By Holger Schulze
In my last post “5 Steps to B2B Marketing Success” we established a simple approach to improving success in B2B marketing, starting with understanding your audience, building a strong value proposition, mapping out the buyer’s journey, building compelling messages and content, and finally, investing in robust marketing automation.
Increasing Pressure on Marketing
But how do you ensure that all this happens at peak efficiency, you are meeting your goals, and providing solid quantifiable return on your marketing investment? Today, in many organizations the executive suite is demanding proof of ROI and CEOs are asking the marketing function questions like: What is your economic value add to the company? Where is the return on the millions of Dollars invested in marketing? What happens if I cut your budget by 20 percent? Or add 20 percent? Many CMOs inability to answer these questions in a satisfactory manner has lead to their average tenure of less than 2 years in US companies, the shortest of any C level executive role. The old adage that 50 percent of marketing budget is wasted, the question is which half, just doesn’t cut it anymore.
Contrast this with your sales organization - typically the most measured and performance oriented part of the company. No wonder you get a culture clash between marketing, often focused on activities without clear link to the bottom line, and sales determined to make quota by selling product. The result is misalignment between CMO and CEO, marketing and sales, marketing goals and company goals. Absent strong alignment behind a set of clear measurable objectives, nobody in marketing is really accountable.
Marketing Operations to the Rescue – A 5 Step Program
I believe this challenge is quite healthy as it provides strong incentives for marketing to become a truly performance driven and business critical function of the company. This is where the field of marketing operations (MO) has received a lot of attention lately as a new marketing function designed to create cross-company alignment, performance visibility, and the foundational systems and processes that enable marketing to scale, become more effective and efficient, and contribute to company goals. Such a systematic marketing operations approach brings structure, process and accountability to the marketing function. It also establishes institutional knowledge on how marketing is done - this is important considering the high turnover in many marketing departments and the resulting loss of institutional knowledge. Marketing operations is basically injecting left-brain thinking into the traditionally right-brained creative marketing function. This can be intimidating at first. So let's take a look at how we can break marketing operations into smaller steps and tactics.
Step 1 - Establish a Formal MO Function
Marketing is getting more complex with new technologies such as social media, new tools like marketing automation, and higher performance and ROI expectations. A formal MO function can make sure that best practices and systems are implemented marketing wide so that marketers can take on more sophisticated projects, such as campaign automation, without having to worry about underlying processes, analytics, and metrics. The analytical skill set and experience required for marketing operations are hard to find in marketing folks that have entered the field because of their creative talent, so having a dedicated MO person, and eventually MO team, with the required analytical and marketing process skills makes perfect sense.
Step 2 - Define the Scope of MO
MO adds value to marketing by creating an ecosystem that enables marketers to excel and allows them to focus on their core competencies while being in sync with the requirements of the company and its stakeholders. MO typically includes planning & budgeting, performance measurement, reporting and dashboards, marketing best practices, sales alignment, and automation of processes such as campaign management, to name a few. While marketing operations focus is on the overall performance of the marketing department, it would be a mistake not to include the other departments marketing interacts with. MO has an opportunity to align marketing goals and processes with departments such as sales, finance, and development for example to make sure that critical dependencies and expectations are managed, that goals are aligned and marketing provides value to the company.
Step 3 - Align MO Goals with Biggest Sales and Marketing Challenges
In order to establish MO, justify the investment and show its positive impact on the company, MO has to address the biggest sales and marketing challenges and bring about change. A survey by Gary Katz, CEO of Marketing Operations Partners, shows the marketing priorities in many organizations. First, "measuring marketing ROI and demonstrating value", with 73 percent of respondents selecting this issue. This goes back to the premise that current lack of demonstrated marketing ROI is causing problems for marketing departments in terms of budget funding and CMOs staying power. Second, "balancing marketing strategy and tactics" - over 60% of survey respondents say that they are having trouble aligning day to day activities with big-picture strategy and company goals. MO is designed to address this issue. And third, 57 percent of respondents said that "creating common goals for marketing success that are tied with the goals of other groups in the company" is a major challenge. Here, marketing operations can help by creating a goal framework that starts with corporate goals and cascades them into department and individual goals, and aligns goals across the organization with departments that have a stake in marketing's success, particularly the sales function.
Step 4 - Get Buy-in from Senior Executives
Without senior level buy in from the company's C-management, MO is not going to be successful. MO requires support and collaboration not only within marketing but with other departments to be effective.
Step 5 - Conduct Regular Performance Checks and Improve MO over Time
This ties back to the idea of continuous improvement that the Japanese perfected in manufacturing with Kaizen and other quality management systems. With regular reviews of actual performance against goals, marketing operations can quickly identify areas for improvement, opportunities for resource re-allocation, process changes, and further education. Dashboards, as the "glue" between strategy and execution, can provide leading and lagging indicators to correct issues and take action before they grow into bigger problems downstream.
What is your experience with marketing operations? Does your marketing organization have a dedicated MO function, and if so, what are your success stories?
Major shifts are taking place in B2B marketing that started a few years ago but have accelerated in recent months – in the marketplace as well as inside vendor organizations.
Prospects and customers are becoming more sophisticated and better informed than ever before. They are tuning out a lot of the marketing noise they receive which makes it harder for marketers to reach audiences the old fashioned way. Customers are are in the driver’s seat today. This has profound implications on marketing and the way companies engage with prospects.
In the “old days”, the mainstream marketing approach was to interrupt and engage prospects, educate them on the vendors offering and move them through the sale cycle towards a transaction – a very vendor and product centric approach. Contrast this with the sophisticated and networked and community-embedded buyer today, who conducts research and talks with their peers in online communities long before identifying and narrowing down the list of potential vendors that can solve the problem.
These buyers and decision makers don’t want to get interrupted by a product promo email or a cold call that likely doesn’t come at the exact time they have a specific problem the caller can help with. And today’s customers are busier than ever. They want to be able to engage with a vendor when they are ready and actively seek out advice, often very late in the buying cycle, and have the vendor guide them through a complex buying and problem solving process - outsourcing part of the buying process to the vendor community if you will.
A simple 5 step program can help you refocus your marketing efforts and adjust to the new requirements for B2B marketing success:
Step 1 – Understand Your Audience
Customer focus begins with understanding your customer and their market environment. What business problems do they face? What are the drivers in their industry that impact profitability? Also make sure you segment your target markets according to demographics, psychographics, and business environment to identify the segments that are the best fit for your company's offering; segments that have the most to gain by becoming your customers.
Step 2 – Build a Strong Value Proposition
Build a strong customer-centric value proposition that puts your product and services in the context of the customer's problem, communicates the value you provide and your differentiators vis-a-vis competing alternatives.
Step 3 – Map Out Buyer’s Journey
Map the customer's buying cycle from problem awareness, identifying generic solutions, identifying potential vendors, selecting vendors that make the short list, evaluating solutions in detail and ultimately selecting a solution. Build a simplified model of your customers’ world, the journey they take from problem to solution. This exercise will help you understand how your customers are progressing through the steps of the buying cycle. What are their goals, concerns, what data do they need to move to the next step, where do they look for information?
Step 4 – Build Compelling Messages and Content
With this information you get a pretty good idea for how to influence the prospect along every step, how to educate them, how to guide them to purchase. Build a simple matrix of messages, marketing collateral and sales tools mapped against each phase of the buying cycle. Also add how you want to get your information to your audience - how will they find you. Focus on social networks and Google and special interest sites for the early phases; that's where buyers will often look first and find your content to make sense of their problem and the solution space and identify potential vendors. Make sure your content is problem and solution focused and doesn’t only talk about your product.
Build call to actions into each content piece to encourage your prospect to keep engaging with you as they move through the buying cycle. Also, make content easily accessible, especially in the early phase of the buying cycle where prospects don't care about specific vendors but want to understand their options and the implications of available choices to solve a problem. So let your educational content (white papers, Webinars) go free so it gets consumed and shared by prospects across social networks, don't hide it behind registration forms, but add a strong call to action into the content asset to move your prospects to the next interaction with you.
Step 5 - Invest in Marketing Automation
One size fits all mass email blasts, for example, don’t provide the level of return you are looking for. Marketing automation will allow you to have very targeted digital conversations with your audience triggered by prospect profile and behavior, driven by their buying cycle. Help prospects follow paths that you have defined to guide them, offering content that matches every step of their buying process from white papers and webinars in the early discovery stages to case studies, ROI studies and competitive comparisons during vendor selection at which point your sales will be heavily engaged in the relationship. With each interaction, you collect more data about the prospect which allows you to build a score to identify the hottest leads that you want to engage with directly and focus your time and sales resources on. With sophisticated analytics and reporting, MA tools will also give you insight into what is working and what not so you can adjust and improve your campaigns.
Buyers expect vendors to help them make sense of the options they have available to solve a particular probldm, their pros and cons – a very consultative, solution, and customer centric approach to marketing and sales that is very different from yesterday’s paradigms. For marketing teams, this means engaging with prospects much earlier in the buying cycle, educating them long before prospects consider specific vendors, and matching each phase of the customer buying cycle with appropriate message, content and marketing tools designed to ease the buyers journey - from problem to solution and carefully steer them to the favorable outcome - to be selected by the buyer.
It also means using new ways to reach the buyer, including social networks. This approach requires much greater domain, industry and business expertise on the vendor side, to really understand the customer, which in turn requires more targeted segmentation, more intelligent messaging, better sales tools, etc. Time to get ready.