Co-authored with Bonnie Crater, CEO, Full Circle CRM, Inc.
B2B marketing is evolving faster than ever. In many ways, however, B2B is still many years behind the sophisticated marketing measurement that has already been implemented by companies that sell to consumers. Luckily, thanks to the rise of customer relationship management, marketing automation and big data tools, B2B marketers have the opportunity to start catching up.
4 reasons B2B is so far behind
Let’s take a look at why B2C marketing is more advanced in marketing measurement and budget optimization than B2B.
1) First, B2C purchases are usually smaller and more numerous than B2B. Sure, consumers buy big-ticket items like yachts and luxury cars, but those items still pale in comparison to the six-figure-or-more enterprise deals that can make or break careers in B2B.
2) B2C sales cycles are shorter than B2B. Sometimes they’re even driven by a single customer touch, such as a coupon or an email, which makes attributing ROI much easier. Compare that to the average B2B sale, which requires five to 10 customer touches. This complexity makes campaign influence attribution much more difficult.
3) B2C buyers are typically individual decision makers, influenced by maybe one or two others, such as a parent or a spouse. B2B buyers, meanwhile, make purchasing decisions as part of a committee. According to the CEB, the average B2B decision-making group includes 5.4 buyers from a wide variety of roles, teams and locations, and that number continues to rise.
4) B2C marketing and sales teams are one and the same. Meanwhile, B2B companies must navigate some very murky waters to ensure there’s a smooth lead handoff from marketing to sales. In an increasingly data-driven environment, the fact that sales and marketing operate as two separate systems tends to complicate analysis for B2B marketing teams. This is especially true in organizations where there isn’t a close working relationship between the two teams and data isn’t freely shared (sales and marketing alignment: the struggle is real!). Marketing operates in the marketing automation system and sales operates in the CRM system. These data silos can prevent marketers from seeing the big picture.
Clearly B2B marketers face significant challenges compared to their counterparts in B2C. Fortunately, the situation is not as dire as it may seem – if you borrow the right tactics from consumer marketing teams.
Cohort analysis to the rescue
In the B2C world, it’s commonplace for marketers to group orders together, categorizing sales and conducting cohort analysis on those groups to identify common customer characteristics. When applied correctly, cohort analysis can be an incredibly powerful tool that generates amazing insights into customer behavior.
As business-to-business companies gain greater access to marketing and sales intelligence solutions, one of the most effective strategies for getting ahead is to apply cohort analysis to their data. Using cohort analysis, B2B marketers can gain a better understanding of how campaigns perform as they move through the sales funnel. Instead of grouping sales together for analysis, B2B marketers should group leads collected from download offers, tradeshow encounters and social media engagement. Examining a cohort of leads from any given month, you can track the conversion rates of those responses as they move through the different stages of the funnel and compare those rates month over month.
Drilling down to this level of detail gives B2B marketers a clearer look at how new opportunities are generated, and enables them to track response rates and generate analytics in real time – at every stage in the sales funnel. This is currently a rare ability in the B2B world. Companies that adopt it can gain a significant competitive edge.
Real-time analysis of this data allows marketers to expand their focus to analyze volume, velocity and conversions to determine how fast opportunities are moving through the sales funnel. Once you have this information, you can experiment and try new approaches in defined segments of your outreach, gauging the response in real time. The result? Identify with accuracy which prospect touches drive the best results.
Take a page from the B2C playbook by implementing a robust cohort analysis strategy and eliminating data silos between sales and marketing teams. Today’s B2B marketers are living in a constant state of invention and measurement, which is leading to unprecedented sales results. That’s how B2B marketing is catching up with B2C.