B2B customers have become more independent buyers in the procurement process as a result of their increasing access to information, research and peer-recommendations. In fact, this modern buyer is something of an enigma to B2B vendors. Traditional lead generation efforts such as trade show and publication advertising, direct mail, email, etc. are decreasing in effectiveness. Lead generation through social marketing has received much hype yet case studies demonstrating real bottom-line impact are still few and far between. How does one capture their attention (and wallet-share) in an environment where competition has surpassed competitive vendors to include the increasing availability of information and perception driven by customers and non-customers alike?
Sales teams and marketing organizations are experimenting with lead generation tactics in an attempt to drive both greater volumes and conversion of leads. However, innovation (and results) within a B2B’s sales process will not occur by morphing existing lead generation practices because the problem does not lie with the tactic but the department the business looks to for lead generation.
Engaging the modern B2B Buyer is no longer about sales campaigns; it’s about re-channelling your business’ sales focus, efforts and budget from external to internal practices. Real ingenuity and results will come when the business shifts their sales efforts from Customer Acquisition to Customer Development.
Traditional Lead Generation Continues To Challenge B2B CMOs
The challenges of generating high-quality leads, as well as high volumes of leads, continues to be the main challenge of B2B CMOs. Further, there has been a decline in the tactical effectiveness from overall quality and quantity of leads generated according to B2B marketers surveyed recently. In fact, many tactics declined by 50% or more in reported effectiveness per Marketing Sherpa’s 2012 B2B Benchmark Report.
Further, this study highlights the fact that one of the key barriers is the lack of internal resources in staffing, budgeting or time. The next largest challenge reported is the business’ lack of ability to stop executing lead generation tactics in order to think and plan strategically.
These findings fuel my argument that shifting resources from customer acquisition to customer development will reap the greatest reward in today’s marketplace. Gartner Group reports that just a 1% increase in a B2B’s client retention rate could represent an average 8% increase in the business’ profits. And at the end of the day, isn’t that what we’re ultimately trying to achieve: greater profits?
Rethinking the Lead Generation Source
I will admit that marketing teams are – and will be – challenged to wrestle resources and budget from traditional sales department s and tactics in a continuingly sluggish economy. However, doing more of the same garners just that: more of the same, which (as the MarketingSherpa study highlights) is more dissatisfaction with lead conversion.
Last week my partner Jeff Wilson here at Sensei Marketing and I debated this issue as a keynote presentation at the MarketingProfs B2B Forum in Boston. I presented the case for a stronger focus on Customer Development strategies to fuel the innovation required to drive greater sales results for B2B organizations. During the debate I argued that the value of existing customers, through improved customer experience and management generated:
1. Increased Quantity of Leads
Moving existing customers from being just “satisfied” to becoming an advocate will drive greater new customer leads by populating the marketplace with positive peer-recommendations and case studies; something buyers are increasing seeking before even speaking to sales teams.
2. Greater Conversion of Leads
Monitoring and measuring the customer experience with both the products purchased and the service received across the entire customer lifecycle generates the insights needed to sharpen the strategies, tactics and messages needed to improve conversion rates with prospective customers.
3. Increased Profits
A better understanding of the relationship between the efforts to maintain a satisfied customer and the profit generated from those same customers, provides the required insight and analytics that will filter and pre-qualify prospects; thus allowing the sales team to focus those limited resources on those customers most likely to drive greater profit.
Clearly both acquisition and development strategies are required for a business to thrive. However, today’s marketplace requires a new approach to acquisition that B2B CMOs are struggling to grasp. Do you argree? Where do you stand on the issue? Join the debate in the comments section below.
Sam Fiorella – Sensei
Feed Your Community, Not Your Ego
Originally posted in The Social Roadmap Blog by Sam Fiorella