B-to-B Marketers Still Struggle With Lead Nurturing

I thought it was widely understood by now that staying in touch with a prospect who has shown some interest in your product or service can triple, even quadruple, lead-to-sales conversion rates. But a new study from Bizo and Oracle Marketing Cloud suggests that business marketers are still struggling to get the most value from lead nurturing programs. Disappointing, since the value of lead nurturing was clearly demonstrated years ago…

I thought it was widely understood by now that staying in touch with a prospect who has shown some interest in your product or service can triple, even quadruple, lead-to-sales conversion rates. But a new study from Bizo and Oracle Marketing Cloud suggests that business marketers are still struggling to get the most value from lead nurturing programs. Disappointing, since the value of lead nurturing was clearly demonstrated years ago, when James Obermayer coined the Rule of 45, which says 45 percent of business inquirers will eventually buy in that category, so if you don’t stay in touch, you’ll likely lose the sale to your competition.

The Bizo study reveals some intriguing issues for marketers today. I was struck by the mere 35 percent of responders who say nurturing is essential to their businesses. The majority (53 percent) said “It’s somewhat important; we have a few nurturing campaigns running.” Granted, these words were put in their mouths by Bizo researchers, but it’s troubling that the power of lead nurturing still seems to be under appreciated.

Further, marketers seem to be using little other than email as their nurturing medium. This is a mistake. Worse, these emails are simply not getting through: Nurturing email open rates are less than 20 percent, according to most (79 percent) of the 500 marketers surveyed.

So let me offer some success factors in lead nurturing, which I hope will help marketers up their nurturing game:

  • Set up a triggered sequence of nurturing messages, using a variety of media channels, with the objective of keeping in touch with inquirers until they meet your qualification criteria and are ready to be handed to your sales team. See the chart in the media player at right for an example. The point here is that a nurture program needs to be continuous, steady and responsive.
  • Tailor the nurturing stream to key variables in the prospect’s profile, like buying role, job description, industry and company size.
  • The tone of the messaging needs to be informative and helpful, instead of sales-y. Your objective is to deepen the relationship and move prospects along the buying journey, not hit them over the head.
  • Use a wide variety of media and messaging types to keep the recipient interested. Adding to the mix options like an event invitation, press release, tweets, infographic, podcast, a survey or questionnaire, video, a newsletter—the possibilities go on. Bizo itself is offering a retargeting program that permits cookie-based nurturing of prospects whose email has not yet been collected.
  • Get creative, for example, with a peer-to-peer letter from a counterpart executive in your company, or a birthday card.
  • Ask for a response to collect additional information and feedback, always moving toward that qualification stage. Create dedicated landing pages, where you can pose profiling questions and continue the educational content.

It’s all about staying in touch with prospects to deepen the relationship and increase the chance of converting them to customers.

A version of this article appeared in Biznology, the digital marketing blog.

New Developments in B-to-B Loyalty Marketing

Business marketers have much to gain from retention marketing. Business customers tend to be fewer and more valuable—meaning you can’t afford to lose even one. But how do you keep your customers active and buying from you, versus the competition?  How do you prevent defection? Let’s look at the traditional approaches to retention marketing in B-to-B, plus some new developments in loyalty marketing being adopted by B-to-B marketers today, including social media and gamification.

Business marketers have much to gain from retention marketing. Business customers tend to be fewer and more valuable—meaning you can’t afford to lose even one. But how do you keep your customers active and buying from you, versus the competition? How do you prevent defection? Let’s look at the traditional approaches to retention marketing in B-to-B, plus some new developments in loyalty marketing being adopted by B-to-B marketers today, including social media and gamification.

Traditional Approaches in B-to-B Retention Marketing
Given the importance of customer retention in B-to-B, business marketers have a long history of investing in loyalty drivers. The most basic approach has been—simply—superb account management.

In a well-run company, the sales team in charge of any given customer will do its best to understand what’s going on in the account; sell to them the way they want to buy; deliver on time; develop new products to serve their evolving needs; solve any customer service problems; cultivate deep relationships with the specifiers, influencers and decision-makers throughout the account; and generally provide the best possible products and service levels. It is this basic approach that has stood the test of time in account development.

But as buying has become more complex, businesses have developed additional strategies to deepen customer relationships and engender loyalty. For example:

  • Data-driven segmentation and differentiated treatment. Not all customers are created equal, so segmenting customers by value and treating them differently is a strategy that works well in business markets. Some companies will identify their top accounts—based on margin or on top-line revenue—and provide them with special perks, pricing and service levels, such as:
    • Corporate-wide purchasing agreements, where all buying across a far-flung enterprise can benefit from pre-negotiated contract pricing.
    • Dedicated sales teams, some of them even housed on site at the customer’s operation.
    • Dedicated customer service phone lines, where the service personnel can develop an ongoing personal relationship with individuals in the account.
    • Special status, like Gold Customer or Preferred Customer, programs that may include access to discounts, free shipping, invitations to events and other perquisites.
  • Incentive programs. Taking a page from the consumer world, some business marketers have found success with frequency marketing programs that reward customers for certain behaviors, such as repeat purchase. These programs are not universally applicable in business, but they have their place, particularly when the purchase cycle is short and purchase behavior can be tracked.
    Rewards programs are typically applied in businesses that mimic consumer purchasing behavior, like office supplies. Staples, for example, runs a thriving business rewards program targeted to its small-medium business customers. Financial services and telecom have also done well with frequency marketing programs in SMB, examples being American Express OPEN, the MasterCard Business Bonus program and Verizon’s BusinessLink.

New Developments in Loyalty for Business Markets
In the last few years, B-to-B loyalty marketing has benefited from the arrival of new tools that support the goal of deepening relationships with business buyers. Social media, for example, has created an easy, low-cost way for companies to build communities and foster engagement. Social media is being applied across the B-to-B marketing spectrum, from prospecting via viral pass-along, to enhancing customer relationships, to surfacing and solving customer service problems.

In the area of enhancing customer relationships and fostering loyalty, the power of social media is being felt throughout the B-to-B marketing world:

  • Companies build the ranks of their followers on Twitter and LinkedIn, their “likes” on Facebook, and their RSS subscribers to blogs and YouTube channels. These connections then become another set of media channels for staying in touch, introducing new products, sharing ideas and case studies, and otherwise building an ongoing relationship.
  • Within social media environments, companies establish communities of customers and prospects around certain subjects, like technologies, products, events and other shared interests. In these forums, chat groups, blogs and other formats, like-minded people share ideas, expand their knowledge and make valuable connections.

One of the most exciting new developments in B-to-B loyalty marketing is the new concept known as gamification. The idea here is to build on people’s natural enthusiasm for games involving prizes, competition and recognition, and turn that motivation into a loyalty driver. The goal of gamification is to add gaming elements to otherwise boring processes and tasks, converting them into something fun, competitive and addictively engaging.

Marketers who want to introduce game design and mechanics to their loyalty programs can now take advantage of several new software platforms, like Badgeville, CallidusCloud and Bunchball. These tools are taking loyalty programs to a new level of interactivity, real-time feedback and social interaction, with some promising early results.

If you’ve experimented with loyalty programs in B-to-B, please share your experiences.

A version of this post appeared in Biznology, the digital marketing blog.

B-to-B: Where Social Media Meets Direct Marketing

Business marketers have embraced social media with enthusiasm. One of the reasons social media is working so well in B-to-B, in my opinion, is that business marketers tend to wear their direct marketing hats when they strategize and plan how to apply social media to their marketing objectives. So they get a lot of measurable value from social media, and they pull it into their programs as a full-fledged member of the integrated marketing mix. In B-to-B, social media and direct marketing have-in other words-met, hit it off, and developed a long-term relationship.

Business marketers have embraced social media with enthusiasm. One of the reasons social media is working so well in B-to-B, in my opinion, is that business marketers tend to wear their direct marketing hats when they strategize and plan how to apply social media to their marketing objectives. So they get a lot of measurable value from social media, and they pull it into their programs as a full-fledged member of the integrated marketing mix. In B-to-B, social media and direct marketing have-in other words-met, hit it off, and developed a long-term relationship.

To back up and support my argument, let me offer a working definition for direct marketing: Direct marketing describes communications that are structured to motivate a response. Direct marketing communications are characterized by:

  1. Being delivered to a carefully targeted audience;
  2. Containing a motivational offer, a call to action and a response vehicle;
  3. Collecting the responses in a database;
  4. Expecting the results to deliver a measurable ROI.

By this definition, a direct marketing message can be delivered anywhere. It is truly “media neutral.” It can work in direct mail and email, but also in print, on billboards, on television and radio. And in social media.

In fact, social media represent an ideal direct marketing medium. When social media first arrived on the scene, they were widely viewed by marketers as a way to “get the word out” (which means awareness) and bring traffic to a website.

But increasingly, marketers are getting much more “DM-y” about social media. In this year’s Social Media Marketing Industry Report, 58 percent of marketers said they were using it to generate leads. Last year, in 2011, only 7 percent said that. A big change. Small businesses were even more likely, at 65 percent, to focus on lead generation in social media.

As marketers increasingly view social media as direct marketing media, the media owners themselves are responding, fast. Just last August, Facebook announced that it would improve the targeting options available to advertisers, including for the first time targeting variables like email address and phone number, which direct marketers have used for years. Before this, advertisers were limited to demographic selects like company size.

Also in August, Twitter announced that it will offer ad targeting by user interests or @username follower groups. This kind of targeting has been a staple of direct marketing media for decades. So I am concluding that these social media are moving in a direct marketing direction, recognizing that this way they can attract advertisers who are looking for measurable results, like a specific number of leads and a certain allowable cost per lead.

One other piece of evidence to support my case that B-to-B social media are intersecting with direct marketing, albeit a semi-humorous point: I was doing a seminar out at Facebook in Palo Alto a while back, training their ad sales marketing team on B-to-B direct marketing. While there, I learned that Facebook itself is a sizable user of direct mail, the long-time workhorse medium of direct marketing. The Facebook ad sales group uses direct mail to sell advertising to small and medium businesses. So here’s a social medium using a traditional direct marketing medium to reach their B-to-B goals. The intersection comes full circle.

What ways are you seeing social media intersect with direct marketing?

A version of this post appeared in Biznology, the digital marketing blog.

Prospecting to IT Buyers: How Nine Data Vendors Stack Up

Buyers of information technology (IT) are one of the most valued audiences targeted by business marketers. Globally, these professionals spend $3.6 trillion on hardware, software and technology services. My colleague Bernice Grossman and I recently investigated the availability of prospecting data available to tech marketers for reaching this desirable group, and we found some surprises.

Buyers of information technology (IT) are one of the most valued audiences targeted by business marketers. Globally, these professionals spend $3.6 trillion on hardware, software and technology services. My colleague Bernice Grossman and I recently investigated the availability of prospecting data available to tech marketers for reaching this desirable group, and we found some surprises.

We asked twenty companies who supply prospecting data to business marketers to share with us statistics about the quantity and quality of the data they have on IT buyers in the U.S. Nine vendors graciously participated in our study-specifically, Data.com, D&B, Harte-Hanks, Infogroup, Mardev-DM2, NetProspex, Stirista, Worldata and ZoomInfo. Our thanks to them for letting us poke around under their hoods.

We asked each participating vendor to report to us on the number of companies on their databases in ten industries, by SIC code. We also asked for the numbers of contacts with IT titles in a sampling of twenty firms in those SICs, ten large enterprises and ten small businesses. Finally, we sent them the names and addresses of ten actual IT professionals (people whom Bernice and I happen to know, and were able to persuade to let us submit their names), and we asked the vendors to share with us the exact record they have on those individuals. The results of our study can be downloaded here.

This is the same methodology we have used in past studies on prospecting data available to business marketers—although this was the first study we have done on a particular industry vertical. Our objective is, first, to get at the question of coverage, meaning, the extent to which a business marketer can gain access to all the companies and contacts in the target market. And second, we want to show marketers the level of accuracy in the data available for prospecting-for example, is Joe Schmoe still the CIO at Acme Widgets, and can I get his correct phone number and email address?

The answers to these questions, in general, was YES. The data reported was surprisingly accurate, especially given how much business marketers complain about the data they get from vendors. And the coverage was wide, meaning there seem to be plenty of IT names in a variety of industries for us to contact.

But the data also revealed some interesting trends in business marketing in general and tech marketing in specific.

  • Prospecting data is being sold these days out of massive databases, which makes it far easier for marketers to select exactly the targets they want, by such criteria as title, company size and industry, irrespective of whether a “compiled” or a “response” name.
  • Company counts by SIC varied widely among the vendors, reminding us that data providers may have their own proprietary systems for flagging a company by industry code.
  • Job titles are getting fuzzier than ever. We found real IT professionals using titles such as Platform Manager and Reporting Manager-which makes it tough to know what they really do.

Given these developments, we urge our fellow marketers to probe carefully on data sourcing and categorizing practices, and to specify in great detail exactly what targets you’re going after, when buying data for new customer acquisition. And we suggest that you source from multiple vendors, in order to expand your market coverage potential. Happy prospecting to all.