B2B Targeting Sucks: Why ROI Is Terrible in B2B Demand Gen

B2B Targeting/Audience

j. David Green

Highlights from this Episode

Getting Real: Why ROI Is Terrible in B2B Demand Gen. It's true, and if you don't think so you're probably not responsible for proving ROI in the B2B space. Most of what we're being fed is B.S., and we're sick of it. So today we're going to start diving into why this stuff doesn't work and talk about how you can right the ship. LeadCrunch[ai] uses artificial intelligence to drastically improve the performance of B2B demand generation campaigns through account-based "lookalike" modeling. Click the link for more information. https://www.leadcrunch.com/solutions/

Posted by LeadCrunch on Thursday, March 14, 2019

In this episode of the Green & Greene Show, the LeadCrunch B2B podcast, two seasoned marketing experts talk about B2B Targeting. 

Hosts: J. David Green and Jonathan Greene

Topic: B2B Targeting

Subtopic: Targeting Sucks

Duration: 14 minutes

 

TL;DR

A History of Innovation in Demand Gen Yet Conversion Rates Suck

Big Claims. Small Results

A Sober CFO View of B2B Demand Gen

Why We Waste Huge Dollars On B2B Media 

Start with the Obvious: Who the Heck Should You Be Marketing to?

How to Figure Out Who the Heck You Should Target

Can We Shoot for a Tolerable ROI in Demand Gen?

 

Podcast Transcript

[INTRODUCTION]

[0:00:05.1] ANNOUNCER:Live from deep in the heart of Galveston, Texas all the way to the gleaming shores of Jacksonville, Florida, it’s the Green & Greene Show. Here are your hosts, Dave Green and Jonathan Greene, ready to unlock the mysteries of scaling demand gen. The Green & Greene show is brought to you by LeadCrunch, which has reimagined how to find B2B customers at scale.

[EPISODE]

[0:00:29.0]JG:We’re in. It’s the Green & Greene Show. I’m your friendly neighborhood, Green & Greene host, Jonathan Greene. I’m here with my partner in crime, mentor, supervisor, all-around marketing ninjutsu expert, Dave Green. How’s it going?

[0:00:44.6]DG:Oh, boy. Jonathan. I sure have to dish out the big bonuses for that kind of a build-up.

[0:00:51.6]JG:Well, listen. I’m excited about today, because what we’re going to do next in the show is going to be beneficial to people. We’ve been talking in the background as it relates to our business and the industry at large. I think we’ve pretty much decided that the vast majority of B2B demand generation tech and/or the way people are using it is BS. It’s about time we cut through some of the nonsense and get real. What do you think?

[0:01:23.3]DG:I think so, man. Let’s be fair. There are definitely great tools out there and good things to do, but I do think we need to tap the brakes just a little bit on some of the hype and some of the posturing that goes on in the industry.

A History of Innovation in Demand Gen Yet Conversion Rates Suck

[0:01:40.8]JG:All right, so let me set the scene if I could. If you go back and look at the history of technological innovation in the B2B space, what’s been happening over the years, what’s been developed, way back in the day, you had search marketing and then you had social marketing and then you had content marketing. Then, circa 2007–2008, you had the advent of lead nurturing and scoring. Around about that time, maybe a little later, 2009–2010, SDRs an inbound team started to be the big thing. Then, circa 2015, everybody starts talking about account-based marketing. In 2018, we’re delving into chatbots and all.

The technology train appears to be pressing on unrelenting. Yet, it seems as if the average B2B marketer, a demand generation person is having a hard time getting any additional return out of their ad spend as opposed to what we had 15 years ago. What is going on here?

[0:02:50.8]DG:That’s the thing. I think if you reflect back—and being an old guy, I get to do that a lot—you would think that you’d have these monumental increases in conversion, ROI. Sure, people have wins here and there and do great things. It seems like, if anything, it’s harder than ever, that if you can get 1% of the leads that fill out one of your web forms to actually buy something in your career, you’re a pretty cutting-edge marketer.

Let’s face it, a lot of people can’t even measure. Something’s really wrong. There’s some way we’re not thinking about this which I think we need to start thinking about. You and I both have been looking at a lot of vendor websites since we started here at LeadCrunch, because we’re building infrastructure and capabilities. How many claims of a 300% increase in revenue and stuff like that have you seen?

Big Claims. Small Results

[0:04:04.2]JG:Sure. I mean, the claims are everywhere.

[0:04:07.1]DG:We have them, too. I’m not sure we’re being helpful with stuff like that. I’m not trying to say that somebody’s occasional, fantastic ROI is being made up. I think it creates an expectation that that’s what you should get to.

[0:04:30.2]JG:I think it comes off as hyperbolic, because there’s so much white noise about how this, that, or the other thing is generating 200% lift or 300% lift. That becomes hyperbolic at some point in time, and I have trouble believing it as a marketer. I’m inclined to tune out the noise, because, frankly, it just all seems to be BS to me.

A Sober CFO View of B2B Demand Gen

[0:04:52.8]DG:I think it’s always helpful to get the perspective as a marketer of a CFO, or some senior level financial executive. In fact, we’re planning to have a couple of CFOs come on the show and just give a financial executive perspective on return on investment for marketing spend. They’re not usually expecting heroic return on investment scenarios, because they don’t see them. They’re looking for marginal increases.

With a company like Facebook whose growth is so explosive, it probably doesn’t have anything to do with marketing. It had to do with the appeal of the product and its value in being at the right place at the right time. The rest of us need to look at how we can marginally improve what we’re doing and chip away at it over time rather than expect that, because I get a chatbot, my ROI is going to go through the roof.

Get the eBook “How to Win the Love of Sales “

[0:06:01.8]JG:An important first step, I think, is to ground yourself in reality. If you have not done the research to figure out what the industry benchmarks are for conversion and for throughput at various stages of the funnel, you might want to start there. I feel a lot of the problem is that people are asking the wrong question: “How can I get a 200% or a 300% lift off of what I’ve been doing?” I think most experienced media managers and practically all experienced executives, CFOs, CEOs arrive at their destination through the effective management of the aggregation of marginal gains, which is to say they tend to manage and live their lives in such a way that they get 1% better every day instead of trying to look for that 200% or 300% quick win.

It tends to be a more holistic approach to things. I think part of that is the reason we’re not seeing the returns despite the advance in technology. People are buying into the hyperbole and expecting, and essentially, for lack of a better strategy, they just bounce from tactic to tactic.

Why We Waste Huge Dollars On B2B Media 

[0:07:13.4]DG:Well, I think what happens quite often is that when there’s a new channel, such as text or a chatbot, for a while you get some gain that you weren’t getting before. Sometimes it’s hard to isolate and really look at it holistically within the context. Pretty soon everybody’s doing it. That’s what happened with social media. Initially, everybody got a bazillion shares on anything they put out, and now there’s so much content and so many people doing things that it’s hard to get that lift from social.

I think there’s an initial bump from any new technology, or there can be. To your point, I think that the bigger thing is sustained growth. The other thing and the reason I’m here at LeadCrunch is something that’s bothered me for a long time and I looked at this. Everybody should just take a moment to think about the experiences they have in their B2B life when you’re on LinkedIn, or whatever business publication or website you might look at. How many ads do you see that are irrelevant? How many e-mails come to you that are really irrelevant?

The answer to that is a lot. We all get lots and lots and lots of irrelevant ads. I think that’s why there are terms like banner blindness or spam or junk mail and all the rest of it. For all the effort and energy we put into it, actually getting the right message in front of the right person at the right time and the right company is really hard. We haven’t quite figured that out yet.

[0:09:06.3]JG:That’s an interesting point. Especially in the programmatic realm and in the CPL, when you buy leads by CPL, so much focus goes into the concept of fraud that almost nobody remembers to focus on waste. Waste is a gigantic concept in advertising, and it’s all to do with effectively segmenting and then effectively targeting. I feel, for a lot of the people we consult with and engage with, both in our own personal lives and as a business, who are having difficulties with proving ROI, it’s because they’ve not really thought through their topic on a whole segmentation. They’re not always entirely sure who they’re supposed to be talking to, or they’ve not done the work to segment it in a way that’s appropriate so that they can talk to the people they want to and not talk to the people they don’t want to.

Start with the Obvious: Who the Heck Should You Be Marketing to?

[0:09:59.3]DG:I was doing demand gen consulting earlier in my career, and through that and other things, I probably interviewed 200 or 300 marketers. Probably more than that. Probably 500 marketers, usually about demand gen and related topics.

The vast majority of them are not really clear on who their ideal customer is. It’s very common. You’ve seen where the market definition is every single company with—and I’m going to make up some numbers—250 employees to 1,000 employees, or anybody over 50 million dollars, or anybody over 50 million in these 12 big industry segments, and it can’t be that all of those have equal value and that they’re all valid and that it actually defines your market.

It’s a really crude way, when you think about it, to try to say, “Yeah, those are the people I really want to do business with.” You end up spending a huge amount of money on people who probably aren’t a good fit at all, and you probably miss a lot of people who are.

Get the white paper: How to Win the Love of Your CEO: B2B Data Reimagined

[0:11:12.0]JG:It’s a fair point. Yeah. I think one of the key things you have to do there is sit down and really think through and take the time to do it. I know it’s a pain, and it’s probably not the funniest meeting you’re going to have in the history of the world, but really figuring out who those people are, because ultimately, what you just described I would call firmographic targeting. If you’re following the show, if you’re watching the episodes, what Dave just described is what we like to refer to firmographic targeting.

Firmographics is flawed from the outset, because even the divisions of industry were not created for the purpose of really categorizing businesses. They were created for the purpose of reporting for the government and things of that nature, which means it’s not terribly accurate. It’s not granular enough. There’s way too much black-and-white. There’s not enough approaching the gray area. There are business units within companies that you’ll miss entirely which could be strategically very important if you’re looking at it that way. That’s really step one: to become much more nuanced and much more targeted in terms of understanding who it is that you should be reaching out to in the first place.

[0:12:25.5]DG:Maybe the industry or the size of the company isn’t the be-all-end-all for who your market is. For example, let’s say that you’re selling a CRM. All right, well, some people in a company are more inclined to need to have access to a CRM than others. Like sales reps and customer service reps, for example. Not every company has the same concentration of those types of functions and whatever other functions might leverage a CRM.

It might be they start to look at what kinds of people are at that company, and to what degree relative to their overall size, to begin to get a better handle on how good of a fit they are. That’s just one dimension. I think there are lots of dimensions we don’t have ready access to which should play a much bigger role, moving forward, in how we figure out who we want to sell to.

How to Figure Out Who the Heck You Should Target

[0:13:26.0]JG:I think it’s important to understand. There are a couple ways to go about this if you’re at the beginning and you don’t know how to get to where you need to go. Let’s walk through that briefly. There are a few ways to do this process of ferreting out who your customers are. I know that you’re among the best I’ve ever seen in segmentation. Maybe give us a few minutes on your process for doing that and how you arrived at the very detailed, very stratified, very strategic segmentation that LeadCrunch uses, for instance, at the top of funnel.

[0:13:56.1]DG:I think it starts with just having conversations with the people who are talking to customers, both the salespeople and your customer success team, if you have it, to try to understand those qualities and characteristics which tend to characterize the person and the company you do business with. There’s usually something there that’s really important. For us, characteristics, just for example, are that they’re actually buying leads.

They may be at a stage in their evolution as a B2B marketing company where they’re not ready to do that. It’s just referral-type selling, because they’re starting out. It’s friends and family and trying to figure out who your market is. You haven’t really defined it, so you’re not going to go out and spend a bunch of money on that. Then there’s a later stage of evolution where you’re actually buying leads. Usually, an early part of your evolution is you throw every single lead over to the sales team. I was just talking to a guy who’s doing that and I felt bad for him, because I knew how that was going to end: not well.

You have to start putting in things like lead nurturing and lead scoring and data augmentation. You start to do that and then you start to look for mechanisms that can help you identify that market. One of the mechanisms, if you can, is to try to take a quantitative view once you’ve gotten this qualitative understanding and try to see, “Are there some characteristics of my customers and maybe I haven’t even thought of that I can use those markers?” Try to find other companies with those characteristics, too. I think that the combination of qualitative and quantitative are both really useful. I think this idea of look-alikes is going to become a very important component to bring some reality to it.

[0:15:53.5]JG:We’re going to do a whole series on getting real about B2B marketing, because frankly, there’s so much BS, we can’t cover it all in one episode. There’s so much BS happening in and around the B2B space, in particular. I feel people are easy prey, because the options that are available for targeting are so limited at present.

We’re going to do a whole series, but I want to just try to wrap this one up, why your ROI is terrible as it is right now. Then, over the course of the next few weeks, we’ll unpack some solutions for people, talk about some ways forward, and get into some more specifics about what particularly is bad about targeting and what you can do about it and things like that

Do you have any parting thoughts before we wrap this one up? I think this was a good, coherent initial thought on the subject, so I’m going to let you close us down.

Can We Shoot for a Tolerable ROI in Demand Gen?

[0:16:52.1]DG:I was interviewing one of those 500 marketers back in the spring, and she had what has become one of my favorite phrases. I was asking her about her accomplishments and her game plan for doing demand gen. One of the phrases she had was she would tell the powers-that-be that she’d be able to get a “tolerable ROI”. I thought that was so wise. What’s the least amount that you can commit to and how long can you put off committing until you have better data, and not over-promise so that you’re not under-delivering? I think that’s the wisdom I would leave with everyone for today.

[0:17:35.4]JG:That’s a great thought. All right, guys. That’s our episode of Green & Greene Show for today. Tune in next time. I think we’re going to dive more specifically into the targeting aspects and what’s BS about targeting in the B2B space. Trust me, there’s a lot. You don’t want to miss it. I think we have a revolutionary perspective on targeting, so we invite you to tune in for that.

Until then, it’s been real. I hope you have a happy weekend. Green & Greene, you’re out.

[END OF EPISODE]

[0:18:02.8]ANNOUNCER:Thank you for tuning in to the Green & Greene Show by LeadCrunch. Green & Greene think differently about B2B and want to start a movement to transform demand gen. If you have ideas for topics or would like to be a guest, send an e-mail to david.green@leadcrunch.ai. If you’d like to find more customers, visit our website to talk to one of our demand gen guides,www.leadcrunch.com.

Get the white paper: How to Win the Love of Your CEO: B2B Data Reimagined

[END]