Demand Generation - the theory and practise. #1 Gaining acceptance

Over the last few months, we have been immersing ourselves in the concept and application of B2B demand generation.

For those unfamiliar with the term, Demand Generation is a marketing process that nurtures and engages prospects appropriately at each stage of the buying cycle.

We have a number of client projects in progress at this time and are closely monitoring the challenges and successes that we encounter. This is in the interests of continuous improvement, practical insight and, of course, great results for our clients.

The principle of demand generation is the application of multi-touch marketing communications that respect, and are tailored to, where the prospect is in the buying process. In simple terms, it is holding back from trying to close the sale on first contact - because the attempt will fail unless the buyer is ready to buy.

As ever, matching the theory to the practice is the hardest part and the first obstacle normally occurs at the acceptance stage.

The theory says that we must stop the salesperson going in too soon. Instead, we must align the nature of the conversation with where the prospect is in the buying cycle.

When implementing a programme of this nature, early challenges arise when you have a sales-force that needs feeding. A proposal to slow the flow of leads in the interests of a higher rate of sales conversion further down the line is rarely popular with a team that likes to show it is active, if not always successful.

This is closely related to persuading telemarketers not to go straight for the appointment when all of the instincts and training are directed towards this end.

The demand generation process requires nothing short of a wholesale change in the sales process and sales culture, which is a big ask of any organisation. We, therefore, address this with a three-tier approach to gaining the support and engagement of Sales.

Firstly, we enter into open and shared communication with the sales teams to explain the approach.

Secondly, we run a dual system in which we work the new approach on a specific set of data and allow traditional methods to run on the remainder. This retains the continuity of supply and keeps the sales team on board during the transition.

Thirdly, we persuade senior management to adjust incentives relating to the demand generation exercise to reflect nurturing, not just closures.

Demand Generation requires discipline and a whole-hearted commitment to the methodology by us and the client. A breakdown in any area of the process undermines the programme - and, more importantly, the results.

In future posts, we will take a look at some of the specific 'in-life' challenges that we encounter, such as generating relevant content and managing and monitoring the process without a sophisticated CRM system.

Stay tuned!

Why most marketing fails

If I had a pound for every time I’d heard someone say: "we tried marketing once and it didn’t work", I could have retired long ago.

Not only does the phrase betray a lack of understanding of what marketing really is, it is often a reliable indicator of how the fateful marketing programme will have been run in the first place.

Despite many advances in knowledge and information sharing, marketing remains one of the least understood of the business disciplines. Shrouded in mystery, and slippery in its accountability, it is a topic that everybody has an opinion on and most people believe they can do better than the marketing department.

Marketing isn’t rocket science, nor does it demand significant creativity or originality (albeit a little imagination helps). Largely it is a matter of process, understanding of the human psyche and persistent effort – otherwise known as hard work.

Most marketing programmes operate like this:

A marketing campaign will be sent out. The target buyer will respond or not (most often not). Any orders will be followed up (hopefully) and the remainder will be discarded and forgotten.

This formula applies whether we are talking about a direct mail campaign, e-shot, advert, trade show or any other form of marketing.

Is it any wonder that responses are typically way below 1% and that there is no return on investment?

To run a marketing campaign in this way borders on insanity. No regard is given to the buying process and little respect is given to the intelligence and needs of the buyer. In other words, the campaign is not buyer centric.

In earlier posts, I have referred to Jolles model of the buying process and the stages that we all go through when considering a purchase. The stages apply whether it is an impulse buy or a major capital investment – all that changes is the speed with which we go through the phases and potentially the number of people that will be involved in the decision.

If we take a step back for a moment, it is clear that the buying process is highly sophisticated. The buyer operates under a whole range of influences:
– Past experience
– Peer group comment
– Social media
– Google searches
– Webinars / Seminars / Events
– Advertising / direct marketing

While advertising and direct marketing still has a role, we as buyers are much more resistant to it. We like to feel that we are researching and finding our own solutions and only want to engage the sales person in the final stages of the buying process, when our mind is pretty much made up.

An intelligent marketing programme therefore needs to take account of the buying process and run like this:

The buyer will be engaged at all stages of the buying process with methods and content that are appropriate to where he or she is in the cycle.

In the consideration phase, which may be conscious or unconscious, we need to be educating and informing to stimulate interest. This could be with White Papers, blog posts and press releases or indeed with advertising and direct mail – it is the content that is important, not the medium of delivery (which should be varied).

Once the buyer has decided to act, he or she will then start to work out exactly what they want from their purchase. Case studies, product sheets and seminars can be useful in this phase.

When the criteria are defined, the buyer will then start to look for solutions to meet those needs. Past experience, peer group recommendations and web searches will all come into play.

If our previous engagement programme has been successful, we will be firmly on the consideration list – and potentially the only name on it.

The process of converting a prospect into a client can take many months – years in some cases. Jolles tells us that we spend 79% of our time in the consideration phase, umming and ahhing over whether we have a need or not. Our marketing contact programmes must therefore be multi-faceted and continuous.

Of course, the process doesn’t stop when our product or service has been selected. We need to keep engaging the client to make sure that our solution has properly met the need and then stay in touch to ensure retention, repeat purchases and up-sell.

When we look at the buying process in this way it is obvious that simple outbound campaigns are destined to fail. Marketing must comprise multi-touch activity that builds dialogue and engages the prospect at all stages in the buying process.

The theory, when converted to practice, produces results. Recent research by Forrester Consulting showed that businesses that market successfully:

1. Focus on lead generation as a process


2. Profile and segment prospects based on customer behaviour (not just demographics)


3. Design content that builds dialogue


4. Employ some form of lead scoring / prioritisation measure


5. Nurture prospects that are not yet ready to buy


6. Make certain that marketing works collaboratively with sales
   

The Forrester research further shows that these businesses enjoy a more robust pipeline, better customer insight, improved marketing and sales accountability and ultimately improved marketing ROI.

What more can anybody want?

Acknowledgements

How managing leads pays off in a stronger, more qualified pipeline - Forrester Consulting November 2009

Adam Needles - Demand Generation Blog 2009-10

Integrated marketing

Marketing a product or service has many challenges. First, there is a need to raise awareness of the brand and promote it's promise; second, the marketing activity must drive sales and get customers to sign on the dotted line. Creating a truly joined-up marketing campaign is the ultimate challenge for every marketer.

Traditionally, marketers have thought in terms of above-the-line for brand building and below-the-line for response. Now the line is more blurred. Pressure on budgets means there is rarely room for campaigns that do one thing or the other: we are being forced to think holistically.

The danger of enforced cutbacks is that we think excessively about channels and too little about target markets and niches. The standard response to reduced marketing budgets has been to make wholesale cuts to specific media and channels. The most dramatic cuts have occurred in newspaper and magazine advertising, swiftly followed by direct mail and sponsorship. The principle beneficiary has, of course, been e-mail marketing and social media, not I suspect because they work, but because they are quick and cheap.

We need to carefully consider if these lower cost media are really effective alternatives.

Rather than scrambling for social media programmes, marketers need to step back and realise that it is the interaction of a variety of media that raises awareness and ultimately drives a purchasing decision. A reduced budget should be addressed with focus on a more tightly defined and better understood target audience, not 'we cannot afford to advertise' or 'we cannot afford the direct mail programme'.

An integrated marketing approach is not, in itself, a strategy: it is the tactical implementation of a marketing strategy. The distinction is important, because without the right strategy, no amount of talk about integrating channels and mediums will make any difference.

When all is said and done, an integrated marketing approach is not an option, it is essential. The notion that different channels perform different roles is wrong.

Identify the issue and own the conversation - effective engagement in B2B marketing

The nature of B2B marketing is changing - the evidence is in our pipelines. The decision making process, which has always been slow and complicated, is now even longer and more unwieldy.

The economic climate means that the old adage of 'you'll never get fired for buying IBM' no longer holds true. Now we can say ‘you'll never get fired for deferring a purchasing decision' or 'you'll never get fired for implementing the lowest cost solution’. The shadow of the unseen decision maker- more often than not the finance department - looms large.

Marketers need to rise above the frustration and develop new strategies to generate profitable and sustainable demand.

Adam Needles of Silverpop pointed me to Jolles model of the decision making process. A more sophisticated interpretation of AIDA, it helps us consider our proposed activities in the context of where a prospect is in the buying cycle.

An enlightening finding is that purchasers spend 79% of their time in the acknowledgement phase - deciding whether or not they have a need that requires satisfying at all.

Armed with this information, we can make great sense of the importance of structured and relevant engagement marketing activity. This might include inbound marketing, such as search and social media, or more traditional outbound tactics including sponsorship and advertising. These are all areas where it is hard to show a short term ROI, but, as shown by Jolles model, they need to be in every marketing plan in one form or another.

The key to ensuring the investment is ultimately returned is buyer relevance. Businesses have to commence and maintain a dialogue with prospects on issues that are relevant to the buyer. The mantra must be: identify the issue and own the conversation.

Richard Bush, MD of Base One Group said recently:
"We need to change our traditional approach of: 'Find; Convert; Develop; Keep' to 'Engage; Convert; Develop; Keep'".

How to engage is the tricky bit. Insight is at the heart of building more buyer-centric campaigns and a variety of techniques can be used. There is, of course, the option of formal research, but more economically, a Twitter search is a great way of feeling the pulse of people's reaction and opinion on any topic. A simple Google Alert can do the same job, as can reading the trade press. And let's not forget the basic principle of keeping engaged with sales – talking to the people that are talking to customers every day.

When the central issue is identified, it can be used as the platform for advertising messages, email campaigns, blog posts and press releases that inform and engage. The goal is 1:1 marketing on a mass scale.

There is no denying that it is difficult. The central issue for one audience will be different to the central issue for another. Segmentation, niching and top-slicing are probably the best chances that we have got and, even to get to this point, research, data analysis and an incredibly robust CRM system are essential to delivering the right message to the right prospect at the right point in the buying cycle.

Can it ever be automated? Companies like Silverpop and The Annuitas Group are making immense strides with lead scoring and lead nurturing, but even with great systems, marketing messages that don’t engage are lost in the wind.

The business that can identify and own the topic of the day is the business that will be top of mind when acknowledgement moves to search.

Leave Auntie AIDA alone - understanding consumer buying behaviour

The esteemed consultants at McKinsey have been burning the midnight oil to come up with the startling revelation that consumer purchases are, wait for it, needs and wants driven.

Yes, it’s true. In its recent paper on the Consumer Decision Journey, McKinsey challenges the linear progression of consumers from awareness to purchase and now says that consumers start with a trigger event that spurs them into action: they decide they need or want something and then set about finding it.

Well, knock me down with a feather.

The disturbing thing, beyond the fact that people are actually paid to come up with this stuff, is that Mckinsey is confusing the psychology of buying with a marketer’s approach to intervening in the process.

The linear progression that McKinsey challenges is based on AIDA – Awareness, Interest, Desire & Action.

To my knowledge, nobody has ever maintained that this is how people buy. We have understood since Maslow was a boy that human actions are based on fulfilling needs. When we have a need, we set about fulfilling it at a speed dictated by the urgency of the requirement and the degree of risk in the decision.

A B2C or B2B marketer’s challenge is to intervene in the process and create a purchase of their product at the highest possible price. This could involve stimulating an impulse buy or making sure that the brand is on the consideration list for a more measured acquisition.

‘A’ stands for ‘attention’ or ‘awareness’ and makes AIDA a good guiding principle when developing the approach to anything from a new brochure to a long-running multi-media campaign.

In the context of a shop, AIDA can mean grabbing attention with a compelling display and then turning the initial curiosity into desire with a great product and packaging. This, in turn, should lead to the action of a purchase.

A brochure or a website, be it B2B or B2C, should follow the same principle. The creator must find the compelling Home page or cover message that encourages the reader to delve deeper and deeper until action is taken.

Awareness comes into play for the more complex decisions when the purchaser may decide to explore the market. A marketer needs to create awareness to ensure the product or service is in the consideration set in the first place. This awareness could be created by brand advertising or a face-to-face relationship, either way it is a necessary pre-curser to interest in the marketer’s product, the decision that it’s the right solution and the action of purchasing it.

AIDA remains valid and has its place for those that understand it. To claim insight from the revelation that purchases are needs and desires driven is like proclaiming the Earth orbits the Sun.

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