Siddharth Taparia, VP of marketing at SAP, offers advice on inbound, adoption and account-based marketing
Sales and marketing models in the B2B software industry are dramatically changing. They now closely resemble the B2C models, because enterprise customers are researching, evaluating, and even purchasing products with minimal sales touches. This trend is not limited to the technology industry – it extends to other B2B segments and requires a new set of marketing capabilities.
This article examines the three key capabilities that B2B marketing executives need to evaluate the competencies in their organisation to respond to the new customer behavior:
- Inbound marketing
- Adoption marketing
- Account-based marketing
I will review each one with actionable recommendations for B2B marketing executives.
1. Inbound marketing – Content is king (sort of)
B2B marketers are often challenged to deliver a volume of high quality leads within the budgets they have, so that sales has the pipeline they need to make their numbers. Too often companies rely on looking at the traditional methods of pushing marketing campaigns to their customers. The answer lies in increasing the number of inbound leads – where a prospect has demonstrated an interest in your products or services and is proactively reaching out to you versus traditional methods of list buying and then cold calling them (or emailing them) to find anyone who is interested in speaking with your sales reps. The conversion rates for inbound leads are not only higher, but more important, cost of these inbound leads is much lower, allowing you to stretch your budgets further. According to the CMO Council, content marketing generates three times as many leads as traditional outbound marketing, but costs 62 per cent less.
Inbound marketing comes in many forms but the primary goal is the same: using search and social media to bring prospects to relevant and insightful content on your website that addresses their specific issue or makes them better at their jobs. This is the essence of inbound marketing. Instead of pitching your products or services, if you deliver consistent, ongoing valuable information to buyers via pull methods such as organic search, search engine marketing and social media, they will engage, begin to show preference for your products and value proposition and ultimately reward you with their business and loyalty. And they do.
Following are the key attributes of content that you would need to create for inbound marketing:
- Relevancy: content must be relevant to prospects and it must be bite-sized, so it can be easily consumed by the busy, multi-tasking professional during his or her already overloaded work day.
- Distribution: ensure wide distribution via social media, comments and forums to improve search results
- Feedback loop: you must have the right analytics in place so you can clearly assess which content works the best with your target segments
- Alignment with buying cycle: content should be aligned with different stages of the buying cycle.
- Awareness content designed to keep your solution top of mind.
- Consideration content such as educational information in the form of buyer guides, ebooks, Q&As and other highly information-based content designed to include you in the short list of vendors
- Validation content such as checklists and client case studies designed to create preference for your solution.
2. Adoption marketing – Don’t sell and go away
Many B2B segments are moving to a subscription or usage model versus the traditional asset sale model. This model requires customers to renew at the end of their contract term – usually a year. Acquisition costs run high and are only recouped after months or even years. The model is also built with an assumption that a large part of growth will come from increased usage expansion and selling add-on services to existing customers. It is important to ensure that the adoption of products is high, so customers are using the solution and finding value. Product adoption and usage drives renewal rates. Ongoing investments in product training is important to increase adoption.
Driving adoption of an anchor product and using it to cross-sell other products is a key growth strategy for many companies. For example, email service can serve as an anchor SaaS offering for a services provider to SMB customers, generating around $5-7 ARPU (Average revenue per user) each month. Cloud e-mail customers, who are satisfied with their vendor, have demonstrated high propensity to buy additional offerings (e.g., add-ons like archiving, voice-based services, backup etc.) from the same vendor, since it gives them the benefit of unified billing, provisioning, identity management, and user experience. Adding up the value of add-ons, the combined basket can more than double to $12 -14 in ARPU per month. Akin to how telecoms made significant profits from value-added services (e.g. call waiting), these add-ons generate considerable incremental profits.
In order to drive adoption, companies need to embed customer journeys into their operating models in four ways: They must identify the journeys in which they need to excel, understand how they are currently performing in each; then build cross-functional processes to redesign and support those journeys, and finally, implement cultural change and continuous improvement to sustain the initiative at scale.
3. Account based marketing – Market to segment of one
Successful B2B marketers are marketing to accounts on a one-to-one basis – catering to their needs with a specific value proposition rather than using generic messages. Such an approach will increase their propensity to purchase your products.
Many B2B marketers are building predictive models that match patterns based on profile and behavior. By analysing account needs based on referral paths, search terms, conversion rates, industries, geographies, etc, such models can identify the best prospects at the microsegment level. Marketers can then use marketing automation (MA) technology to customise their user experience with personalised landing pages, messaging, offers, etc. Triggers based on customer usage patterns can notify sales when a customer is likely to be interested in a specific product or an upgrade. Marketers have achieved five to 15 per cent revenue improvements with such account-based marketing techniques.
Such techniques also allow sales teams to prioritise inbound leads and call the accounts with the most potential with very specific value propositions.
