More Complete View of Digital Advertising

As I have discussed in previous posts, I believe the manner in which much of the marketing community is measuring the success of digital marketing and marketing in general is incomplete, sometimes shortsighted and eventually problematic.
Effective sales and marketing requires influencing buyers' behavior, attitudes and perceptions. Human beings, as I have discussed previously, are complex. In addition, B2B sales and marketing is a complex and often long process.

In my opinion, we are kidding ourselves if we think that we can measure true marketing ROI by counting how many clicks are delivered or even the number of downloads we receive from a lead generation program. B2B sales and marketing is simply a great deal more complex. Clicks, time spent on a site, page views and download activity allow you to gauge interest and engagement. Of particular interest to me is measuring escalating engagement--if a specific decision maker is downloading every piece of information they can get their hands on for Company XYZ's product, one could probably assume that buyer is in heavy research and decision set creation mode.

The following charts provide a clear illustration of the branding, awareness generation and perception changing impact of online display advertising. These undoubtedly will be unwelcome illustrations for many of us in the marketing community as we are all looking for silver bullet metrics. But, I do believe that it is important to continually remind ourselves of the realities of successful marketing--it just is not as easy and clear cut as we would like it to be.

Illustrations © 2008 Publishing Executive magazine, August 2008 issue.

Are We Selling and Marketing Like the Mattress Industry?

I try to write my posts in a manner that is directly relevant to our lives as business-to-business sales and marketing professionals. You are going to have to stick with me for a few moments on this one, but I do believe that this message is worth some thought.

The three life maintenance activities I hate the most are buying a car, any sort of home mortgage activity and buying a mattress. Within the last three months I have undertaken two of these three dreaded activities—I bought a new car and today I bought a new mattress. I despise these activities to such an extent that I often procrastinate and create a situation that really should be avoided—I really need to make a purchase decision quickly. Why do I hate these purchases so much?

As a generalization, car and mattress/furniture sales people and mortgage brokers sell in an old fashioned, high-pressure manner that creates tremendous tension between buyer and seller. There is often an element of dishonesty and fast talking that puts the onus on the customer to identify the reality of the situation. I will take this moment to apologize to the truly good and talented sales professionals in these fields.

By my walking into the mattress store this afternoon, the store sales staff probably could assume that I either needed or wanted a new mattress. Maybe some people spend their Saturday afternoons just checking out new mattress offerings as a casual hobby, but I certainly do not. I had a source of pain, literally, due to the worn out mattress I currently own. There are numerous places the mattress sales person could have started in order to begin winning my trust and affection.

Are you suffering back pain as a result of your current mattress? Do you have any back, spinal or hip injuries that I should be aware of as I work to help you to select the best mattress for you? Do you believe that you are sleeping restlessly due to an unsuitable mattress? Is price or quality more important to you? Are you looking to make a purchase in the near future, or have you just begun shopping?

Rather than working to understand my needs, the mattress salesman launched into a rapid fire dissertation of the features of their various mattresses. Many of the features, frankly, were not value points to me—it was just noise. I wanted a comfortable mattress, at a fair price (not necessarily the lowest price), that would be durable and easy to keep clean and would be appropriate given the couple of hip and back issues my husband has.

How many of us market and sell too much like the mattress industry? Most of us are seasoned marketing and/or sales professionals. We truly care about our customers and work to target customers that would really benefit from the products and services we have to offer. This being said, we all have numbers we are working to hit or objectives we are working to reach. The best amongst us, if we are honest with ourselves, occasionally fall prey to the mattress salesman mentality in our sales and marketing techniques.

Are we rattling off a list of features that are impressive to us and forget which customer pain points we can help address? Do we translate our snappy technology into “this is what it means for you” value statements? Do we get impatient and become tempted to pull out an old-school high pressure sales or marketing tactic? Do we understand that when a customer walks into “our store” that they probably have an issue that they think we might be able to help them with? Of course, most of us don’t have actual stores, but potential customers do “walk into our stores” by engaging in our marketing efforts, accepting a meeting with a sales person or walking into our trade show booth.

To add even more complexity to our task, buyers sometimes don’t know the specifics of what they need or how much it should cost. We have to educate them and help to identify their needs. When I walked into the mattress store this afternoon, I had not purchased a new mattress in more than 15 years. I had little idea how much I would need to spend to acquire an acceptable mattress. I had no knowledge of the wonders of a combined latex and memory foam bedding product. All I knew was that my current mattress is worn out and my back aches too many mornings when I wake up.

Sales and marketing are challenging professions. We win by our customers winning at every point along the sales and marketing path. I have always believed that if we do the right things, if we really care about our customers, if we work to keep focused on “them,” the money will follow. This has been the case in my career at least.

Behavior Is Key When Scoring Online Leads

The following article was published in Crain's B2B. I found the article very relevant and contains ideas, in my opinion, worth consideration.


Behavior key when scoring online leads
By Jon Miller

Question: How does one best track lead behavior to achieve the best results in an e-marketing campaign?

Answer: The Internet has fundamentally changed how people research and buy b-to-b solutions. Buyers today keep tight control over their buying processes and expect to be able to get the information they want without talking with a salesperson. They use search and other online tools to identify their requirements, build short lists and evaluate vendors. As a result, b-to-b marketers meet prospective buyers earlier in
the buying cycle than ever before. This means that most leads (as high as 95%, in fact) from e-marketing campaigns are still in the research phase.

Prematurely passing these early leads to sales can lead to disaster since it annoys the buyer with an unwanted interruption and makes the salesperson even less likely to follow up on future marketing leads. That's why lead nurturing, the art and science of building relationships with qualified prospects regardless of their timing to buy, has become such an important topic in the last few years.

At the same time, if and when someone is actively looking for a solution, you want to be sure to identify them and pass them to the right sales rep as quickly as possible. Lead scoring lets you find the hottest leads, but too many companies use only basic demographic data (e.g., title, company size, etc.) in scoring. This is useful, but demographic data only tell how interested you are in the prospect—and nothing about how interested the prospect is in you.

Even BANT criteria (budget, authority, need and timing) have limited usefulness since buyers' answers to those questions are notoriously inaccurate (only 29% of respondents always fill that information out accurately, according to MarketingSherpa). In contrast, as we all know, people's actions speak louder than their words. This means you should also track and score a lead's behavior so you can measure their interest and engagement in your solution.

By setting a cookie for everyone who comes to your Web site (not just known visitors), you can track behaviors for anonymous visitors as well as for known contacts in your lead database. This is especially useful when a prospect does eventually register. At that point, you will already have more complete information on who is hot.

For example, say that two prospects fill out the “contact me” form on your Web site. The first has never been to your site before and found you today by clicking on your ad offering a free white paper. The second found you three weeks ago from Google AdWords; they didn't convert at the time but have since been back three times, spent time reading your blog and today got to your site by searching for your company name. Without the ability to track prospect behaviors, the two prospects may look identical, but add the behavioral dimension and there is a clear difference.

By monitoring and tracking online behaviors such as e-mail responses, completed forms and Web site visits, you can develop much more accurate and actionable lead scores. Assign a point value to each behavior, just as you would assign a value to each job title. Certain behaviors—such as using your company brand name in a search, visiting your pricing page or returning frequently to your site—indicate higher readiness to buy, so assign even higher weights to those behaviors.

Since b-to-b purchases typically involve six to 21 people, add up the scores for each contact at a given company to measure the total level of engagement for that organization. If you have more than one product line in your organization, consider creating different scores for each to track prospects' level of interest in each. Finally, be sure to lower the score over time if engagement goes down—or consider tracking recent engagement as well as total engagement.

Lastly, review the point values with the sales team and decide which scores indicate sales readiness. Be sure to also create “fast tracks,” that is, specific behavior paths that indicate a lead should be contacted immediately regardless of score. If the sales team determines a prospect is not yet ready, recycle the lead to marketing for additional nurturing.

Finally, be sure to close the lead and refine your scoring rules and point values over time for continuous improvement.

Jon Miller is VP-marketing for Marketo (www.marketo.com), a provider of marketing automation software.


Entire contents © 2008 Crain Communications, Inc.

Value of Behavior—a New B2B Marketing Metric

I shared with you my view that calculating true ROI for isolated B2B marketing activities is a very complex, potentially impossible proposition (please refer to the “Marketing ROI or Cost per Desired Behavior?” post August 4, 2008).

Successful B2B marketing and sales is a combination of art, science and sound business practices as the ability to sell any product or service requires that the seller influence a buyer’s behaviors and perceptions. If buying is a behavior and effective selling requires influencing behavior, does it make sense to create a new marketing metric—Value of Behavior (VOB)?*

I believe that a Value of Behavior metric could be used in many cases for effective analysis of specific marketing activities and marketing vehicles.

Let’s take a closer look at this concept. We know that the buying/sales process follows a path—awareness, preference, evaluation, resolution and retention. Sometimes we get lucky and a particular sale or customer acquisition effort moves forward very quickly. However, a typical B2B sales cycle spans several months, sometimes years.

There are steps or stages within the sales cycle. If we could assign a value to customer/prospect behavior, particularly early stage buying cycle behavior, a meaningful metric could be created.

All prospects, leads and opportunities are not created equally. Leads and interest from prospects that fall within a given target customer profile are more valuable than leads or interest outside of that profile. Interest from the economic buyer is more valuable than interest from those further down on the totem pole and in some cases more valuable than interest from higher ups.

I stated in my “Marketing ROI or Cost per Desired Behavior?” post that interest from a company already in your sales pipeline is arguably more valuable than a brand new prospect. We know that it takes numerous sales and marketing touch points to convert and retain a customer, so a white paper download, website visit or phone call from those customers already in the pipeline is incredibly valuable—evidence that you are effectively moving through the buying cycle.

If we assigned a numerical value to customer behaviors or perceptions, or customer group behaviors/perceptions generated by a specific marketing program element, I think we have something. Maybe increasing awareness of your company and/or products within a target customer group is worth five points. Maybe a white paper download from someone other than an economic buyer is worth two points. Maybe a trade show booth visit is worth four and a half points. I think that you get the idea. An effective metric would need to be more complex than this, be able to be tracked and requires less than wholly scientific judgment calls by a qualified person, but I do think that the idea has merit.

One of the problems, amongst several, with many Marketing ROI calculations is the desire to apply mechanical style measurements to complex and involved human behavior. Another problem in many, if not most organizations, is the lack of ability to track message layering and escalating interest behaviors.

For a Value of Behavior metric to work there has to be some delineation between marketing and sales function impact. This comment is contradictory to nearly everything you will ever hear uttered from my being, as I believe B2B marketing and sales have to work in very close concert.

However, in the early stages of the buying/sales cycle the marketing department’s messaging is typically the lead influence of a prospect’s behaviors and perceptions. As a prospect moves along the sales/buying process, the lead influence flips (or should flip) to the sale person(s) responsible for the account. The marketing department is critical throughout the entire sales cycle, but as a deal or customer relationship moves further down the path the voice of the sales department is much louder and marketing messages move, a bit, into the background.

If a Value of Behavior metric is implemented, it might be identified that prospective customers are moving through the initial stages of the buying cycle very nicely. The marketing department developed great positioning messages, selected effective marketing partners, generated interest within the market and qualified leads are in the pipeline. These early stage successes do not mean that opportunities will result in sales. Maybe there are problems with individual sales people, maybe there are problems with an entire sales structure, or maybe there are problems with the performance of the products themselves.

Marketing and sales departments should be integrated and work in tandem. However, via effective Value of Behavior analysis, marketing partners, marketing mediums and isolated marketing activities could be evaluated and larger problems within organizations could be spotted.

From my experience, marketing departments, marketing/advertising agencies and marketing vehicles are often the fall guys when efforts are not as successful as projected. Sometimes marketing departments, marketing agencies and/or marketing vehicles are ineffective to be sure, but sometimes other holes need to be plugged.

**If the term Value of Behavior is adopted by the marketing community, Rose Southard, Putman Media’s IT Director, deserves the royalties. Or, maybe she and I could split the bounty.

Marketing ROI or Cost Per Desired Behavior?

ROI Marketing is unquestionably a strong movement within the market community. I embrace, even enthusiastically applaud, the concept. For a lot of years many companies lavishly threw marketing dollars around based, to a great extent, on emotional criteria and gut feelings.

Successful business management requires making decisions and allocating resources to maximize profits. By its very definition, maximizing ROI requires taking a hard look at the ratio of money gained or lost compared to the dollars invested.

Calculating ROI for overall marketing dollars spent over a period of time is a complex, but a somewhat manageable proposition if all the necessary data is incorporated into the calculations (and if the data is captured correctly and accurately).

Marketing ROI is really pretty easy to calculate if you sell low ring/low risk products, particularly if the company in question is fairly small and noncomplex. Say, for example, that you owned an online bookstore with annual sales of $1 million. If you spent $200,000 on various marketing programs and increased your sales to $2 million as a result of spending those dollars, you could say with a strong degree of certainty that you achieved a favorable ROI on your marketing investment. Given this extremely straight forward business model you could also pretty easily calculate ROI for many of the individual components of your marketing program.

However, I contend that calculating marketing ROI for most B2B marketers is a great deal more complex than our online bookstore example. Many if not most, B2B sales and marketing efforts are complex, take a good amount of time and require many different touch points to achieve success. I am sure that my friends and clients selling multi-million dollar capital equipment solutions would love for their sales process to be as simple as a couple of mouse clicks and a credit card payment. It just doesn't work this way.

Most B2B sales cycles are long and require marketing messages and sales activities to be strategically layered to achieve success. For this reason, I cringe every time I hear a B2B marketer talking about the ROI they achieved for a banner ad program on an industry web site or an ad they placed in magazine.

Let's look at digital media, as much of the marketing ROI discussion I am privy to resolves around digital rather than print media. Although the argument for the effectiveness of print media is a strong one, digital media affords us the opportunity to measure some things that are much more difficult to measure for a print advertising program. However, what are we really measuring--not ROI in most cases. Everyday I hear pharmaceutical industry suppliers say things like--"We spent $1,500 on website X and got 42 clicks on our ad. The program delivered a very strong ROI."

Unless banking regulations have change drastically without my knowledge, you can't take 42 clicks to the bank.

What is really being said is that we spent $1,500. Via an effective media environment and strong ad creative, we motivated 42 people to want to learn more about our products and solutions. Spending $1,500 and motivating 42 people to want to learn more about what you have to offer is great, but it is not a measurement of ROI. Perhaps we could call this Cost per Desired Behavior. We want someone to click on our ad to learn more--how much did it cost us per customer to achieve that desired behavior. In the $1,500 for 42 clicks example it cost $35.71 per desired behavior.

Is this Cost per Desired Behavior high or low? It depends on the market, on your potential customer base and on the dollar value of a typical customer. If you are selling a $1 million solution and there are really only 5,000 decision makers in the world for your product, $35.71 Cost per Behavior is probably quite good. If you are selling $0.50 widgets that are not consumed very quickly by your customer base, the same Cost per Behavior might be extremely high.

If we can agree that most B2B sales efforts are long, complex and require numerous touch points of sales and marketing messages, it becomes quite challenging (maybe impossible) to measure actual ROI for most isolated B2B marketing or sales activities. Which click on an ad, which client entertainment dinner, which white paper download, which trade show booth visit, which sales presentation, which print ad, which phone call convinced that big customer to sign on the dotted line? The answer is probably none of these specific activities did, but all of these activities in tandem achieved success.

The other question to ponder is whether or not a click or a download from a customer already in your sales pipeline, or perhaps an existing customer, is as valuable as a click or a download from a new prospect--someone not currently in your sales pipeline. I would argue that behaviors from customers currently in your sales pipeline or existing customers are even more valuable.

Digital media, unlike many other sales and marketing activities allows us to measure behavior. But, I think that it is important to understand what we are measuring in most cases--behavior, not ROI.