Jacqueline Dooley — May 15, 2020
Growth vs Marketing in B2B companies
Before the coronavirus led to a global economic slowdown, digital ad spending was expected to grow by 11% in 2020, reaching $326 billion and capturing more than half of ad spending across offline and online channels.
Fast forward to May, and forecasts look a bit different. In March, the IAB surveyed 350 digital media planners and buyers in the US. They found that more than 70% of buy-side decision makers think that the coronavirus will have a bigger impact on U.S. ad spend than the 2008-2009 financial crisis. Nearly 25% of survey respondents indicated that they’d paused all ad spending for Q1 and Q2 2020, suggesting long-lasting implications for the impact of the coronavirus on businesses across every industry.
Even under the best of circumstances, when economies are booming and budgets are booming along with them, traditional marketing strategies aren’t always enough to fuel growth for B2B companies. At Ocean.io, we believe in taking a data and experiment-driven approach to company growth, one that focuses on reaching the audience segments that will have the biggest impact on your bottom line.
Traditional marketing plans focus on vanity metrics
Traditional marketing focuses on KPIs that are little more than vanity metrics (eg leads, conversion rates, website, and traffic metrics, etc) While these metrics can help gauge trends and flag issues, they don’t tell the complete picture of marketing’s impact (or lack thereof) on a company’s revenue. Marketing that places too much emphasis on vanity metrics creates more work for marketing and sales teams by elevating the quantity rather than the quality of leads.
Reviewing, analyzing, and qualifying leads that are unlikely to convert requires that your sales team waste time selling to low quality, uninterested prospects. It forces sales to sift through and discard large numbers of leads and marketing to generate even more leads to compensate for the large amount of waste inherent in targeting the wrong audiences.
In October 2019, Gartner reported an average lead-to-sales conversion rate among B2B marketers of 6%, although for many companies it’s much lower. Successful B2B marketers have an average close rate of 10% and source 60% of their leads from marketing, versus 43% for less successful companies.
Smart B2B marketers understand that business growth is not tied to vanity metrics like lead quantity or demo requests. In the B2B space, where the demand generation pipeline is complex and comprises multiple touchpoints, the most efficient way to reach the right audiences is through a combination of customer data and experimentation. At Ocean.io, we call this the growth approach.
Growth intelligence: What your CRM data can tell you
Your CRM data contains a wealth of information about current and past prospects including what industries are more likely to convert, deal sizes by industry, sales cycle, and ideal customer/company profiles that can be targeted through marketing.
While growth-focused marketing considers transactional data such as conversion rate, time to close, and deal value, it goes beyond this by connecting your CRM data to help inform a holistic view of your most responsive customers and prospects.
Measuring growth means focusing on quantity over quality but you’re not forgoing leads altogether. Rather, you’re spending time, money, and resources on identifying and reaching out to the right leads.
A sound growth intelligence strategy uses your CRM and transactional data to identify where to target your ads and what to say in your marketing messaging before you launch a single campaign. To this end, the growth approach relies on open communication and collaboration between your sales and marketing teams. There are three main components to an effective growth approach as follows:
1) Build on existing CRM data
The basic function of CRM software is to keep track of your contacts and where they are in the sales pipeline. This basic data already provides a wealth of information that you can use to create a solid growth strategy — information that includes company names, contact titles, and industry segments. However, CRM data is often incomplete because of a variety of issues ranging from data entry inconsistencies, the addition of third-party data from outside sources, and user error.
Starting your growth strategy with existing CRM data makes sense. This is information that’s already available to you and highly specific to your business. Our clients’ existing CRM data is the foundation for Ocean.io’s technology. Your data may initially be incomplete and difficult to leverage but, once it has been normalized and segmented, you’re ready to move to the next component of your growth marketing strategy.
2) Engage in experimentation
Building a successful marketing initiative requires testing. A successful growth approach requires constant testing and experimentation. Once your CRM data has been normalized and segmented, you can begin building marketing strategies accordingly. For example, data analysis may reveal that IT development companies have a higher conversion rate than digital marketing agencies that focus on PPC and SEO.
Based on this information, you may decide to launch a campaign on LinkedIn targeting IT companies that specialize in web development versus digital marketing agencies that focus on SEO (or allocate more ad dollars to one sector versus another). Experimentation doesn’t typically involve a big investment, particularly when advertising on self-serve platforms like LinkedIn, Facebook, and Google Ads — none of which require you to commit to a fixed monthly spend.
The experimental approach allows you to launch media quickly but for a limited investment. It relies on a “proof of concept” mindset, which seeks to prove the feasibility of a campaign on a small scale prior to rolling it out across multiple campaigns or departments. The key to successful experimentation is the third and final component of the growth approach — continuous iteration.
3) Iterate continuously
Digital marketing is a constant dance of launching, analyzing, and optimizing all elements of your growth strategy based on your campaign goals — in this case, business growth.
Optimization ensures you’re getting the most from your marketing initiatives and achieving the bottom-line business goals that make the C-suite happy (eg revenue growth, sales growth, and new customers).
The intelligence you gain from the experimental phase of your growth strategy, once identified, enables you to emulate and apply what you’ve learned to each new initiative. But the caveat here is that, regardless of how successful one individual campaign is, you still need to review the results of each subsequent campaign and optimize accordingly. Continuous iteration increases efficiency over time, enabling you to focus your resources on marketing and sales activities that directly impact growth, while ensuring that time isn’t wasted on less efficient tactics and strategies.
It starts with high quality data
A successful growth marketing strategy relies on high quality, properly segmented data. This can be a barrier for many B2B marketers who must rely on comprehensive data that’s appropriately (translation: consistently) entered into the company’s CRM system, often by a distributed sales force who may be using their CRM software only sporadically.
Thus, the first step in initiating a growth approach to marketing is to normalize your CRM data. As we’ve noted in the past, this can be a painstaking (even impossible) task to complete manually. That’s why we’re big proponents of automation. Our technology automates data normalization and uses machine learning so that new data is normalized on a continuous basis.
Normalization is only the first step to our growth approach. Once your CRM data has been normalized, meaning it can be analyzed by an AI-based algorithm, it’s combined with our proprietary data-sets which we created by scraping company websites, LinkedIn profiles, and other freely available (and thus, GDPR compliant) information.
The combining of our data with yours creates a much clearer picture of what business sectors, companies, and personnel are the most likely to respond to your marketing messages and sales calls.
The final piece of the data puzzle — and a key differentiator of Ocean.io’s technology — is our industry tags. In the B2B SaaS space, company classification is basic, at best, forcing all SaaS companies into a few broad buckets (eg Technology, Software, etc). This is very limiting, particularly when trying to leverage a growth approach that depends on identifying the most viable companies for your given SaaS solution.
To solve this problem, we created our own industry tags to bring a higher level of granularity to the process of identifying and segmenting B2B SaaS companies. This blog goes into more detail about our process and how it’s applicable to the Ocean.io platform. Our industry tags are meant to help our users with their overall growth strategies by correctly identifying specific companies that meet your criteria for growth.
CRM data + normalization + Ocean = the smart path to growth
At Ocean.io, we’re big proponents of using your existing CRM data. Your customer data is the foundation for your growth strategy, but only if it’s high quality, normalized data — the kind of data that powers AI-driven analysis.
The second piece of the puzzle, industry classification, is something we’re equally passionate about. That’s why we created our own proprietary data-sets to enhance your (normalized) CRM data and match it with our industry tags.
Once the data pieces are aligned, you can begin to identify companies within high yield industry sectors that you can target in your marketing plans. Remember to keep your overall goals at the forefront of your growth strategy. High lead volumes and clickthrough rates look great on bar charts, but if they’re not contributing to an incremental increase in sales, revenue and new customers, then they’re meaningless metrics that translate to decreased efficiency overall.
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