The rules of B2B marketing are constantly changing. What worked yesterday won't necessarily work today or tomorrow. This blog presents information, opinion, and speculation about where BtoB marketing is headed.
Demand Gen Report recently published the findings of its eighth annual B2B Buyers Survey. The 2019 survey received responses from more than 250 B2B executives representing a variety of industry verticals. Fifty-four percent of the respondents said they predominantly made software/technology purchases. Another 19% said they primarily purchase IT hardware. So about three-fourths (73%) of the respondents were involved in purchasing some type of technology. Virtually all of the respondents were manager-level or above.
The 2019 research shows a continuation of trends that appeared in earlier editions of the buyers survey. For example, a majority of survey respondents have been reporting that the length of their buying cycle is increasing for at least the past four years, as the following table shows:
Demand Gen Report presented the survey panels with several statements describing various aspects of their purchasing process. The following table shows the percentages of respondents in the 2019 and 2018 surveys who said they strongly agreed with five of these statements:
The 2019 survey indicates that a growing number of buyers have become more willing to engage with vendor reps early in their buying process. For example:
42% of the respondents said they spoke to and engaged with vendor reps in the first month of their buying process (up from 33% in the 2018 edition of the survey).
33% said they accepted outreach from prospective vendors for calls and demos in the first month (up from 23% in 2018).
25% said they asked for RFx's, competitive bids, or pricing information in the first month (up from 20% in 2018).
Demand Gen Report also asked survey participants about several factors that distinguished winning vendors from others. The following table shows the percentages of respondents in the 2019 survey who rated six characteristics of winning vendors as very important:
The 2019 B2B Buyers Survey provides important insights regarding the attitudes and behaviors of business buyers, but it's important to recognize that this research doesn't really cover the entire spectrum of B2B buying. The first sentence of the survey report makes this clear when it says: "Over the course of eight years, Demand Gen Report's annual B2B Buyers Survey has spotlighted the ever-changing needs and expectations of the different stakeholders in complex purchasing decisions." (Emphasis added)
The Demand Gen Report survey, like most of the published research about B2B demand generation, deals with "high consideration" purchases that feature large buying groups, complex decision-making processes, and long buying cycles. But high consideration purchases have never represented all B2B buying.
Many B2B purchases are fairly routine, where the buying decision is made quickly by a small group of people, or even a single individual. In a 2018 survey of 114 "industrial buyers" by Thomas, over half (56%) of the respondents said they make buying decisions in less than one month.
While not much recent data is available, it's likely that more routine purchases account for a significant part of total B2B buying. In a landmark study of more than 3,000 B2B buyers conducted in 2009 by Enquiro, survey respondents estimated that 50% of their budget was spent on "Repeat" purchases - low-risk purchases that are made frequently and involve familiar products or services.
The reality is, most B2B companies derive revenue from multiple types of buying scenarios, and these scenarios will differ in significant ways. Understanding how these scenarios differ and what causes the differences is important because they call for different marketing and sales strategies. I'll provide a framework for analyzing buying situations in a future post.
Last month, McKinsey & Company published an article that discussed the evolving role of marketing - particularly the role of the CMO - in driving business growth. Marketing's moment is now: The C-suite partnership to deliver on growth was based in part on a 2019 study that included interviews with 60 C-level executives and quantitative surveys with another 200.
In the McKinsey study, 83% of global CEOs said that marketing can be a major driver of business growth. However, 23% of the CEOs do not believe that their marketing organization is delivering on the growth agenda. Other C-level executives are even more skeptical. For example, only half of the CFOs surveyed by McKinsey said that marketing delivers on the promise of driving growth.
The central theme of the article is that "a marketing organization's ability to drive growth depends heavily on the strength of the partnerships the CMO can forge across the organization."
Three CMO Archetypes The authors of the article contend that CMOs fall into one of three categories.
Unifiers - Unifier CMOs are very good at developing cross-functional partnerships with other C-level executives. They speak the language of their C-suite peers and possess a results-oriented mindset. Unifier CMOs often play an important role in developing the company's strategy. McKinsey estimates that about 24% of CMOs are Unifiers.
Loners - Loner CMOs are often capable marketers, but they don't typically have close relationships with their C-suite peers. These CMOs usually focus on tactical marketing activities, and they aren't likely to be involved in designing the company's business strategy. McKinsey estimates that about 27% of CMOs are Loners.
Friends - According to McKinsey, about half (49%) of CMOs are Friends, and these CMOs fall somewhere between Unifiers and Loners. A Friend CMO may have a solid relationship with the CEO and may be responsible for driving growth through normal marketing channels and tactics, but they usually haven't extended their sphere of influence across the organization.
According to McKinsey's analysis, high-growth companies are seven times more likely to have a Unifier CMO than a Loner.
Where Unifier CMOs Excel The McKinsey consultants wrote that Unifier CMOs excel in four areas that enable them to effectively drive growth:
They ensure that the CEO fully understands how marketing is driving growth and contributing to the company's overall goals and objectives, and they leverage the CEO's support to extend marketing's influence over growth-related activities across the entire organization.
They win support from the CFO by using metrics and analytics to quantitatively demonstrate how marketing impacts growth and business value.
They work collaboratively with the CIO or CTO to leverage data to better understand customers, personalize interactions, and predict customer behavior.
They work with the head of human resources to ensure that marketing can acquire, develop, and retain the human talent that is necessary to support marketing's growth responsibilities.
The McKinsey article embodies a theme that I've seen discussed with increasing frequency over the past couple of years. A growing number of marketers and other business leaders are recognizing that no one department or business function can single-handedly deliver great end-to-end customer experiences or drive maximum business growth.
Both great end-to-end customer experiences and maximum growth require the efforts of multiple business functions across the organization that are aligned around a common business strategy and are working in a collaborative and coordinated way. McKinsey says that the CMO should be primarily responsible for driving business growth, and this view has also been advanced by Deloitte and Forrester.
But there are alternative approaches to managing growth. Over the past few years, many companies (mostly B2C firms) have appointed chief growth officers to lead and coordinate growth efforts. In 2017, Culture App, an employee engagement and analytics software firm, reported that 455 U.S. companies have chief growth officers. That number is almost certainly higher now.
Meanwhile, many B2B companies - particularly technology start-ups and those operating in the SaaS software space - have been appointing chief revenue officers who are tasked with managing the company's revenue-related business functions including marketing, sales/business development, direct outside sales, channel management, and customer success/ customer support.
I suspect that we will continue to see all of these approaches used as CEOs try to identify the best way to drive and manage growth.
Image courtesy of ccpixs.com (Creative Commons License).
In my last post, I discussed some of the findings from a recent study by The Harris Poll and RedPoint Global. Addressing The Gaps In Customer Experience was based on the results of two surveys. One involved 454 senior marketing and customer experience executives, and the second involved 3,002 adult consumers. The participants in both surveys resided in the United States, Canada, or the United Kingdom.
As the title of the research report suggests, the primary objective of this study was to identify where and how the perceptions of marketers and consumers about the quality of customer experiences differ. I discussed some of those findings in my earlier post.
This research also provides several interesting insights about how marketers view the technologies they use to deliver customer experiences. Somewhat surprisingly, the marketers in this study view technology as essential for providing great customer experiences and as a source of major challenges.
The Strategy-Execution Gap First, it's important to put the findings about technology in the right context. Most of the marketers in this study were satisfied with their customer experience strategy, but not with its execution. More than half (57%) of the surveyed marketers said their company has the right customer experience strategy, but isn't able to execute it effectively. An even higher percentage (63%) said their company doesn't execute its customer experience strategy "very well."
When the survey participants were asked about the challenges associated with closing the strategy-execution gap, the top three challenges identified were:
The complexity of technology solutions (39% of respondents)
Lack of cross-functional commitment to strategy (35%)
The inability to integrate new capabilities with existing processes or technology (33%)
Satisfaction With Technology
On average, the marketers in the study said their company is currently using 10 customer engagement technology systems. About one in five of the survey respondents said their company is using more than 20 customer engagement systems.
The sheer number of technology systems is creating a challenge for marketers. Nearly two-thirds (65%) of the marketers in this study said the number of customer engagement systems they are using makes it harder for them to provide a seamless customer experience.
Only about a third (more or less) of the surveyed marketers were very satisfied with their ability to leverage technology to achieve several key customer experience objectives, as the following table shows:
Despite the challenges associated with CX-related technologies, marketing leaders are committed to a technology-enabled future. More than nine in ten (91%) of the marketers in this study said that investing in marketing and CX technologies is a key initiative for their company.
Twenty-one percent of the surveyed marketers said they expect the number of customer engagement systems used by their company will increase over the next year, and even more (39%) think the number will increase over the next five years.
These findings make the point that marketers and other CX professionals have more work to do to capture the full benefits of marketing and other customer engagement technologies. But these technologies are evolving rapidly, so it shouldn't be surprising that marketers and other CX professionals are still learning how to maximize their value. In my view, this is to be expected, and it's not a business-threatening problem unless the "proficiency gap" becomes too great.
Senior company leaders in virtually all types of businesses now recognize that providing great customer experiences is a critical source of competitive advantage and a primary driver of business performance. As a result, customer experience (CX) management has become a top strategic priority in many enterprises.
Given this interest, it shouldn't be surprising that CX has been the subject of numerous research studies over the past several years. One of the best studies I've seen recently was published earlier this year by The Harris Poll and RedPoint Global.
Addressing The Gaps In Customer Experiencewas based on two surveys that were fielded in early 2019. One was a survey of 454 senior marketing executives residing in the United States, Canada, or the United Kingdom. This survey also included technology and customer experience executives, but I'll refer to the participants in this post as "marketers" or "marketing leaders."
All of the surveyed marketers were affiliated with companies having a minimum of $500 million in annual revenue. (Note: The annual revenue minimum was $200 million for companies that derive more than 50% of their revenue from direct sales to end users.
The second survey involved 3,002 consumers (18+ years of age) residing in the United States, Canada, or the United Kingdom. Figures for age, gender, education, region, and employment status were weighted where necessary to bring them into line with their actual proportion in the population.
This type of study is particularly instructive and useful because it enables us to compare and contrast the perspectives of marketing leaders and consumers, and this is very valuable when the topic is customer experience. As the title of the research report suggests, these surveys found several significant gaps between marketers and consumers regarding customer experience performance.
The Performance Gap The "headline" finding from this research was that marketers rate the quality of their customer experience capabilities significantly higher than consumers. Ninety-two percent of the marketers said their ability to provide an exceptional customer experience is excellent or good. But when the consumers were asked to think about the companies they interact with on a regular basis, only 80% rated these companies as excellent or good at providing great customer experiences.
The contrast is even greater if we look only at the "excellent" rating. Thirty-four percent of the marketing leaders gave themselves an excellent rating, but only 18% of consumers gave that highest rating.
This research used a "Customer Experience Index Score" to evaluate CX performance across four dimensions - privacy, personalization, customer understanding, and omnichannel/consistency. Not surprisingly, marketers gave themselves higher scores on all four dimensions than consumers.
Personalization and Privacy are Paramount The findings of this study also provide compelling evidence that both personalization and privacy are of paramount importance when it comes to customer experience. In the consumer survey, 63% of the respondents said that personalization is now part of the standard service they expect, and over half (53%) said they expect a company to know their buying habits and preferences and be able to anticipate their needs.
Customer expectations for personalization have risen to the point that 37% of the consumers said they would stop doing business with a company that doesn't offer a personalized experience. And while 36% of the survey respondents said that companies are presenting them with more personalized offers and messages compared to a year ago, 73% said that companies are still struggling to meet their expectations for personalized experiences.
Consumers in this study also made it abundantly clear that privacy is a primary concern. In fact, they ranked privacy as the most important dimension of customer experience, and 41% of the survey respondents said they would absolutely stop doing business with a company that sells their data to other companies for marketing or advertising purposes without their permission.
The consumer survey also asked participants about the importance of four privacy-related actions that companies can take. The following table shows the percentages of respondents who rated each action as very important or absolutely essential:
The Harris Poll/RedPoint Global research also has several important things to say about the role of technology in providing great customer experiences. I'll discuss those findings in a future post.
There is no longer any doubt that marketers overwhelmingly believe in the value of personalization. Most marketing leaders now view personalization as essential to marketing success, and providing personalized messages and customer experiences has become a top priority in many companies.
Numerous research studies have confirmed that large majorities of marketers believe personalization improves marketing and business performance. For example, in the 2019 Trends in Personalization survey by Researchscape International, 70% of surveyed marketers said personalization has a strong or extremely strong impact on advancing customer relationships.
Recent research also shows, however, that marketers have more work to do to realize the full potential of personalization. In the Researchscape International survey, only 16% of survey respondents said they are very or extremely satisfied with the level of personalization in their marketing efforts. Fully half of the respondents said they are not satisfied or only slightly satisfied.
To maximize the impact and effectiveness of personalization, marketers need to use the right level of personalization for each customer interaction. Most marketing pundits and many marketing leaders seem to believe that the key to maximizing the benefits of personalized marketing is more personalization. According to this view, the right strategy is to leverage every bit of available data about customers and prospects to make personalization more specific, and to use personalization more frequently, in more channels, and for more types of communications and experiences.
But as I recently argued, the problem with the "more personalization" approach is that it largely ignores the real and growing privacy concerns of both consumers and business buyers. The real key to maximizing the effectiveness of personalization is to use an appropriate level of personalization for each interaction with a customer or prospect. And in some situations, the best strategy will be less, not more, personalization.
The Corporate Visions Research Recent research by Corporate Visions provides compelling evidence that less can in fact be more when it comes to personalization. This study consisted of a live field trial that involved nearly 7,000 potential buyers in the Corporate Visions prospect database. All of the prospects in the trial met two criteria:
Each was a cold prospect - someone who had had no prior interaction with Corporate Visions
Each fit the Corporate Visions ideal client profile (industry vertical, company size, and job title).
The objective of this study was to test the effectiveness of four methods or levels of personalization:
Industry + personal
Company + personal
For the trial, Corporate Visions used emails that had identical offers and calls-to-action, but different subject lines and openings based on the method of personalization used. (Note: The research report includes examples of the emails.)
The trial used three metrics to evaluate the effectiveness of each level of personalization - open rates, click-through rates, and number of meetings scheduled. The following table summarizes the results of the field trial.
As the table shows, the emails that used company + personal personalization (the highest level of personalization) produced the highest open rates, while those using industry only personalization (the lowest level of personalization) produced the lowest open rates. But the positions were exactly reversed with click-through rates. The emails that used industry only personalization produced the highest click-through rates, while those using company + personal personalization produced the lowest.
In terms of meetings, the emails that embodied either industry + personal or industry only personalization produced significantly more scheduled meetings than those using either company + personal or company only personalization.
So the results of this trial indicate that when reaching out to cold prospects, messages that embody less personalization actually produce better conversion rates than messages using higher levels of personalization.
Explaining the Differences
The Corporate Visions research did not attempt to explain why the different methods or levels of personalization produced different results. However, in the research report, Leslie Talbot, Corporate Visions' Vice President of Customer and Commercial Excellence, offered a possible explanation:
"Human beings are self-centered enough to respond readily to something that looks like it's personal to us. But when we discover the underlying gimmick - that is, someone plucked a random fact from our LinkedIn profile and used it to suck us in - the letdown factor is enough to preclude further action.
Similarly, when you try to ingratiate yourself to someone by referencing an issue specific to their company, they already know you don't work there - you've just read publicly available content . . .
On the other hand, if you offer an insight about a prospect's industry, you activate their voyeurism . . . So when you share a story about how a similar company struggled and solved a common industry concern, they're better able to project themselves into the story and eager to find out what happened next."
I believe that Ms. Talbot's speculation is fairly accurate. To be effective, personalization must be based on genuine insights. When you take personalization beyond such insights, it become inauthentic, and customers or prospects will tend to view it as presumptuous.
Marketers have made noteworthy progress in managing content strategically, but still have work to do to match content with the right audience segments and customer expectations, and to fully leverage content management technologies. That is the major theme of the third annual content management survey published recently by the Content Marketing Institute. The objective of this research was to assess how marketers are using technology to help create, manage, deliver, and scale marketing content, and how they are using content to better engage audiences across the customer journey.
The 2019 Content Management & Strategy Survey produced 250 usable surveys, so this was a relatively small study. For comparison purposes, the 2019 edition of CMI's annual content marketing survey produced 1,947 responses. Eighty-three percent of the respondents in the content management survey were affiliated with B2B or hybrid B2B/B2C companies, and 79% were with companies located in North America.
For this research, CMI provided survey participants with two important definitions:
Strategic approach to managing content - "an approach that involves setting up processes, people, and technology to better scale and deliver content with the intent to improve the overall customer experience."
Content management strategy - "a strategy that addresses issues such as how your organization plans, develops, organizes, distributes, manages, and governs content."
CMI found that marketers are making substantial progress in managing content strategically. Three-fourths (76%) of the respondents in the 2019 survey said their organization takes a strategic approach to managing content, and 59% said their company has a documented content management strategy. In the 2018 edition of the survey, only 43% of the respondents said their organization had a documented strategy "for managing content as a business asset."
CMI also found that many companies are now doing several of the basic things required to manage content effectively. Sixty-seven percent of the respondents said they have an inventory of their content assets, and 66% said they have performed a content audit (an evaluation of their existing content). In addition, 56% of the respondents said they have performed a content gap analysis (an analysis of areas where additional content is needed), and 55% said they have conducted research to better understand their audience.
The CMI research also reveals that marketers are becoming more confident about the success of their content management efforts. The following table shows how respondents in the 2019 survey and the 2018 version of the survey rated their overall success at strategically managing content:
As the table shows, the percentage of respondents rating their efforts as extremely or very successful grew from 12% in 2018 to 26% in 2019, and the percentage saying they are moderately successful increased from 44% in 2018 to 54% in 2019.
More Work To Do
While the broad findings in CMI's 2019 study are generally positive, some specific findings are more mixed and show where companies have more work to do. For example, more than half of the survey respondents said they are extremely or very confident in their ability to select the right overall topic for a content asset and identify the key themes or messages to emphasize in a content asset.
At the same time, however, the top three challenges identified by survey respondents were determining which audience segments to prioritize (71% of respondents), knowing what is most important to their audience (61% of respondents), and knowing the goal of the audience at each stage of the customer journey (50% of respondents).
These somewhat inconsistent findings indicate that marketers need to conduct more research to gain a solid understanding of market and audience dynamics. As noted earlier, only 55% of the survey respondents said they have performed research to better understand their audience, and this finding underscores the need for more research.
SiriusDecisions recently published an e-book that describes some of the major findings from its 2019 State of Account-Based Marketing Study. The 2019 study involved 120 "ABM leaders" drawn from several industries. Forty-two percent of the study respondents had been running "full" ABM programs for more than a year, while 58% were still running pilot programs.
The SiriusDecisions study provides several useful insights about real-world ABM strategies and practices. I found three of the study findings to be particularly interesting, and here are the "headline" versions of those findings:
"Named-account ABM" was the most popular model of ABM used by participants in the 2019 study.
The average budget for ABM pilot programs was about $200,000 (excluding personnel costs), while the average budget for mature ABM programs was about $620.000.
Study participants identified executive briefings, in-person sales interactions, company-hosted events, and industry events as the most widely-used and effective delivery mechanisms for ABM content.
Let's look a little closer at these findings.
Varieties of ABM
SiriusDecisions recognizes three types of ABM:
Large-account ABM - "A very small number of large existing or targeted accounts"
Named-account ABM - "A moderate or larger number of defined existing or targeted accounts"
Industry/segment ABM - "A moderate or larger number of new or existing accounts in the same vertical or other specific segment"
The most popular variety of ABM used by participants in the 2019 study was named-account ABM (60% of participants). Fifty-six percent of the study participants said they are using industry/segment ABM, and 54% reported using large-account ABM.
These results closely resemble the findings of the 2018 ABM Benchmark Study by ITSMA and the ABM Leadership Alliance (the "ITSMA study"). ITSMA also recognizes three forms of ABM, and although the ITSMA model doesn't match up exactly with the SiriusDecisions framework, it is similar.
In the ITSMA study, 60% of the participants reported using one-to-few ABM, which is similar to named-account and industry/segment ABM in the SiriusDecisions framework. Fifty-six percent of the participants said they were using one-to-one ABM, which is virtually identical to large-account ABM in the SiriusDecisions model.
The SiriusDecisions e-book states that many companies are using more than one type of ABM, and the ITSMA study confirms that many businesses are using a blended ABM strategy. Forty-six percent of the participants in the ITSMA study reported using more than one variety of ABM.
Successful ABM Requires a Significant Investment
Both the SiriusDecisions study and the ITSMA study found that successful ABM programs require a substantial financial commitment. As noted earlier, the SiriusDecisions study found that the average annual budget for mature ABM programs is about $620,000.
The ITSMA study reported similar levels of financial investment, although it used a somewhat different approach.
One-to-one ABM - The median number of accounts in the program was 14, and the average spend per account was $36,000, which results in a total average program investment of $504,000.
One-to-few ABM - The median number of accounts in the program was 80 (4 clusters of 20), and the average spend per account as $2,750 ($55,000 per cluster), which results in a total average program investment of $220,000.
It's important to keep in mind that these budgetary numbers are averages. As SiriusDecisions wrote in the e-book, "ABM budgets vary widely depending on organization size, from small organizations running ABM pilots on less than $100,000 . . . to multibillion-dollar enterprises with ABM budgets up to several million dollars."
The Human Touch Matters in ABM
One of the most interesting findings in the SiriusDecisions study relates to the importance of the human touch in successful ABM. SiriusDecisions asked study participants what types of content they are using with ABM accounts, how that content is delivered, and how effective each type of content and each method of delivery is.
Study respondents identified four content delivery mechanisms that are above average in both usage and effectiveness. All four of these mechanisms - executive briefings, in-person sales interactions, company-hosted events, and industry events - are human-based mechanisms.
This finding shouldn't be surprising. Despite all of the advances in communication technologies, human-to-human interactions still provide the best way to achieve rich communication and understanding. At its core, ABM is a marketing strategy that focuses primarily on a relatively small number of high-value customers and prospects. So it's understandable that ABM leaders rely on human-to-human interactions and believe they are highly effective.
(The following is a post I published about two years ago. Since then, the number of people in the average B2B buying group has increased, and buying cycles are getting longer. New research by the Aberdeen Group explains why long buying cycles are still a fact of life for B2B marketing and sales professionals.) The Original Post New research reveals what influences B2B buying decisions and explains why the B2B buying process is getting longer.
Earlier this month, Demand Gen Report published the findings of the 2017 B2B Buyer's Survey. The 2017 research was based on a survey of 283 C-level executives, VPs, and Directors across several B2B industries. Each respondent in this study was qualified to have been involved in a B2B purchase decision within the 12 months preceding the survey.
The 2017 survey findings reveal that B2B buyers' journeys are becoming longer and more complex. Fifty-eight percent of respondents said that the length of their purchase cycle had increased compared to a year earlier, while only 10% said that the length had decreased.
Other findings explain why the buying cycle has gotten longer.
52% of respondents said the number of buying group members had increased significantly.
77% agreed that they conduct a more detailed ROI analysis before making a purchase decision.
78% agreed that they "spend more time researching purchases."
75% agreed that they "use more sources to research and evaluate purchases."
The 2017 study also found that content continues to play a vital role in B2B buying decisions. When surveyed buyers were asked why they selected the winning vendor over others, 75% said that the winning vendor's content had a significant impact on their choice, and 89% said that the winning vendor "provided content that made it easier to show ROI and/or build a business case for the purchase."
The Demand Gen survey also asked participants to rate how important eleven factors became once they were at the point of evaluating a set list of possible vendors. The table below shows the percentage of respondents who rated each factor as very important.
Research regarding the attitudes and behaviors of business buyers can be extremely valuable to B2B marketing and sales professionals. However, it's always important to examine the details of any research study and ask how applicable the findings are to your business.
For example, the respondents to the Demand Gen survey represented a variety of industries and a mix of company sizes. However, more than half (53%) of the purchase decisions those respondents participated in involved computer software, and another 16% involved IT hardware. So, this study is particularly relevant for companies that sell software solutions and other technology products, but some of the specific findings may be less relevant if your company sells other types of products or services.
Update Recent research by the Aberdeen Group (conducted in collaboration with PJA Advertising & Marketing) shows that business buyers are still struggling with buying decisions, and it provides several insights regarding how B2B marketing and sales professionals can help buyers navigate the process. This study was a survey of more than 340 B2B buyers. Sixty-six percent of the survey respondents were VP level or above, and 75% reported being "the decision maker" in B2B purchases.
Fifty-three percent of the respondents in the Aberdeen survey said they halt the purchase process or postpone the buying decision on at least half of their purchases. And it's easy to understand why. For one thing, many buyers simply don't know what they need. Fifty percent of the respondents said their needs are either partially, not well, or poorly defined when they are involved in a purchase.
Beyond poorly-defined needs, the two most common reasons for cancelling or postponing a purchase were:
Buyers saw no differentiation between the prospective solutions (66% of respondents)
Buyers decided that no vendor/solution met their needs (57%)
The Aberdeen study also found that most business buyers reach out to prospective vendors fairly early in the buying process. Forty-seven percent of the respondents said they speak with vendors "when we're beginning to research and explore our options," and 26% said they talk with vendors "when we're defining needs and requirements."
More importantly, 38% of the respondents said they are more willing to talk with vendors earlier than usual in the consideration process if the vendor can "provide me with objective information and help me frame my decision."
The good news is that B2B marketing and sales professionals can have an impact on the length of the buying cycle. Two-thirds (66%) of the buyers in the Aberdeen survey said that when a vendor shows them a new way to solve a problem, it shortens their buying process.
In my last post, I discussed the inconsistent and often contradictory attitudes of consumers and business buyers regarding personalized marketing. On one hand, numerous research studies have confirmed that most consumers and business buyers want personalized offers, messages, and experiences, and are willing to provide personal information in order to receive such offers, messages, and experiences.
On the other hand, several studies have found that customers and potential buyers are growing more concerned about privacy, and aren't comfortable with how some companies are collecting, accumulating, and using their personal or business information. In one fairly large study, less than half of the respondents (48%) agreed that, "There are ethical ways in which a company can use my personal information.
These conflicting attitudes are creating a Catch-22 for marketers because it's now clear that personalization is a high-stakes game. Effective personalization drives broad and significant business benefits, but when marketers get personalization wrong, the consequences can be serious. In one survey, 38% of the respondents said they would stop doing business with a company that sends them "creepy" personalized messages.
So far, most marketing pundits and many marketing leaders seem to believe that the key to maximizing the benefits of personalized marketing is more personalization. In other words, collect and use more data about customers and prospects, make personalization more specific, and use personalization more frequently, in more channels, and for more types of communications and experiences. This explains why hyper-personalization and personalization at scale have recently become such popular buzzwords.
The "more personalization" approach is based on the idea that increased personalization will increase the relevance of messages and experiences, and that the improved relevance will make those messages and experiences more compelling, interesting, and/or satisfying for customers or potential buyers. The problem with the approach is that it doesn't address the privacy half of the personalization-privacy conundrum, nor does it provide specific guidance about what attributes (other than relevance) cause personalized marketing to be welcomed by potential buyers.
We need to use a different approach to deal with privacy concerns and maximize the benefits we obtain from personalization. Here are two related steps marketers can take to get the most from personalized marketing.
Base Personalization on "Informed Consent" The key to alleviating privacy concerns is to base personalization on data that each customer or prospect has willingly and consciously provided for a clearly-stated purpose. This approach addresses three practices that frequently cause a customer or prospect to view personalized communications as presumptuous, invasive, or "creepy:"
When a company bases personalization on data that the customer has not directly shared with the company (e.g. third-party data)
When a company bases personalization on data that the customer or prospect has not consciously shared with the company (e.g location data from a smartphone, browsing history, etc.)
When a company ostensibly collects information for one purpose and then uses the data for other purposes.
Customers and prospects won't see personalized marketing as intrusive or "creepy" when they willingly provide personal data in exchange for personalized content or experiences that are designed to serve a clearly understood purpose.
Make Personalization Pragmatically Useful
The most effective personalized marketing programs are those that deliver meaningful, pragmatic value to recipients. A recent study by Gartner/CEB provides strong confirmation of the importance of making personalization useful. The centerpiece of this study was a 2018 survey of more than 2,500 consumers in North America, Europe, and Asia-Pacific.
One objective of this study was to identify what type of personalization is most effective. So survey participants were asked several questions about the content of the personalized messages they received. Based on the survey responses, Gartner/CEB identified two basic types of personalization:
"Prove You Know Me" Personalization - These types of messages mention the recipient's personal information, base personalization on information about the recipient's past purchases from the company, or generally reflect the recipient's interests in some way.
"Help Me" Personalization - According to Gartner/CEB, these types of messages can make it easier for the recipient to complete a purchase, help the recipient understand how to better use a product, or otherwise help the recipient solve a problem or address a need.
To measure the relative effectiveness of these types of personalization, Gartner/CEB created a "Commercial Benefit Index" that considered four consumer intent or behavior factors - brand intent, purchase, repurchase, and increase in shopping cart size. When Gartner/CEB analyzed the change in the Commercial Benefit Index produced by each type of personalization, they found that "Help Me" personalization produced a 16% increase in the CBI, while "Prove You Know Me" personalization resulted in a 4% decline in the CBI.
The important point here is that marketers should organize their personalization efforts around specific "programs" that are designed to serve a clearly-defined purpose and provide pragmatic value. When customers or prospects proactively choose to participate in a program by providing relevant personal information, the personalization-privacy conundrum disappears, the personalization will be welcomed, and it will be more compelling and impactful.
For more than two decades, the value of personalization has been largely unquestioned in marketing circles. Most marketing leaders now view personalization as essential to marketing success, and providing personalized marketing messages and customer experiences has become a top priority in many companies.
Several recent research studies have confirmed that marketers strongly believe personalization drives improved marketing performance, and that most are committed to making personalization a core component of their marketing efforts. For example:
In the 2019 Trends in Personalizationsurvey by Researchscape International and Evergage, 70% of surveyed marketers said personalization has a strong or extremely strong impact on advancing customer relationships, and more than half of the respondents said personalization produces increased conversion rates, increased visitor engagement, improved customer experience, and increased lead generation/customer acquisition.
In the 2018 State of Marketingresearch by Salesforce, more than eight out of ten surveyed marketers said personalization delivers major or moderate improvements in brand building, lead generation, customer retention, customer acquisition, and customer advocacy.
In the 2019 Digital Trendsresearch by Econsultancy and Adobe, targeting and personalization was the second most frequently identified priority for 2019 among survey respondents from larger enterprises.
There are also several studies showing that consumers want (and increasingly expect) personalized experiences.
Given these research findings, it shouldn't be surprising that many marketing pundits are now advocating the use of "hyper-personalization," which generally refers to the use of real-time data and artificial intelligence to deliver more relevant content to each recipient.
So the correct strategy for marketers is to personalize everything they can, whenever they can, as much as they can, right? Well, not so fast!
When survey participants were asked about specific types of personalization, the results were even more stark, as the following table shows:
Note that more than half of the respondents in this survey believe all four of these personalization practices are unethical, not just annoying or ineffective.
Other research has confirmed that people will react strongly when they perceive personalization goes too far. In the 2018 Consumer Personalization Panel research by Gartner/CEB, survey participants were asked how they would react if a company sent them irrelevant or annoying emails. Forty-eight percent of the respondents said they would unsubscribe, and 12% said they would stop doing business with the company.
But when they were asked how they would respond if a company sent them personalized messages that were "creepy," 57% of the respondents said they would unsubscribe, and 38% said they would stop doing business with the company.
When all of the recent research is considered, it's clear that marketers are facing a Catch-22 when it comes to personalization. On one hand, most customers and potential buyers say they want personalized offers, messages, and experiences, and large majorities also say they are willing to provide personal data in order to receive such offers, messages, and experiences.
At the same time, however, most customers and potential buyers are growing more concerned about privacy, and they aren't comfortable with how companies are collecting, accumulating, and using their personal or business information.
So, how can marketers deal with buyers' inconsistent and contradictory attitudes toward personalization? How can marketers balance the benefits produced by effective personalization against the risks of creating personalized messages or experiences that buyers will perceive as intrusive, presumptuous, or otherwise "creepy?" In my next post, I'll provide a few suggestions for dealing with this growing conundrum.