Marketing B2B products was relatively inexpensive in the past while costs for data processing were out of reach for all but the largest companies. Now, the picture has been reversed, with marketing and selling costs becoming burdensome. Added to this are the steady flow of new products and services coming into the marketplace and markets that shift as well as fragment.
Mass marketing is no longer a viable method for you, the B2B marketer, since the masses contain too many non-prospects. Segmentation and targeting with pinpoint accuracy is now the name of the game.
The challenge for the B2B marketer today is to reduce the cost of selling. Two of the most practical ways to do this is to increase the salesperson’s productivity or to switch to a more cost-effective selling channel.
Performance marketing can assist you with both objectives by properly integrating B2B sales support performance marketing into the marketing mix and by performing feasibility studies and tests to determine which products, if any, could possibly be sold profitably directly, i.e. via ecommerce / catalog programs or solo campaigns.
B2B performance marketing can also find you prospects, qualify them, and reinforce the salesperson’s selling efforts. It can help your salespeople get in to see decision makers who previously have had their doors closed.
It can broaden the awareness of your prospects and customers for your B2B company and its products and services, and serve as a reminder that the company wants to do business with them.
And because performance marketing techniques can be measured and adjusted to appeal to the needs and expectations of the customer, they have proved very effective in achieving those objectives.
The Simple Solution for B2B Firms’ Problems
Pressure is mounting as companies cut personnel and operate with leaner staffs. And with stiff competition facing most business-to-business marketers, companies are having to make better decisions faster.
B2B marketers must get new customers at less cost while building strong relationships with current customers without the high costs.
That is why some B2B marketers unfortunately severely limit their activities to inbound marketing only, i.e. they attract new customers with inexpensive channels like blogs, social media or search engine ads and optimization, not willing to spend any money for outbound activities, i.e. pushing their products through various scalable-at-will marketing channels that could actually generate sales the management desires.
At the same time, more and more frequently the C-suite is requiring quantitative documentation that their advertising and marketing efforts are paying off. They are looking for proof of effectiveness and material contributions to the company’s goals and marketing objectives.
The fact that performance marketing is accountable and measurable is why it is moving into the B2B marketer’s spotlight. Costs can be directly related to sales. The goals of performance marketing are short-range because the prospect is motivated to take a specific action right away.
One of the big advantages of performance marketing for the small marketer is that its cost per prospect reached is not that much greater than that paid by the large B2B marketer.
The smaller B2B marketer may not be able to afford the dollars it takes for advertising in trade or business publications or business TV to build and maintain an image in a limited marketplace.
But with performance marketing, marketers of any size can affordably reach at least the most important segments of their target market with enough communications to make a substantial impression.
While performance marketing has emerged as an integral part of the overall marketing mix in many major B2B companies, it also generates huge amounts of valuable, money-making information readily and inexpensively.
For instance, you can easily obtain precise B2B customer profiles that help salespeople develop more pinpointed selling approaches. Also, customer buying cycle data improve the timing of sales follow-ups.
You can continually gather more and more information about your target markets – what your B2B customers buy, how much they pay, how often they buy, why they buy, and who makes the buying decisions.
As your database grows, so does your ability to pinpoint the right customers and prospects at the right time with messages that say the right things.
For the purpose of this guide, business-to-business performance marketing refers to any form of communication that is sent from the seller directly to the buyer and that employs some sort of response technique.
The terms direct marketing and direct response advertising are used often as synonyms for performance marketing. These terms refer to customers or prospects taking some form of overt action in response to a promotion, such as placing an order in the case of distance (“mail order”) selling, or signing up for a webinar for more information in the case of a sales support promotion.
A large part of the growing appeal of performance marketing is the opportunity that the marketer has to define objectives in realistic, measurable terms and then to test them.
Reactions can be measured for different offers, different messages using different audiences – all in small samples – before you are committed to a total campaign and a large expenditure.
However, performance marketing also involves other B2B promotions that provide an indirect response, such as the modification of attitudes or opinions, which result in direct action at a later time.
Since direct and indirect response campaigns support one another, the smart business-to-business marketer such as yourself should integrate both into the advertising mix.
These are six broad categories in which business-to-business performance marketing can be grouped:
B2B Sales Support
- Lead generation – to identify prospects among group of suspects.
- Pre-qualified prospect penetration – to bring together at a face-to-face meeting a salesperson and a prospect who has already been qualified.
- Awareness – to build positive customer and prospect perceptions and opinions toward companies and products.
- Reinforced selling – to reinforce the planned sales call.
- Research – to gather information.
B2B Direct / Distance Selling
- To sell directly without a face-to-face sales call
Growth of Performance Marketing in the B2B Sector
Performance marketing is not new for the business-to-business marketer. In fact, in 1900, John H. Patterson, founder of the National Cash Register Company mailed 6 million pieces of direct mail advertising to support his expanding field sales organization. He referred to direct mail as the ‘’strong right arm of selling.”
Over the years, the only use of direct mail for some B2B firms was to send copies of their print advertisements to customers to keep them informed. Some firms also mailed brochures, sales literature, or self-mailers as reminders or as information.
And then came the online media, platforms and tactics, including the obvious email, LinkedIn, webinars, sponsored content etc.
Many of these activities often seemed to have no clear objectives. And if any leads were generated from them (or any source for that matter), they were sent directly to the sales force for follow-up, with no qualifying procedures.
This B2B guide’s aim is to turn such ‘lazy’ marketing into performance marketing focused on measurable objectives.
Performance marketing continues to grow every year. Research shows performance marketing increasing at a faster rate than TV in terms of advertising dollars spent worldwide.
In the business sector, at least part of the attraction is that through performance marketing, the marketer has a medium that can communicate to buyers and influencers one at a time. It’s the “me-to-you”, one-to-one, personal medium.
However, before successful media and creative strategies can be developed, it is helpful for performance marketers to know the business-to-business differences when compared with consumer performance marketing.
B2B vs B2C Customers
The buying behavior of businessmen and businesswomen is different from that of consumers. In business purchases the average B2B sale is higher and often more complex.
Purchasers are more serious and act less on impulse. And they are more informed and knowledgeable about the products they buy. Business buyers are more careful about spending their firms’ money, particularly since they must justify their purchasing decisions to others.
Business buyers scrutinize your ad copy for performance facts, comparisons, “reasons why,” demonstrations, trial runs, and test results. Therefore, business-to-business promotional pieces get higher readership and attention than consumer promotions.
Accordingly, B2B online and offline formats and copy are less like advertising and more businesslike. Phone scripts are also more pinpointed, and communicators talk knowledgeably about the buyer’s particular line of business. The higher-ticket products allow for a higher contribution of dollars for performance marketing promotion.
Business-to-business marketers target their marketplace more precisely with all online media, emails, direct mail and phone calls. Database usage is usually limited to compiled and inhouse lists, except, of course, for marketers who have direct / distance sales objectives.
And even though there are many business lists available, the average market segment is relatively small. As a result, there is limited pretesting or testing (which is the foundation of consumer performance marketing) and rules of thumb often prevail.
The vast majority of business-to-business marketers operate with a small, unique customer base, some with as few as 50 customers and most with no more than 5,000 names on their customer list. And, of course, the nature of their products dictates that their marketing techniques be quite different from those used for a mass market.
B2B products are often conceived and designed for special technological needs and uses. They often produce highly profitable sales, but many of the products require a technically oriented marketing approach, and many require one-on-one contact with salespeople.
Determining Objectives of Sales Support B2B Performance Marketing
Sales support performance marketing is a particularly valuable tool for you as the business-to-business marketer, since it has a variety of uses and you can tailor it to meet any number of your promotional objectives.
A successful B2B sales support campaign implemented within the framework of overall marketing, sales, and advertising plans can help you reach that most elusive of goals – a program that represents the optimum use of all marketing and selling tools.
Before that goal can be reached, however, the you must have a thorough understanding of the uses of B2B sales support performance marketing.
Two essentials for creating successful performance marketing programs for B2B are:
- having the product marketing and sales objectives, strategies, and tactics detailed by B2B product and by B2B market and
- having the advertising and promotion spelled out before sales-support performance marketing planning is prepared.
If your marketing or sales objectives are not clear-cut, or are in flux, performance marketing efforts tend to go astray. Performance marketers specialized in sales-support, because of their early need for detailed product forecasts and market definition, often become the catalysts in getting marketing and sales management to finalize their objectives.
Marketing and sales functions must be formalized and commitments must be made before performance marketing strategies and tactics can be planned.
When you determine the objectives to be accomplished by B2B sales support performance marketing, you must look beyond the immediate marketing and sales objectives and analyze other operational areas of your company and your competitors.
A useful outline of key areas that you should investigate before establishing objectives is provided below:
1. Your B2B Products:
- All specific products or services, and their particular applications in each industry served.
- Principal sales points or competitive advantages for each.
- Their market acceptance: company’s share of each B2B market.
- Company’s special areas of capability which have a B2B market in the industry.
- Types of organizations using your products or services.
- Relative importance of each customer group, in terms of percent of the total B2B market potential.
- Seasonal trends for each significant market.
- Buying habits and buying trends in each.
- Types of individuals, by title and function, with direct influence on the evaluation, specification, or purchase of each product or service.
- General conditions and habits of mind surrounding purchase.
- Exact need fulfilled by the purchase: what are the needs, feelings, and desires involved?
- Preconceived ideas, prejudices, false or true notions which impede or aid the B2B purchase.
- Standing of your B2B products in the buyer’s mind.
- Main factors that limit your market.
- Production trend and outlook for next quarter, next year.
- Are new B2B products being developed? What? For which market or uses?
2. Your B2B company and its sales policies:
- Reputation: how long and well established.
- Do you sell through distributors, manufacturer’s representatives, dealers, company sales staff, or a combination of these?
- Number in each category.
- Exclusivity of representation policy, if any.
- Geographic emphasis of distribution and sales, if any.
- Seasonal emphasis of distribution and sales, if any.
- Any projected change in emphasis on areas, markets, or products?
- Price and discount policies: what and whether they vary from the industry’s policies.
- Are foreign markets important? Which?
3. Your company’s B2B advertising:
- Current detailed ad schedule – online and offline.
- Amount of current budget.
- Basis of its determination: percentage of sales, task accomplishment, or otherwise.
- Nature and size of various prospects databases: how classified, developed, and maintained.
- Size of each competitor’s budget, relative to his share of the market and relative to your own company’s budget.
- Major objectives of competitor’s advertising.
- Each competitor’s primary advantages in each B2B market.
After analysis most marketers realize that many sales-support performance marketing campaigns may be needed to accomplish different objectives for each B2B product in each B2B market.
Although there are dozens of ways that sales support performance marketing can be profitably employed, four major business-to-business uses or functions are those that were listed in before:
- Identifying qualified prospects from broad suspect markets – the most important and most prevalent use.
- Targeting pre-qualified prospects with an objective of getting customers and prospects to agree to a face-to-face meeting with the marketer’s salespeople.
- Aiming pure advertising communication at getting mind share or awareness level increases among target audiences with a specific end goal of getting the B2B product specified.
- Strengthening a planned sales call by providing specific support, usually in the form of emails or direct mail, to reinforce the salesperson’s activities with those prospects currently being called on.
This guide will examine these four major uses and the response techniques they employ. But first, here is a more comprehensive listing of uses for business-to-business performance marketing:
- Identifying market segments for targeting
- Securing leads for further follow-up
- Qualifying leads for a salesperson’s follow-up
- Reinforcing a planned sales call
- Maintaining contact with prospects between salesperson’s calls
- Further selling prospective customers after a demonstration or salesperson’s call
- Bringing potential buyer to sales office, seminar or webinar
- Building business relationships, goodwill
- Building company and product image
- Announcing a new product, new policy, or expansion
- Opening doors for salespeople
- Introducing a new product
- Researching products, markets, and competition
- Securing new dealers
Because the terms lead, inquiry and sales lead have been used interchangeably in the field of business-to-business marketing, there is confusion in the minds of many sales and marketing personnel.
Perhaps the best way to decide whether to classify a response as a lead or a sales lead is to make the classification dependent on whether the offer in the performance marketing campaign has pre-qualified the inquirer.
Qualified leads are identified by the extent to which they meet certain criteria; only then can they be said to have sales value and be treated as true sales leads. Not every lead can be considered a sales lead, since some inquiries will never lead to a sale.
For example, a small flow of leads continually arrives in any business-to-business company’s inbox from the general public, mostly from students and librarians seeking information. Marketers, being good corporate citizens, usually reply courteously to these inquirers.
Another nonproductive type of leads comes from competitors who seek intelligence to counteract competitive marketing strategy. Some marketers ignore this, while others actually exchange promotional materials within their industry.
The more highly prized leads come from promotional activities to current customers, or prospects who attend demonstration meetings or company-sponsored seminars. Some typical lead sources for the business-to-business marketer include (in order of value):
- Business trade shows, sales events – both offline and online
- Random “white mail” (no identifiable promotion source)
- Advertisements in trade and business publications – both offline and online
- LinkedIn ad and other online ads with highly targeted audience
- Product publicity
But Exceptions Prove The Rule: Highly Untargeted Traffic May Bring Results for B2B Leadgen
While strict targeting is the rule of thumb in B2B performance marketing, there are some marketers that seem to prove the opposite is true.
See the example below. It is a long form landing page which gets its traffic from general traffic networks like Taboola, MGID, Revcontent and Google Display Network (and based on the research / spy tools available these advertiser’s ads get a lot of traffic) and has rather light qualification on its lead form.
The offer concerns GPS vehicle trackers for businesses based in Australia. The leads collected on this page seem to be sold to a multitude of companies serving this B2B industry.
When a Lead Becomes a Sales Lead
A lead becomes a sales lead when the inquirer specifically states a desire to see a salesperson or attends a seminar, webinar, demonstration, or other sales event, or when field sales management or salespeople have agreed beforehand that a specified offer will produce a qualified prospect inquiry worth a personal sales call.
Focus group research interview sessions with typical field people can help you determine what the leadgen offer should be. A lead can also become a sales lead when it comes from someone easily recognized by name, title, or company as an important prospect that has use for the product.
The degree of value any sales inquiry will have in the minds of salespeople depends on their perception of how easily they can turn the inquiry into a sale. Some marketers have a firm policy stating that all trade and business publication leads, trade show inquiries, and raw email inquiries should be sent directly to the field organization for their follow-up.
They justify this action with the logic that salespeople are best equipped to weed out the non-prospects. Yet, this is a poor policy for today’s lead-generation programs, since inquiry qualification can be performed more effectively, faster, more thoroughly, and at less cost by self-qualifying lead generation offers, marketing automation rules or professional lead qualification personnel at a telemarketing center.
To get optimum closure rates you must give the salespeople more than the lead’s name and address. They need to know what the prospect wants and what is needed.
The better the prospect profile the marketer can give to the salesperson along with the lead, the better the chance that the salesperson will actually make the sales call.
Also, the more the salespeople know about prospects before the calls, the better they will be able to prepare more specific and successful customer presentations.
The best lead you can get are from prospects who request a salesperson to call because these prospects have identified themselves as being highly interested in what the salesperson has to say. If the prospects like what they hear the salesperson may be rewarded with an order on the first call.
The worst kind of leads are from those who do not even have an application for the product but want to see a salesperson anyway. These inquiries cost you greatly in the salesperson’s time and potential business he or she could generate instead of chasing a dead lead.
For some marketers there never seem to be enough good leads and there are almost always too many bad ones. The business-to-business lead generation program aims, of course, at getting a maximum number of the former and a minimum number of the latter.
Because the ideal lead cannot be generated in large enough quantities from a performance marketing campaign to satisfy most business-to-business marketers’ objectives, they aim for a lead of lesser quality to be qualified in a subsequent step in the lead-generation program.
Actually, for many performance marketers this can be the most profitable strategy in the long run.
You have a number of tools available with which to fine-tune the quality of responses to a given campaign. The target audience or the prospects database are one of the most important qualifiers. Other techniques, such as lead hardeners and softeners or telemarketing activities are also effective.
Target Audience, the Database or “the List”
For any direct response campaign, the more qualified the audience is to begin with – that is, the more demographic, geographic, and behavioral information requested – the greater the number of quality leads that will be generated.
However, the lead-generation experts usually find that the more qualified lists are more expensive to assemble from the list rental market and also, of course, are smaller in size. The same applies to Facebook or LinkedIn ads.
Business-to-business marketers have a wide range of market segments available to them in the lists they can rent or compile. At one end of this range are very general groups of businesses with few, if any, characteristics that match those of your best customers.
At the other end are selected lists of prospects who have a high degree of “best-customer” geographic, demographic, and behavioral characteristics (such as number of employees, annual revenue, standard industrial classification [SIC in the US] category, and sometimes even past purchase types and amounts).
Companies at the high end of the range are, as may be expected, labeled as more highly qualified prospects. Leads that result from promotional activities to these groups have the best chance of meeting the criteria that sales management has established for a good sales lead, thus eliminating the need to further qualify the inquiry before passing it on to the sales force for follow-up.
It has been established that when a marketer directs its campaigns randomly to a non-qualified mass suspect B2B market list with little regard for prospect characteristics (except they may all fit within a two-digit SIC code), the inquiries that result will have a lower sales close ratio than those from an identical campaign to a list or list segment that contains numerous characteristics of the “best customer profile.”
Business-to-business marketers use lead softeners to improve response from lead generation campaigns. They accomplish this for the most part by making the lead generation offer, message, and call to action less selective and more personal.
Regulating the value and importance of the lead generation offer to the prospect has the most impact on who responds to a campaign. The more general the leadgen offer, the less chance it has of attracting a narrow audience that may have specific goals.
Premiums and giveaways used as B2B leadgen offers, especially if they have significant value, can increase the number of leads that result from a direct response effort.
Premiums, or contests and sweepstakes with worthwhile prizes that are independent of the lead generation offer, can be an extra incentive that can hype response. In the context of B2B sales support performance marketing, such softeners are only practical when used in campaigns to highly qualified or pre-qualified databases of prospects.
Offers of free literature, especially industry-generic and product-generic, relate only to the prospect’s broad interest and bring in the softest inquiries.
Although the lead generation offer is virtually always the most influential of all the lead qualification strategies, the creative interpretation of the lead generation offer in the campaign can maximize or minimize the effect that it will have on the prospect.
Also, the reader’s or user’s perception of the value of a lead generation offer can be enhanced or diminished depending on the emphasis placed on it by the copy and graphics.
Dedicating the entire copy/graphics message to only the lead generation offer will usually increase responses.
How the lead generation offer is integrated into the message also helps control the response action. For instance, in an attempt to fine-tune for the optimum quantity/quality lead mix from a campaign to a broad suspect list, you may harden a soft primary lead generation offer of a free industry/generic book by burying the offer halfway or three-quarters of the way into the copy.
This technique tends to focus the value and impact of the lead generation offer or premium on those in the audience who are the better prospects – those who show enough interest in the subject message to continue to read much of the message.
More responses usually result from lead generation campaigns that do not elaborate on the product or service. They only whet the reader’s appetite for more information.
Calls to Action
Business-to-business marketers commonly use the following action response softeners to make it simple and convenient for readers to respond:
- Use of the prospect s name and address on the reply card offline or the prepopulated form online.
- Limiting the lead generation offer to only one option. The fewer decisions the reader is asked to make, the better.
- Asking for the least amount of personal and company data possible.
Lead hardeners are, in most respects, the reverse of lead softeners. The following hardener techniques in lead generation offers, messages, and calls to action produce fewer leads but are more likely to turn into a sale.
The more relevant the lead generation offer is to the product or service, the better the lead. Literature with a highly specific title connected to the product will attract only those readers who are interested in that narrow subject. Also, asking a prospect to pay for a descriptive booklet or ebook discourages freebie literature seekers and singles out the serious prospects.
For prospects to qualify for a free survey or analysis you may include on the lead form a series of questions for the prospect to answer. Of course, only higher quality hard inquiries result from this lead generation offer technique, especially when the answers are confidential. The lead generation offer to “have a salesman call me at this number on this date” is the ultimate hardener.
In fact, any mention in the lead generation campaign that a salesperson will call in response to the inquiry will turn off many would-be responders, including some highly interested and some mildly interested prospects.
However, those who do respond, who know they will be called on by a salesperson, are probably at a critical stage in their buying behavior cycle. Exceptions prevail when high value premiums are prominently offered.
The more product features, functions, and benefits described in the lead-generation campaign, the higher the quality of the lead that will result.
When descriptive product application and case history ebooks or booklets relevant to the prospect’s business are included on the landing page or in the mailing package, response will be limited mostly to those serious prospects seeking additional information.
These prospects are closer to the threshold of taking buying action. The mention of price also is a powerful lead hardener.
Calls to Action
Making it difficult for a prospect to respond reduces the number of respondents to those most persistent or those with an urgent need. Asking prospects to request more information on their company letterhead, by sending an email or speaking by phone to a live person can slow leads to a trickle, resulting in very hard, high-quality inquiries.
Other deterrents to response that have the effect of raising lead quality include:
- The use of a form that requires prospects to enter their full names, addresses, and phone numbers, detailed company information or budgets.
- The use of multiple-option offers in the campaign, which hinders readers’ decision making.
- Generally, the more options the fewer the responses.
To some marketers, the use of lead hardeners and softeners may mean that leads from a campaign can go directly to the salesforce without further qualification, and will result in an acceptable sales close rate and cost.
But for other performance marketers it may mean that leads will have to be further qualified by telemarketing, additional online and offline follow-ups, or fulfillment package second offer before being passed on to the sales force.
B2B Telemarketing & Leads
The basic functions of telemarketing for lead qualification are to eliminate all nonprospects who have responded and to rank all prospects by degree of quality. This task should be performed by experienced outbound telemarketing agents who call leads to ask very specific questions.
The answers they get will determine whether the lead is worth more follow-up by different online and offline media or a phone callback at a specified future time, or if the lead would be receptive to a visit by a salesperson.
Following are some key pieces of information that the B2B telemarketing representative should try to identify:
- If the prospect intends to buy a particular product or service within a specified time period
- Who the key decision maker is within the prospect organization
- The size of the budget and whether it has been approved
- The prospect’s application for the product
- The prospect’s familiarity with the marketer’s complete product line
- The competition under consideration
- Past use of product or similar products
- Purchase objectives
- Purchase selection guidelines
- Interest in testing the product
- Need for salesperson to call
- Actual commitment to see a salesperson
Trained B2B telemarketing representatives, prepared with the right questions and replies to the inquirers’ responses, have the best chance of eliciting a vast amount of meaningful information.
This information not only can be passed directly on to salespeople for pinpointed follow-up but also enhances the your prospect database.
The Second Qualification
Some performance marketers rely on the fulfillment package to further qualify leads. Designated lead generation offer material (free book or ebook, webinars, brochures, samples) and another call to action are directed to those leads who have responded to specific lead generation offers in lead generation campaigns.
The purpose of the second lead generation offer is to single out the more highly interested prospects. Prospects who respond to this fulfillment lead generation offer are then passed on to the salespeople as double-qualified leads.
The number of leads that become qualified in this way will depend on the following key factors:
- Information given to the reader in the fulfillment material. It must be persuasive, believable, and include enough facts to identify responders who will be seriously interested.
- The amount of information the prospect is asked to provide in the lead form. Generally the more information requested of the reader, the fewer responses will be generated. Those returned, however, will provide valuable prospect profile data that identifies potential buyer status.
- Additional follow-ups (emails, direct mail, SMS, phone, retargeting, robocalls etc.) to those leads who have not responded to the second lead generation offer. You can almost double the number of leads you are able to qualify by making just one additional follow-up after the initial fulfillment of the lead. Even more qualified leads will be generated when leads are followed up multiple times with highly personalized copy or with truly personal, in-depth telemarketing techniques.
Pitfalls of Locally Controlled B2B Leadgen Programs or Sales Rep-Driven Leadgen Attempts
Some performance marketers encourage their field sales offices to initiate their own lead generation programs locally.
Email templates, phone scripts, direct mail letters may be sent to the salespeople by the home office containing guidelines on how and when salespeople may want to use them in microcampaigns sent from their local offices.
Aside from furnishing the communication, there is minimal intervention from the home office’s performance marketing department.
From my consulting experience, about 10 to 15 percent of sales organizations have had success with this method. These salespeople know how to canvass by email, direct mail or LinkedIn messages, as well as communicate with current customers with the objective of keeping them sold.
They instinctively know how to prepare their own marketing communications and when to use it regardless of who controls the system.
But most salespeople have little aptitude and little time for creating sales-support promotional pieces, especially when it comes to fully-fledged campaigns that involve media buying. Most find it much easier to make phone calls than to write good copy.
The most common reason locally controlled lead generation programs fail to get the results expected is the lack of expertise of the field sales force in performance marketing philosophy.
Choosing a lead generation offer, developing a creative approach, and securing an audience to send it to may, on the surface, appear relatively easy to do, but one major mistake in any of these three areas can render the whole effort valueless.
The typical email or direct mail originating from a sales office is a long-winded letter, most often having multiple objectives. Although these letters purport to have lead generating objectives, they often more closely resemble sales presentations and image builders rather than B2B prospect identifiers.
Poor results also follow if the letters are sent to the wrong market segments or if a field salesperson rewrites materials professionally created by the advertising agency or headquarter’s staff to fit his or her particular audience.
This same lack of expertise is usually why there is no feedback on results. It is a major weakness of a system that is not controlled by a central coordinating responsibility.
Pre-qualified B2B Prospect Penetration
Some leads who want further information by email, mail or phone but do not want to see a salesperson (or want to maintain a low profile for other reasons) may still be excellent prospects.
Especially when qualified by salespeople, these leads are logical candidates for pre-qualified prospect penetration, or door-opener campaigns. These campaigns attempt to set up serious face-to-face situation meetings between the salesperson and the prospect.
It is important that you distinguish between a highly qualified list of prospects and a pre-qualified list of prospects.
Highly qualified prospects have not yet expressed an interest in the your offer, product, or service, although they have the credentials in their profile that make them better than average candidates for sales.
Campaigns to this group are to identify interested prospects, as discussed before.
Pre-qualified prospects are lists of proven and true prospects because they responded to a previous contact through email, direct mail, online ad, phone, trade show, seminar, or personal visit in ways that identify them as good potential customers.
These are pre-qualified as key prospects, but for one reason or another, the salespeople have not been able to move them forward in the B2B buying process.
Even though pre-qualified B2B prospects may be few in number in any sales territory, their potential value to you can be extremely high. Since this group of prospects does not respond to standard lead generation offers, you are challenged to use campaign techniques that overcome the barriers that prevent the salesperson from setting up a face-to-face meeting.
A series of three or more high-impact dimensional direct mail (“lumpy mail”) is most often used to get needed attention and readership. The cost per prospect for these direct mailings and accompanying phone follow-up is usually very high, especially when compared to lead generation online campaigns or plain emails.
However, resulting incremental sales can net you 50 times their promotional cost. Thus it is possible you willingly will spend shocking $50 to $100 per prospect to implement the campaign.
Awareness Performance Marketing
Use of performance marketing in business-to-business extends beyond lead-getting functions into a relationship-building marketing. Although not as popular as direct response strategies, it can be very effective in building mind share through continuous (and measurable) campaigns that foster solid relationships with customers and potential customers.
Awareness performance marketing is pure advertising that targets individual B2B prospects with pinpoint accuracy with performance marketing media and tactics to accomplish its objectives.
Whenever there is an objective to get a greater share of mind, there is an opportunity to use awareness performance marketing. Indeed, a continuing long-range objective all marketers should have is constant communication with their B2B customers and key prospects to help salespeople establish and maintain healthy, long-term buyer-seller relationships.
The need for awareness campaigns is highlighted by the fact that the customer and prospect marketplace has a short memory. Of the many studies done on “forgetfulness,” one survey of manager’s recall of advertisements shows that messages could not be remembered by 73 percent of the readers even with aided recall after 21 days.
Continuity is the key to its success. Awareness campaigns are scheduled emails, retargeting campaigns or even direct mail etc. Almost always in a series, usually no less than three in a three-month period. For example, weekly, biweekly, or monthly mailings for longer periods are best for many sales objectives.
General advertising goals for increasing awareness are mostly based on the reach and frequency parameters used in broad-based advertising planning. This kind of mass communication is too costly for business-to-business use.
Therefore, some B2B marketers prematurely dismiss the employment of any awareness advertising tactics or stick to placing ads in business publications and sponsored content online.
And, indeed, the cost of an advertisement per thousand (CPM) in a business publication may be ten times less than the cost of each thousand pieces of old fashioned and expensive direct mail.
But the cost per reader is the key figure. The comparison of the readership of business publication ads, search ad and direct mail advertising shows that the cost per prospect reached in terms of readership can actually be less for direct mail.
|Business Publication Ad||Online Search Ad||Direct Mail Shot|
|Circulation: 100,000||Clicks: 100,000||List: 100,000|
|Paid circulation: 50,000||50% chance your landing page will get read: 50,000||Delivered names: 95,000|
|20% chance your ad will get noticed: 10,000||Cost per click for a keyword with medium competition: $1,50||80% chance the enveloped will get opened: 76,000|
|20% chance your ad will get read: 2,000||Cost for ad: $150,000||80% chance the letter will get read: 60,800|
|Cost for ad: $10,000||Cost in the mail: $1,000 CPM or $100,000|
|Cost per reader: $5.00||Cost per reader: $3.00||Cost per reader: $1.64|
Awareness performance marketing is used most often to supplement other advertising programs. These campaigns, including broad online retargeting campaigns, may be directed to all those best prospects in a sales territory who someday may be customers or sent when you want to ensure that specific sales messages get read by highly important segments of the B2B marketplace.
Awareness campaigns are also sent to key customers and prospects located in geographic territories. Since trade and business publications or web portals do not have regional editions, you can fill this need for image or product advertising with awareness performance marketing campaigns.
Smaller companies that do not have broad (i.e. national) distribution find that advertising in national or large publications or websites is wasteful.
Awareness performance marketing may be the only appropriate medium for these marketers since they can target any geographic or demographic segment they wish.
Such awareness campaigns do their job best when sent to narrow and very selective target markets.
For instance, an electrical components manufacturer may have a prospect marketplace of 30,000 consulting engineers targeted with a new product advertising program consisting of an eight-time ad schedule in one business and two monthly trade publications.
An efficient buy for the marketer may reach 80 percent of the marketplace four times. To make sure that the most important people do not miss the ad messages, product-awareness campaigns containing similar messages may be sent to those 300, 1,200, or 5,000 key customers and prospects as added promotional support.
Before-and-after surveys measure the impact of an awareness B2B program. A representative sample of the audience used for the campaign will be asked questions that relate to the message before the campaign is started.
The same questions are then asked of a different sample after all the promotional pieces have been received by the prospects. The changes in the responses from the first to the second survey can usually provide a reasonable measure of the impact of the campaign.
Reinforced Selling Programs
Another use of performance marketing that works well for the business-to-business marketer is to reinforce a planned sales call. Precall and postcall campaigns to prospects increases the salesperson’s productivity on each face-to-face sales call.
The objective of reinforced selling performance marketing is based on what clinical psychologists have learned – most lasting impressions are received through the eye rather than the ear. Prospects are far more likely to remember what the salesperson has said when they can also read about it.
This reinforced selling technique enables a salesperson to keep the number of contacts per prospect high while keeping the number of actual sales calls to a minimum, thus helping to control the cost of selling.
At any point a salesperson has about ten, fifteen, or perhaps twenty-five good potential customers to call on with the ultimate goal of closing a sale with each one.
These are the salesperson’s best prospects, many coming from lead generation efforts. Under pressure to meet and exceed sales quotas, the major portion of the salesperson’s time and energy goes into selling efforts on those prospects.
B2B salespeople employ all available tools and resources that can assist in bringing those potential sales to a close. To presell the prospect some send letters, emails, PowerPoint slides, or literature with background information and reasons to buy the product.
And salespeople also communicate with current customers with the objective of keeping them sold.
These individual efforts can be strengthened with a planned program of continuing B2B sales messages that reinforce in writing what salespeople communicate to the prospect during their sales calls. These campaigns are particularly helpful when:
- Products require a great deal of technical explanation.
- A salesperson must make many calls a day to low potential prospects.
- Weak sales territories need to be strengthened.
- Prospects are in remote geographic areas.
Some companies prepare dozens of different sample emails or letters to cover many selling situations. These are in the form of templates for the salesperson’s reference. They provide salespeople with professional guidance and ideas for them to adapt in the preparation of their own materials.
The most successful reinforced selling programs are those centrally organized and integrated into the marketer’s long-range strategic marketing plan as well as properly optimized for best performance.
Structuring an Effective B2B Lead Generation Program
There are a number of key factors you must analyze when structuring a lead-generation program. These are:
- B2B prospects’ buying behavior cycle
- Number of leads to generate
- Campaign frequency
- Acceptable cost per lead
- Acceptable promotion and selling cost per sale
- Buying behavior cycle
A primary objective of most lead-generation campaigns is to select from the customer and prospect marketplace those who are at the stage in their buying behavior cycle when it would be most appropriate for a salesperson to make a call.
This will vary depending on your selling strategy. At any point in time, decision makers are at one stage or another in this cycle.
(For supplies and similar products, of course, the B2B marketer knows the prospect has a continuing need that is filled through ordering schedules triggered periodically.)
It is important for you to recognize the various stages and apply the most favorable performance marketing programs to develop leads:
- Need. The cycle usually starts when decision makers begin to realize they have a need for the product or service. It is possible that an appropriately convincing promotional piece followed by an equally convincing telemarketing call could be what provoked a prospect into realizing he or she has a need. However, establishing a need in the prospect’s mind is not the objective of business-to-business lead-generation campaign. Developing what amounts to primary demand for a product or service requires time and is usually most successfully initiated by market leaders. Awareness performance marketing and advertising campaigns most often assist in getting this job done before lead-building efforts begin.
- Want, The want stage develops when decision makers realize some action will have to be taken at a future date. This is when prospective B2B buyers think generally about what the want is and what must be done to satisfy it.
- Covert action. During the covert action period decision makers get serious, seek information, and develop approximate purchase timetables.
- Overt action. The overt action stage begins when the decision makers get to the threshold of taking buying action. This occurs when they start talking to suppliers and vendors, arranging for proposals and quotations. Salespeople really appreciate sales leads that identify specific prospects who are at this stage – those who are serious and ready to buy.
For complex industrial products or systems, the realization of the need might come a year or even two before buying action is taken. And for others, buying action may come six months or only one month after the need is realized.
Sophisticated B2B marketers prepare their own marketplace buying behavior analyses for their own products. You should lean on these to come up with the kind of lead generation offers, copy approaches, and formats needed to generate the right number and quality of leads for the different stages from their specific target audience segments.
Some B2B products dictate the need to get salespeople into the prospect’s place of business as early as possible in the cycle, when the decision maker first identifies the want. Aggressive use of performance marketing including telemarketing, integrated with personal selling efforts of field salespeople, can accelerate the movement of the cycle.
Different kinds of lead generation offers will identify prospects at different stages. If you want to provoke response from decision makers early in the cycle – those who have recently found they have a need for the product or service – some generic or elementary but pertinent information can be chosen as the lead generation offer.
When leads come from potential first-time users of the product, chances are they will be looking for some basic information found in ebooks or booklets and general sales literature that discuss benefits and functions. When further along in the cycle they seek more specific “Here’s what we can do for you” lead generation offers.
B2B performance marketers who sell high-cost products, such as complex hardware and software systems that involve a lengthy selling process, will include lead generation offers of surveys, extensive demonstrations, proposals, and trial runs to get leads coming in at the early stages of the buying behavior cycle.
That is when many of these decision makers lock in their choices of vendor candidates, and for some B2B marketers it pays to be involved that long. But, for performance marketers of lower-priced B2B products, the selling expense is prohibitive.
These marketers need to identify in their marketplaces those buyers closer to placing an order. A product-specific or company-specific lead generation offer will bring in that type of inquirer.
Lead Generation in a Lead-Building Program
The development of too many leads for a sales organization to follow results in irritated salespeople, and even more damaging, mishandled customers and prospects.
For some organizations, especially those selling high-ticket B2B items or systems that involve a great amount of presale or postsale time, leads can be followed only when time permits. As many leads as can be handled without waste should be the goal.
Sales managers are in the best position to tell the lead-generation managers at your company the number of sales leads that can be handled adequately in individual sales territories because they know the salespeople’s capabilities, which can vary widely within a company as well as from one company to another.
The better salespeople are much more adept, of course, at converting leads into sales.
A survey of field sales management needs by the lead program specialists is a vital preliminary step in lead-generation program development. This survey should spell out specific lead generation offers and creative approaches that generate a range of lead quality.
The survey should also focus on the differences of lead costs and how they relate to quantity versus quality. Salespeople themselves are usually not that interested in lead costs or promotion costs per product sold since they do not control the profit center.
But the sales manager is interested. The lead program manager and sales management must agree on the specific lead quality that will result from the response promotions and qualification procedures.
An effective method of getting sales management’s understanding and agreement on the optimum level of lead quality is to present a half dozen or more landing pages, online ads, email campaigns, LinkedIn inMails or ads etc. with different lead generation offers ranging from high to low quality and forms with different amount of input data required, and then to review each with field sales managers, asking which in the array would produce a sales lead that the manager would accept.
Without this input the planner may have difficulty committing to a specified number of the kind of leads the field sales force would want for follow-up.
Campaign Frequency and Capping
It is important for B2B marketers planning their lead generation programs to know how many times emails, direct mail or online ads can continue to produce profitable responses from the same B2B prospect marketplace.
The only sure way to determine this is through experience or testing various time intervals. The frequency of lead generation campaigns may be influenced by interest turnover of the product.
Normally, products in their introductory stages develop more marketplace interest. When the product’s life cycle is in the ascent or descent stage, it is difficult to get a good reading on the number of campaigns that can be made during a predetermined future period.
Most expendable products such as business supplies have high interest turnover. Here buying frequency is greater since purchases are made perhaps every few months.
Another reason buying frequency and interest turnover can be high is because every week in every B2B market there are those buyers who are unhappy with their present supplier.
However, performance marketers who sell high-cost, long-term-use products, such as scientific or multipurpose IT systems, naturally find buying frequency low.
Interest turnover of a B2B product is also affected by personnel changes in prospective customer companies. New replacement buyers are eager to investigate new sources and respond positively to leadgen offers.
Analyzing the Cost Effectiveness of Lead Generation Programs
For some B2B marketers the cost of generating leads, along with accompanying selling costs, may be too high to sustain an ongoing lead-generation program. Therefore, determining the feasibility of such a program must be done for each major product family at an early stage.
Some B2B marketers are able to generate acceptable leads from online and print business publications on a continuing basis. However, email and direct mail is the predominant medium for most smart business-to-business marketers for lead generation.
Before implementing an ongoing program you should first look at:
- Cost per lead (CPL) per traffic source and campaign. Different media and creative may bring different results. The CPL of one traffic source may be only about one tenth of the cost of a different traffic source. So be sure to measure your campaigns constantly.
- Closure rate or conversion rate (CR) from leads to sales. It takes more than one lead to make a sale. The closure rate is dependent on the quality of the sales force as well as the quality of the lead.
- Average unit selling price of the product. This figure is the average amount that comes from one sale as a result of the promotion.
- Earnings per lead (EPL) per traffic source, i.e. total sales generated minus sales cost. Supplying this information live to your agency or media buying team enables a steady, profitable flow of fresh leads.
In some companies an average sale may consist of three or four product or service units and include accessories, supplies, support or implementation training. For others a single product per sale may be average.
There are many products that cannot be sold profitably by salespeople even with a sales lead program because the selling price of the product cannot cover selling costs and allow a profit.
Example: Although direct mail has had a reputation of an old fashioned and extremely expensive medium, it may be very profitable especially nowadays, when prospects inboxes are flooded with both sales/marketing promotions and internal emails.
See below for a simple simulation:
|Unit selling price||$9,000|
|Sales calls needed to make a sales (leads/sales conversion rate 1:8)||8|
|Lead response expected (2.4%)||24|
|Total mailing pieces needed to produce required 3 leads||1,000|
|Direct mail cost per thousand (CPM)||$1000|
|Direct mail lead cost per sale||$333.33|
|Lead cost as a percentage of selling price||3.7%|
|Cost of personal sales call||$245|
|Calls needed to convert 10 leads into 1 sale (8 + 2 extra)||10|
|Sales reps cost||$2,450|
|Total sales and lead cost||$2783.33|
|Selling and lead cost as a percentage of unit selling price||31%|
For example, as shown above, you may get a 2.4 percent response on a $1,000 per thousand direct mail effort, and a closure rate by the salespeople of one sale out of eight inquiries.
Computed on an average unit sale price of $9,000, this promotion would result in a direct mail cost per sale of $333.33 or 3.7 percent of the unit selling price.
On the surface, this appears very good until the cost of the salesperson’s face-to-face follow-up calls is included. If $245 is assumed as an average cost of a salesperson’s call, a total of $2,450 in selling costs would have to be allocated for the sales calls on eight prospects to find the one who will buy, plus two more calls needed to complete the sale.
In this example it is obvious that it takes a total of $2,783.33 in promotional and personal selling costs to sell one $9,000 product ($2,450 plus $333.33).
That amounts to 31 percent of the selling price.
The personal selling effort is the dominant cost as it is in most lead-to-sales equations. Cost of selling is the largest single item of expense for many marketers today.
(The $245 a sales call here is based on a $50,000 annual salary and an average of 17 meaningful sales calls a month that an average salesperson could execute).
In the example the personal selling cost could no doubt have been cut in half by using telemarketing lead qualification. If all direct mail leads were qualified by phone with an objective of weeding out the worst half before sending them to the salespeople, one sale out of four leads could be expected.
And this could have been accomplished with an additional cost for qualification of about $15 per lead, or $120 per sale, resulting in a selling and lead cost going down substantially.
The degree of qualification is critical here. If qualification standards are too high, conversion rates will improve substantially, but the number of resulting sales leads will be very low.
Of course, identifying specifically the better half of leads is not the only way, nor is it necessarily the best way, to use telemarketing qualification strategy.
Most marketers consider it more practical to establish specific telemarketing and email qualification criteria that will single out the optimum quality/quantity sales leads to be turned over to the sales force.
Ultimate refinement of the leads through qualification techniques can theoretically disqualify all leads except those ready to make a purchase, giving the salesperson following up a 100 percent hit record.
However, you should not screen the leads so finely that prospects who are close but not at the buying threshold never get exposed to the selling talents of the salespeople. This would, in effect, render the salesperson little more than an order taker.
- B2B marketers must analyze products and markets as well as current marketing, sales, and advertising objectives. The major uses of sales support performance marketing are:
• Identifying prospects
• Getting pre-qualified prospects to agree to a sales call
• Building company and product awareness
• Reinforcing a planned sales call
- Leads must be qualified by meeting certain established criteria to increase their chances of being converted into a sale when in the hands of a salesperson. Even though there are many business lists to choose from, the more qualified lists are smaller and more expensive to assemble. You can fine-tune your campaigns by using hardener and softener techniques that will generate the optimum quantity and quality of inquiries.
- Telemarketing lead qualification gets a vast amount of meaningful information from the prospect. This determines the quality level of the inquiry, and when sufficiently qualified, increases the salesperson’s interest in following up.
- Before planning an ongoing lead-generation program, the business-to-business marketer first makes an analysis of key factors:
• Quality of inquiry to be identified
• Prospect’s buying behavior cycle
• Number of sales leads to generate
• Campaign frequency
• Acceptable promotion and selling cost per sale
- Indirect-response sales-support performance marketing helps sales people maintain healthy long-term buyer-seller relationships through awareness performance marketing activities to build name and product awareness in key target markets.
- Reinforced-selling marketing programs help reduce the cost of selling by supplementing personal sales calls to prospects who are close to the buying threshold.