This is the second blog post in a series that discusses the new breed of B2B buyer that has evolved in adaptation to the Internet and explores new rules of engagement that mirror those behaviors to maximize B2B sales and marketing effectiveness. The first post in this series described the behavioral traits that differentiate the new species of B2B buyer from its pre-millennium ancestor and explained how to align with the new B2B buyer’s expectations of independence and instant online gratification through extensive content publishing and efficient self-service. This second post describes how the Internet has blurred the B2B buying process and suggests ways to adapt B2B sales and marketing processes to increase engagement and influence.
The New Elusive B2B Buyer
In the pre-millennium B2B buying process, the salesperson was the gatekeeper of information. That meant that the pre-millennium B2B buyer had to engage with the salesperson early on and stay engaged throughout every stage of the B2B buying process. A prospect might go dark or a sale might be lost, but a purchase could not move forward without engaging with the salesperson. Not so today. Unfortunately for the B2B salesperson, the new B2B buying process tips the information imbalance in the prospect’s favor. The new breed of B2B buyer can find your product or service, learn about it, evaluate it, see what others think about it, and in many cases try it and buy it, all without engaging with a salesperson.
The new breed of B2B buyer is independent and elusive,
blurring in and out of focus and engaging directly with sales
only when there is clear value to be gained, not just to get information.
The new elusive B2B buyer spends more time going solo throughout the B2B buying process, blurring in and out of focus and engaging directly with sales only when there is clear value to be gained, not just to get information. This is made doubly complex by the fact that the “B2B buyer” is usually more than one person. Where before the salesperson could corral all the influencers and decision makers into a meeting and orchestrate a linear sales cycle from beginning to end, today’s B2B buying process is organic and diffuse with different stakeholders visiting your website ad hoc, checking your knowledgebase and support forums, calling your sales team for a quick question and then going dark, filing a support ticket on a trial account, discussing your product and company in social forums, and making internal decisions by email with no need to call a face-to-face meeting.
New B2B Buyer Rule of Engagement #3 – Measure, Model and Move
The bad news is that the Internet has made the new B2B buyer more elusive and the new B2B buying process harder to define and control. But, the good news is that the Internet has made the new B2B buying process more transparent. What? Wait a minute. Say that again.
While the new breed of B2B buyer appears more elusive to the B2B salesperson, this is not the case for the B2B marketer. Web browsers have cookies, hyperlinks have tracking codes, and every online interaction is overlaid with meta-data that indicates buyer intent. It’s a trade-off for everyone involved. The new B2B marketer must adapt to the new B2B buyer by developing better measures and models that move the new B2B buyer through the B2B buying process and compensate for the B2B salesperson’s loss of control over the flow of information.
The Marketing Automation Mandate
Marketing automation is one of the fastest growing SaaS categories. However, it isn’t because this technology is somehow cutting-edge (no offense to my SaaS colleagues in marketing automation). It’s core function is to measure, model and move the B2B buyer through the B2B buying process by tracking online activities and transforming that data into knowledge that is acted upon through automation. The underlying technology is not new and the applications could have been built ten years ago. But, they wouldn’t have been as valuable ten years ago.
Marketing automation is taking off because the behavioral traits of the new species of B2B buyer have created both the ability and the need to measure, model and move the B2B buying process through automation. And, the winners in the marketing automation category will be those SaaS companies that leverage SaaS Do #6 Reach Across the Firewall to create a seamless B2B buying process that fully integrates the elusive, external behavior of the new breed of B2B buyer with the internal processes of the new breed of B2B sales and marketing organizations. Marketing automation has gone from nice-to-have to must-have, because it creates real competitive advantage.
New B2B Buying Process Tech Tip
The pre-millennium B2B buying process was a structured sequence of activities jointly managed and negotiated by the B2B buyer and B2B salesperson. And, pre-millennium measures and models reflected that structure. Most every B2B sales and marketing professional is familiar with the sales funnel where the B2B buyer is envisioned as being qualified and converted by the B2B salesperson at each successive stage of the B2B buying process. It is a very deterministic model that assumes a source of the incoming lead and a linear progression from one stage of the B2B buying process to the next until the deal is won or lost. Virtually every salesforce automation package now supports this model.
In the pre-millenium sales funnel model, marketing campaign success or failure is determined by lead volume, cost, conversion and ROI metrics attributed to each lead source. For example, if a successful trade show that cost $20,000 to attend generated 100 leads of which 5 closed for a total of $100,000 in new revenue, then the metrics for the show would be as follows: $200 cost per lead, 5% conversion, and an ROI of 5:1. However, this model assumes that the trade show was the ultimate source of the lead and the post-show B2B buying process consisted of the B2B salesperson skillfully escorting the B2B buyer through the sales funnel to close.
Pre-millennium B2B marketing professionals would create detailed spreadsheets of all their campaigns and rate them according to these metrics. Marketing budgets and allocations would be determined by this analysis. Well, you can throw all that out the window if your prospect is the new breed of B2B buyer, because this prospect’s B2B buying process is anything but linear, deterministic and under the B2B salesperson’s control. And, I defy you to identify anything resembling a lead source or a clean hand-off from marketing to sales.
The Fuzzy Funnel – Correlation vs. Causation
What you can measure in the new B2B buying process, particularly if you have a strong marketing automation system in place, is a long string of buyer attributes, activities and metrics that characterize the new B2B buyer’s random walk to purchase. You will find concentrated bursts of buyer activity, such as quickly browsing half your website, combined with unknown gaps and unexplainable delays. And, you will have a gut feeling that some sequences of buyer activities are more important than others, e.g., making a detailed review of pricing and registering for a free trial vs. checking out the most recent press release and bouncing.
The new marketing math reflects the diffuse and random nature of the new B2B buying process. Movement through the fuzzy funnel comes in fits and starts, forward and backward with different B2B buyer decision makers moving fluidly in and out. True forward progress through the fuzzy funnel is indicated by positive metrics that are highly correlated to winning a deal, e.g., qualified buyer attributes, trial registration, trial usage, lead score, price estimation, formal sales proposal, etc.
The first goal of the new marketing math is to create a statistical model of the fuzzy funnel comprised of metrics that indicate progress through the fuzzy funnel at each stage of the B2B buying process. The second goal then is to use that model to focus marketing creativity and spend on those campaigns that drive activity that correlates strongly to them. Marketing campaigns like a trade show are not modeled as a lead source causing entry into a structured sales funnel managed by a B2B salesperson, but as a driver of buyer activity that correlates to progress through the fuzzy funnel. For example, if free trial is a critical step in the new B2B buyer’s evaluation of your product that correlates strongly to won deals, and 80% of the people who view your weekly webinar sign up for a free trial, then you darn sure want to get more people to watch that webinar. Instead of a deterministic, marketing campaign ROI predicated on the old lead source model, the relevant measure of marketing campaign success in the new marketing math is the correlation between campaign-specific buyer activity and progress through the fuzzy funnel.
The New Impulsive B2B Buyer
The new breed of B2B buyer is more agile than its pre-millennium ancestor. Cheap and easy access to online information about products and services enables flexibility in the new B2B buying process the same way the elimination of setup costs enable flexibility in manufacturing. When the up-front cost of purchase-related information was high, the pre-millennium B2B buyer was forced to orchestrate a rigid, deterministic B2B buying process that ensured the investment required to execute the process itself was not wasted and produced a positive result, i.e., a considered purchase with high ROI. Purchase decisions were made up front–only the vendor was unknown, budgets were established before the buying process began, requirements were collected and communicated, vendors were evaluated in tandem, and a clean vendor selection was made.
The new breed of B2B buyer does not face this constraint. Today, window shopping is cheap. In the case of most SaaS and cloud applications, the entire B2B buying process is cheap: trial is free and purchase amounts to a monthly subscription that can be canceled at any time. Instead of orchestrating a structured B2B buying process with a certain outcome, the new B2B buyer can start, stop, start again, turn around, go slow, go fast, whatever. The new B2B buying process carries no internal momentum. Purchases are motivated by near term organizational priorities and the relative urgency to solve a pressing business problem, which can turn on a dime.
Online marketers lament the waning effectiveness of email. Some even claim that email marketing is dead and spam killed it. Email may be waning for marketing communications, but it is central to the internal communications of the new impulsive B2B buyer and acts as a powerful catalyst in the new B2B buying process. The new impulsive B2B buyer can research your product online, coordinate an email conversation among all decision makers, get a basic consensus without a single meeting, and then stop dead because something else came up. Then, six months later the VP of Such-and-Such decides: “This needs to get done yesterday!” And shoots off an email that reignites the urgency around the purchase. Next thing you know, a previously dead or unknown deal is suddenly very hot, and a purchase is made almost on first contact. Or, at least first contact to the unprepared who are not measuring, modeling and moving the new B2B buying process throughout its lifecycle.
New B2B Buyer Rule of Engagement #4 – Lifecycle Marketing
This new rule of engagement is a natural consequence of the three earlier rules. If you are publishing valuable online content deep and wide according to Rule of Engagement #1 and measuring, modeling and moving the prospect through the new B2B buying process with that content according to Rule of Engagement #3, then you should use your measures and models to align your valuable content with the B2B buying process to optimize its impact and encourage the new B2B buyer’s natural impulses. Map your content to the buyer’s needs at each stage of the B2B buying process and stay engaged throughout the entire customer lifecycle. Hit-and-run marketing cannot recover the control over the B2B buying process that was consciously surrendered to the new B2B buyer by enabling efficient self-service, Rule of Engagement #2.
If your prospect is actively engaged in a B2B buying process, then lifecycle marketing simply amounts to serving up the right information at the right time to keep things moving along quickly and efficiently, e.g., how to get up and running on a free trial after sign-up or where to see a video case study for a similar customer. But, if your prospect gets distracted by other priorities and stuck in the middle of the B2B buying process or worse isn’t even aware there is a need or a solution in the first place, then lifecycle marketing is about breaking the status quo and creating a sense of urgency. Unlike its rigid pre-millennium ancestor, the new impulsive B2B buyer is open, flexible and in a hurry. A compelling new idea can shift priorities and drive reallocation of budget away from lesser concerns and toward your solution.
At a minimum, marketing engagement throughout the entire customer lifecycle from latent pain to repurchase ensures you are there to capitalize on it when the new impulsive B2B buyer switches gears. At a maximum, you have the potential to nurture that impulsiveness to accelerate purchase. Inbound marketing or simply getting found by a prospect is not enough. Once you are found, you must engage with that prospect frequently and consistently throughout the entire customer lifecycle, because if you don’t, your competitors will, and what is easily found can be just as easily lost.
New B2B Buying Process Tech Tip
Great Joel. You tell me that the new B2B Buyer Rules of Engagement say I must not only map my content to the new B2B buying process, but I must also serve it up at the right time to the right buyer persona to move the new B2B buyer along on the random walk to purchase. But, you don’t tell me how!! Well, I’m not going to tell you exactly how, because I don’t think anyone in the B2B marketing community, SaaS, cloud or otherwise has this down to a science. If your marketing automation vendor tells you they do, then they are lying. But, I can tell you how to think about it.
Most B2B marketing automation tools today offer some version of lead scoring. The basic idea behind most lead scoring methodologies is to measure B2B buyer attributes and activities, such as prospect industry, free trial registration, visited the pricing page, watched a video, downloaded a white paper, etc. Then, you assign some value to each one of these things to tally up a lead score, e.g., 35 for the free trial, 5 for the right industry, etc and you set a threshold at which a lead becomes qualified and ready for follow up by a sales rep.
This is all well and good, but how do you decide on the value of a specific buyer activity, especially if you have no history to work with? Here is the answer. You first have to decide what you are trying to predict. For lead scoring you might choose to predict the probability that the deal will close. Or, you might choose to predict a more intermediate metric along the fuzzy funnel like the probability that a sales rep will deem the lead qualified. Either way, you are using the new marketing math where your lead score measures some degree of progress through the fuzzy funnel.
Once you know what you want to predict, the output variable, you must then select the best predictors of that outcome, the input variables, and assign a higher value to those inputs that you believe have the most influence, or in terms of our fuzzy funnel terminology, the highest correlation to the outcome. You also want to avoid choosing inputs with lots of overlap to avoid double counting the same basic behavior, e.g., pricing page views and shopping cart abandonment occurring on the same website visit.
How you go about creating your lead scoring algorithm is as much art as science, particularly today because the tools do not give you much help. If you have no historical data, you just need to guess, watch and guess again. If you have lots of historical data, then you can go so far as to create a true statistical model of the fuzzy funnel. For example, a sound statistical approach to lead scoring would be to run a logistic regression to determine the most relevant buyer activities for predicting a qualified lead or won deal and the exact relative weights of each predictor. Frankly, with sufficient historical data to work with a decent marketing automation tool ought to be able to do this for you.
Qualified lead is just one B2B buying process metric you might want to predict. What about won deal? What about deal size? What about upsell potential? What about cancellation? While most marketing automation tools today lock into a rather lead-centric view of the B2B buying process with the main goal being a clean hand-off of marketing leads to sales, the general idea of the fuzzy funnel has no such limitations. With sufficient historical data, any relevant metric that represents progress through the fuzzy funnel at any point within the entire lifecycle of the B2B buying process can be estimated using its most highly correlated buyer activities as predictors. Those buyer activities then become the focal points of marketing investment to create campaigns that nudge the new elusive, impulsive B2B buyer through the blurry B2B buying process.
(Cross-posted @ Chaotic Flow by Joel York)