Friday, September 03, 2010

Demand Generation In the Face of Frugalnomics and Internet Fueled Decisions

Formally defined, Demand Generation is the use of targeted marketing programs to address four key objectives for B2B marketers:
  • Building awareness of a company’s products and services;
  • Establishing relevance to a prospective buyer/end user;
  • Supporting validation for the purchase; and
  • Mitigating customer concerns.
Successful demand generation programs are uniquely challenged today, and must address a changing landscape where:
  • Economics are driving more decisions;
  • The Internet is fueling a prospect driven buying cycle, and;
  • Prospects are faced with information overload resulting in shorter attention spans than ever.
Frugalnomics Changes Everything
According to Forrester analyst Scott Santucci, "Go-to-market models always change during periods of disruption, and this economic downturn has been deep, long, and might not even be over. The more buying organizations are a forced to do-more-with-less they adopt different business patterns.” We term the current shift Frugalnomics, where two successive economic downturns over the past decade have produced an age of austerity where buyers demand quantifiable proof that any investment will yield a beneficial bottom-line impact and provide maximum value compared to alternatives. 

This shift in B2B buying cycles and requirements has significant impacts on marketing and demand-gen success. According to Forrester’s Mr. Santucci, “Today, buyers are looking for business partners that will help them drive business results or outcomes – rather than bundle their products and services into solutions.”

In order to attract, connect and capture frugal buyers, marketers need to produce content that raises economic interest, quantifies value, and boosts urgency in a time where it’s easier to do nothing than make a wrong investment. Randy Perry, VP of Business Value Selling for IDC indicates that times have indeed changed, where now “over 90% of buyers indicate that to connect with them, B2B vendors need to prove that solutions can deliver a quantified bottom-line impact.”

A Prospect driven Buying Cycle Changes Everything
Back in the day, in the 1970s and 80s, companies like Xerox and IBM established the best practices on how B2B, and especially technology, was successfully marketed. But the successful ways to sell in the past are long gone.

One of the catalysts for this change has been the Internet, which has clearly made more information and tools available to decision makers, and put the buyer in control of the buying process. As a result, B2B sales and marketing will never be the same, evidenced by “how so many things we did when we sold to businesses in the past — things that actually worked well — no longer work”, according to Jefre Ogden, author and President of Find New Customers.

More Stakeholders than Ever
The old method used to be to get to the Decision Maker to get the sale. Unfortunately today, B2B buying decisions have more stakeholders than ever.

To be successful in multi-stakeholder decisions, you often have to engage executives, finance, business leaders, purchasing, operations and technologists, and provide compelling value messages to each stakeholder. The challenge, how do you market with what matters to each stakeholder personally with the right content, knowledge and value metrics to be compelling to this diverse group?

Customized "Smart Content" is King
In the past, a nice website would get buyer's attention. Unfortunately, most everyone has a nice website today.

In the new world where buyers are in control, content is king. Studies indicate that 9 out of 10 buyers consumed and relied on content on their way to a purchase decision: especially white papers, eBooks, webinars, interactive analysis tools, podcasts, and video clips. And the content that worked best was content personalized to the buyer: their industry, their role, their stage in the buying process.

According to MarketingSherpa and KnowledgeStorm surveys, when content is customized, buyers indicate that the content is much more effective at converting prospects into buyers. The percentage of buyers who indicated customized content is more valuable when customized for:

  • By Industry: 82%
  • By Role / Job Function: 67%
  • By Company Size: 49%
  • By Geography: 29%
Buyers are In Control
The old mantra was that, “With enough leads, we will find more sales opportunities.” Unfortunately, buyers are inundated with cold-calls, e-mails and sales pitches, making qualified leads harder than ever to generate, and making “cold calling” a thing of the past. Information overload makes it difficult to break through the noise and connect with prospects.

According to Mr. Ogden, “9 out of 10 of buyers say, when they are ready to buy, they find you.” And when they find you do you have the right tools to engage them? The marketing mix needs to change, investing in the right tools and content to engage the buyer, rather than cold calling.

According to MarketingSherpa and IDG, “Social Media and blog content have the hype, but lag considerably in connecting with buyers, behind other more traditional marketing tools, particularly white papers, competitive comparisons and buying guides, and peer best practice / benchmarking tools.”

And if you do reach out to buyers, adding personalized value to every outreach is required. Valuable research and interactive tools are required.

Marketing Needs to go Beyond Search Engine Optimization (SEO)
One of the major ways to generate leads in the past was to optimize the corporate website for search. However, new research shows that most buyers rely on vendor relationships and recommendations and not search. According Mr Ogden, “7 out of 10 buyers say they start their buying process at vendor sites, not Google.”

This is emphasized in recent buyer surveys from SiriusDecisions, where the most trusted sources of information overall are industry analysts (cited by 31.4% of respondents) and peers (28.7%). Analyst case studies and validation, and peer social network recommendations are key to early engagement success.

Later in the sales cycle, personalized value-added content, tools and advice via the corporate web site or micro-sites is required. Don’t have the information buyers are looking for as they do their research, and don’t have the content validated by analyst and peers for credibility, and you can lose the deal.

The Bottom Line
With prospects in charge of the buying process, and more frugal than ever, today’s marketer needs to be ready with personalized and relevant content to address:

  • Prospects suffering from information overload;
  • Value conscience and bottom-line focused buyers;
  • More stakeholders with different goals, issues and value propositions;
  • Analyst and peer references
The buyer is now in control in the age of Internet fueled decision making and Frugalnomics. The successful B2B marketer and seller recognize that the old ways to success are dead. Today the roadmap to success is a proactive facilitator in the buying lifecycle, providing personalized content and analysis to help diverse group of decision makers value the correct purchase decision. Decision-driving content is required, and as a result, will continue to command a greater and growing percentage of B2B online marketing spending.

Sources:
1) MarketingSherpa and KnowledgeStorm survey - http://www.knowledgestorm.com/search/viewabstract/90153
2) SiriusDecisions B-to-B Buyer's Survey 2010
3) New Realities about B2B Buying, Jeff Ogden, SandHill.com Blog, Jun. 08, 2010
4) IDC Executive Tele Briefing on Sales & Marketing Strategies for 2010

No comments: