At the advent of digital marketing, companies poured millions for dollars into digital ad campaigns all in the name of acquiring new “leads.” But with the introduction of #big data tools like Hadoop and advanced data science and analysis, why are so many marketers still investing in old-fashioned campaigns that convert at just fractions of a percent? Jason Alumbaugh explains how the buyer’s journey has transformed over time, and demystifies dwindling click through rates. He goes on to paint a picture of how B2B marketers can effectively reach an empowered audience who tends to make buying decisions by committee, and leaves a rich digital footprint across the web.
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I was fascinated recently by a documentary I saw about a serial inventor, Dean Kaman, called “SlingShot.” What stuck out most to me about the movie was a scene in which Dean shows six pictures of his heroes he keeps on a wall in his home. His heroes included Archimedes, Da Vinci, Galileo, Newton, Maxwell and Einstein. Each thinker represented a fundamental leap in our understanding of the way the world operates. From each of these moments of clarity sprung a thousand new insights. In the film, Kaman noted that “between this guy (Archimedes) in 200 BC, through this guy (Einstein) who was alive when I was born, you’ve got 2200 years. And other than these six guys, not much happened.”
How is this relevant to B2B sales and marketing? I believe we are stepping into a new paradigm, one informed by the convergence of new technical capabilities and the tangible, real world success stories that drive enthusiasm and investment from the masses. The evolution of big data tools like Hadoop and Spark and the data science techniques to use them effectively have come to inform business outcomes, influence mobile and location-aware technology and have evolved 15 years of digital marketing techniques. I believe that when the histories are written, the origin moment for modern sales and marketing will be the invention and global expansion of the internet. But just like other foundational shifts in the core operating structure of the world’s economy (often referred to as the first, second, and third industrial revolutions), the biggest gains in productivity and business impact will be realized not at the point of origin (in this case the founding and initial expansion of the internet to power global commerce), but as a result of the convergence of these new technologies that are now enabling companies to DRAMATICALLY impact their business strategies.
Shifting from Old Paradigms to New Realities
In the world of B2B sales and marketing, most companies I meet with are still operating in the old paradigm. A world that throws out millions of dollars to buy ‘leads’ over and over again, while at the same time throwing millions to run digital ad campaigns that convert at .001%. New sales and marketing tactics (programmatic ad buying, audience targeting and retargeting, account based marketing, content marketing, sales and marketing alignment on accounts, etc.) are emerging to pull the wool back on these areas of inefficiency. While they all can help, they traditionally fall in the category of ‘point fixes.’ They are tactics that can help with percent increases to conversion metrics or revenue goals. But they are, in my opinion, evolutions of the lead-based sales and marketing tactics that were developed at the the beginning of the internet age.
We don’t need a subtle evolution of those tactics, but instead, a rethinking of the entire process. We must understand the major business challenges created by the centers of research on the web, including the associated business models that sprung up in support of those centers of research, and the technologies available in 2016 to reimagine the process.
First, we know from many credible industry experts that the buyer’s journey has changed. When the internet first came into existence, and the first raft of early adopters jumped in, the value was there. Click-through rates in 2000 were close to 10% (compared to today’s .001%), and everyone was excited about the internet’s ability to power global commerce. Webvan was going to deliver all our groceries, Amazon all our books, and every business was moving aggressively to form a web presence for their company and build a lead generation engine around this new paradigm.
As the internet took over much of the B2B research process, legacy media companies jumped in with both feet to create destination websites for B2B research. The business model behind those publisher’s destination websites? Yep – they sold leads. And what is a lead? A lead from a publisher ranges in cost from $30 to hundreds of dollars depending upon what criteria the customer requested around those leads. So companies began filling their databases with these leads (often buying the lead for the same contact multiple times), and qualifying those leads to sales.
Where Are We Now?
What we now know is that the internet, and particularly these centers of B2B research, have enabled a change in the transfer of power. Historically companies and sellers held the information, but now customers and buyers are empowered to conduct extensive research (technical documentation, social feedback, industry analyst vendor rankings), in large part ANONYMOUSLY online. We also learned that B2B companies make decisions by committee. How does the old lead model help us with the buying committee? It doesn’t, and in many ways it actually gets in the way by focusing all of our efforts on the 10-15% of people (usually the low level researchers) who make it through the outdated process. What about the 85-90% who don’t? What if there was a way to reinvent the entire process, but building the process around the 100% of companies that are actively in market, vs. the 10-15% that make it through an antiquated and broken process (and probably aren’t the right people to talk to anyway)?
The first application of predictive models to gain traction in sales and marketing were around predictive lead scoring. In many ways, this was really just an extension of the heuristic lead scoring available in modern marketing automation platforms (like Marketo & Eloqua), but focused on adding more data points and data science techniques to score leads. Predictive lead scoring is a great example of putting a band-aid on an ax wound. Despite early excitement, the dramatic improvements promised by PLS vendors never materialized. Why? In my opinion, the problem wasn’t big enough because they were only focused on prospects that had “raised their hand,” and they weren’t focused on using the ‘convergence’ of new technologies.
The PLS approach is based on look-alike modeling, which is using static profile attributes like account industry, contact title, or recent funding event to find accounts and people that “look like” others. This is not a big data problem and it in no way helps companies solve the BIG problem. I’m not arguing that PLS is without value, I’m arguing that there is one major problem for today’s B2B sales and marketing teams, and that you have to solve a BIG problem to expect big improvements.
Solving B2B Sales and Marketing’s Biggest Problem
There is now a way to solve the BIG problem. We can leverage all these new technical capabilities, coupled with our deepening understanding of buyer behavior to build a new model that represents the real world as it exists today (not the world as it existed in 2000). The real world that understands that buying committees at companies make purchasing decisions (vs. buying individuals). The real world that understands that our prospects are leaving a rich digital footprint across these centers of research on the web. The real world that leverages billions of rows of activity data, coupled with big data tools, to understand and act on the digital footprint our prospects’ and customers’ buying committees are leaving everyday on the web. The real world that takes that data, and makes us smarter about how we market and sell to those companies across the buyer’s journey. 6sense is helping our customers step into this new world every day.
So, who is the enemy to progress here? Status quo is the enemy here. The tactics we developed to sell and market in the new internet world of 2000-2015 need to evolve in 2016. The old model of buying leads and running them through a heuristic scoring model (or PLS model) to be called and qualified is alive it well. Hundreds of millions of company dollars are currently budgeted to keep this old paradigm afloat. But the smartest and most innovative sales and marketing leaders are seeing the reality for what it is – throwing good money at old processes that have proven to deliver low conversion results. The companies that bravely step into the new world, will be the leaders of tomorrow.