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“Life is pain. Anyone who says differently is selling something.”
— “The Princess Bride”
Every week, dozens of new marketing software programs come to market, in addition to the four thousand that already exist.
Added to these programs are the many different marketing approaches that are being promoted by consultants and service providers: search marketing, social media marketing (and its sibling, social selling), real-time marketing, content marketing, remarketing, email marketing, mobile marketing, conversion optimization, predictive analytics, native advertising, video, one-to-one marketing, database marketing, account-based marketing, and on and on.
The claims of many of these programs and approaches are strikingly similar: We help companies reach customers where they are today. We can improve your results by 50 percent or 2X or 3X, or better! We’re the one you need to bet your business on.
Partially as a result of this excess of options and claims, and partially for other reasons, the adoption of modern, data-driven marketing and marketing technology has been very slow. My research, and that of various analysts, shows that many important programs and approaches have barely cracked the “early majority” of the technology adoption curve.
Take inbound marketing as just one example.
If you’re new to the term, then you’re probably still doing display ads, direct mail, TV, radio, cold calling, and other forms of “outbound” marketing and sales. Inbound marketing is the use of helpful or entertaining content designed to attract prospective customers to a company. The content, in the form of webinars, market briefs, infographics, blog posts, videos, events, etc., is so valuable that individuals are willing to give their contact information in exchange for it. They can then be contacted by sales — if they are qualified as being in the right position in the right kind of company and having an immediate need to buy. If they aren’t interested in buying just yet, they are placed into “nurture” campaigns that may include emails, remarketing ads, and event invitations, providing them with more useful content until they are ready.
The inbound approach, or at least the name, originated with HubSpot, and it has many good things going for it, which is why it has become very popular. But it won’t work for all companies. First, there’s the issue of how to distribute and amplify your content. With billions of web pages on the Internet, a company has to be very diligent – and lucky — for its content to appear high enough on page one of Google’s search results to drive significant website traffic and leads. Social sharing only goes so far. HubSpot itself reports that it created 734 videos alone last year! How many companies can do that?
And while content marketing can be effective in some industries in which few vendors have yet to adopt it, in other industries, most new content drowns unnoticed under a tsunami of competing content — a problem that has been called “content shock” by Mark Schaefer.
As a result of these and other factors, inbound is highly inefficient for many B2B companies. If you work through the data that HubSpot itself provided for 2013, you can see that about 540,000 new inbound contacts led to about 3,500 new customers — that’s a contact-to-close rate of just .65 percent — that’s not 65 percent, that is 65/100 of one percent.
HubSpot also reports that its customer acquisition costs almost doubled from $6,671 in 2011 to $11,977 in 2014. It has never shown a profit.
It’s not alone.
Jim Williams, vice president of marketing at Influitive, reports that only .25 percent of new contacts become customers. He says “These stats are actually quite common for high volume inbound funnels.”
Indeed, they are. When I mentioned these numbers to an analyst at a B2B research and advisory firm, he responded “If not worse.”
In contrast, the 1-2 percent rate of appointment setting from cold calling suddenly doesn’t seem so terrible.
So inbound marketing doesn’t work so great for all companies. But for others it does. If you’re in a relatively new technological field, where people are looking for content online, and you don’t yet have a lot of competition in the content marketing space, it can be very effective. Some practitioners, in various industries, claim that despite its inefficiencies it’s still the most cost-effective marketing program that they’ve found.
Marketing is not one-size-fits-all.
So how do you get past all the competing claims and figure out will work for your company?
Go in realizing that the rewards from modern, data-informed marketing can be considerable, but the effort will be too. There is no silver bullet. While any of these approaches can make a substantial difference for some companies when executed properly, very few are applicable to all companies. They’re certainly not whole products, making their adoption and integration more complex. And companies new to them may have to deal with staff skills gaps and conflicting budget priorities.
- Define your goals. Are you trying to build your brand? Generate more leads? Have you even defined what a qualified lead is for your company? How are marketing and sales going to work together on these programs? What metrics are most important to senior management?
- Figure out where your customers are. While many consumers are active in social media, especially Facebook, in many B2B industries the executives are not. If that’s your target market, then tweeting and social selling are not likely to be very effective; account based marketing may make more sense.
- Are you selling a product or service that people search for information about? If yes, then content marketing, SEO, and inbound may make sense. So might predictive analytics combined with your CRM. If not, you may need to work on the influencers instead of investing heavily in content and search marketing.
- Find out where your competitors aren’t. While you may need to be in the same publications and trade shows as your competitors, if there are too many of them in attendance, you can just get lost in the clutter. The first company in an industry to blog typically has a big advantage, the 100th company not so much — unless you have truly remarkable, unique content. Over time, many marketing channels become less cost-effective. It’s hard to get high page one search engine ranking in an industry with hundreds of content creators. Advertising rates go up as more and more companies are competing for a limited amount of inventory. Be cognizant of the first adopter advantage and don’t copy your competitors, beat them to the punch. Be where your customers are and your competitors aren’t.
- Think cross channel. Too many companies focus on just one or two channels – like social media or TV or display ads. Customers are typically moving across many channels and devices. And these days, a majority of those interactions may be on mobile devices. It usually takes multiple impressions to be memorable and to prompt a person to act. Companies using inbound also often employ account-based marketing, remarketing, teleprospecting, paid search, and other forms of outbound marketing and sales.
The biggest companies typically do considerable marketing. It’s not that they started when they got big; they grew because they marketed. Marketing works when done well, but it takes a lot of work. And it’s never been more complex.
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