2009 B-to-B Demand Creation Trends
What a difference a year makes. At this time in 2007, most of us were sitting back and enjoying what was to be the tail end of the post-bubble growth spurt. In 2008, words such as recession, stagflation and depression have swirled wildly, causing b-to-b executives to pull out their swords and come hunting – as they have historically done when times get tough – for marketing dollars to cut. This time, however, many marketers – especially those tasked with demand creation – are defending their turf with metrics and models that starkly display the damage that will be done to the business if their budgets are slashed. While this is exceptionally encouraging, the battle certainly isn’t over. Here are five core demand creation trends for 2009 that should drive every field marketer’s strategic planning.
1. Arm for Resistance
Many b-to-b organizations have embraced the waterfall model – a systematic, five-stage model that establishes a common framework for tracking the health of an organization’s new business pipeline and the contribution of marketing to that pipeline. Those that have taken the steps to build these waterfalls have more than a platform to measure performance; they have a tool that helps them to pinpoint conversion changes at every stage, and root out why they’re occurring. While most prospective organizations continue to shop, the desire of many diminishes to commit to a buying cycle and make a purchase, realities that should be proactively attacked by b-to-b organizations. Historically, when business has turned down, marketers have fiddled around with messages, offers and creative, assuming the issues were external to their organization. While these factors certainly should be evaluated, marketers should also look internally at factors that may be causing a reduction in the ability of the sales force to take quality leads and bring them to opportunity and closure at historical rates.
2. Take a Hard Look at Targeting
No matter what economic conditions exist, b-to-b organizations that spread themselves too thinly across too many target markets are asking for trouble, be it from a marketing or sales perspective. In difficult times, shrinking budgets only exacerbate the issue, meaning this is the ideal time for organizations to re-evaluate their target marketing, and embrace a concept called “relative targeting.” By taking a list of potential targets, then creating and combining two sets of variables – one external, one internal – you can score and rank-order targets against one another in a dispassionate manner. External factors assess the relative viability of a target segment, including overall economic health, whether “forced” buying triggers exist and the overall priority placed on your product/service. Internal factors include your organization’s level of knowledge about the segment, message development and whether your sales force is trained and prepared to sell into the segment. By whittling the world of targeting possibility to the world of targeting probability, you will be able to focus your efforts – and your funds – on targets where you have the best chance to win.
3. Reduce Execution Variance
Some of the greatest marketing waste in b-to-b organizations comes from disparate business units and geographies reinventing the wheel every time they create a demand creation program; not following best practices in program execution; and committing too much spending to pet projects that are not aligned with the organization’s broader campaign strategy. When marketing executives prioritize actively rooting out this waste, they will not only be able to stretch the dollars they receive, but also maintain greater consistency and voice throughout their function and in turn other functions that will use their deliverables.
4. Become an “Eco-Marketer”
In the demand waterfalls of every single b-to-b organization, thousands of leads will fall out every year. Some have never been contacted; many others were disqualified, whether it was for a valid reason or not. What often makes the difference between those organizations that are average demand creators and those that are best in class is a set of plans for flagging these leads, reassigning them to either marketing or inside sales for further nurturing, and developing sets of nurturing strategies to treat these leads properly. As we move forward into 2009, the management of the waterfall must be guided by three key terms in order to squeeze every ounce of value out of the prospects that are in it: Renew, reuse and recycle.
5. Anticipate Changes in Sales
Down economies cause upheaval across organizations, with sales often the most frequently affected. Marketing’s growing partnership with sales over the past several years means these changes will trickle down more than ever before, certainly impacting results within the waterfall. As an example, consider the conversion rates from SAL to SQL, and SQL to close. As the economy softens, sales management often mandates that reps increase the amount of their pipeline from 3X to 4X expected revenue in order to maintain enough business to hit current targets. This may cause eager reps to begin including marketing sourced leads in their pipelines at higher rates, increasing the conversion from SAL to SQL. If reps are using these leads to stock their pipelines but don’t truly believe in their quality, conversion rates from SQL to close are likely to decrease. The net of this is that while marketing may have done nothing differently than they did the year prior, conversion rates changed anyway. As a result, marketing leadership must be aware of major changes in sales strategy as part of strategic planning, discuss the potential impacts on waterfall performance, communicate these impacts proactively and develop strategies to overcome them in the cases where they might drive lower conversion rates.
While no one can predict how far or deep any economic contraction might go, I have already seen a number of skittish b-to-b executives behaving more like the worst is coming. For those in field marketing, this fact is an opportunity as much as it is a challenge, an opportunity to become more disciplined, less wasteful and more vigilant about watching how they measure. Improving their planning and execution will set them up that much better for incremental gains once conditions inevitably turn once again.
