, and highly educated opinions. Have your internal experts write them, and then have them polished off by your editor.

Video / Animation

Arouse curiosity

These are short (60-90 second) video clips that explain the main issue and the solution. The goal is to create a fun and engaging way to communicate information at a high level.

Product Information

Educate

This is where you get to talk all you want about your products and services. It is best to keep the information simple, factual, and engaging.

Read about the second Critical Success Factor, “Content Distribution”.

Operational Excellence (Part 1): Marketing

The whole point of B2B marketing is to get your sales people onto the short list of vendors that a prospect is considering.

That can only happen if your marketing is compelling, which will only be the case if you have identified real problems you can solve. The process of identification is a lot easier if you focus on a well-defined group of customers that you fully understand, rather than going after a large number of prospects that you don’t really understand.

Focusing on a well-defined group of prospects is what makes marketing work. Everything else might as well be junk.

Objective(s)

The number one objective of marketing is to get your prospects to actually reach out to your sales team. These are people who are ready to evaluate potential vendors. Their numbers are likely to be small—typically under 10% of your target market.

Next to that is fully engaging the remaining 90% and gradually converting them into Marketing Qualified Leads, or MQLs—people who are interested in finding out more, and may even be willing to meet with a sales rep.

Best Practices

Awareness→ Curiosity→ Interest→ Action

The process always starts with the prospect’s awareness: awareness of the extent of her own problem, that there is a solution to her problem, and that you have a potential solution. You want that awareness to be converted into a curiosity to find out more, and then an interest in learning more, which ultimately leads to some action—such as a willingness to attend a webinar, download a free trial, or talk with a sales rep.

In rare cases, the above journey might only require the first email you send out because the prospect is actively searching for a solution. In other words, she was already aware and interested before she even knew you existed. As soon as she finds a potential candidate, she is ready to meet and evaluate.

Most of your prospects, however, are not aware that they have a problem, much less the type or extent of the problem. If they are aware, they don’t really think the problem is a pressing issue. It is the responsibility of your marketing team to convert a mild and vague concern into an urgent one that must be dealt within sooner than later.

That is accomplished primarily by gaining a nuanced understanding of the prospect’s world through research, developing highly relevant and engaging content around it, and then distributing that content where the prospect is most likely to find it.

Key Metrics

Here is what you are trying to find out: did your prospect come across your message (awareness)? Did she view it (curiosity)? Did she take further action after viewing it (interest turning into some type of action)?

Key indicators are (in the order listed): Emailing or calling you based on your marketing; attending or registering for a webinar; filling out a form; viewing a video; liking/following you on social media; clicking on a link; and opening an email.

Read about the second crucial operation of B2B Sales, “Prospecting”.​​