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Generating Demand for Complex B2B Sales © Bayberry 2010
A Whitepaper
Generating Demand
for Complex B2B Sales
Strategic marketing consultants
Generating Demand for Complex B2B Sales © Bayberry 2010
Executive Summary:
Buyer behaviour in complex B2B sales has changed dramatically in the past
5 years. More of the buying process is happening online and more of it is controlled
by customers.
Vendors need to understand the new dynamics and adapt their sales and marketing
organizations accordingly if they want to succeed.
In this whitepaper we look at the specific characteristics of complex B2B sales and
marketing; we review how B2B marketing has changed in the era of digital
marketing; we show how companies should generate demand today; and we outline
how the marketing and sales units at B2B firms should address the new
environment.
Reengineering Sales and
Marketing for a New Era
The complex B2B sale has some unique
characteristics: higher average value, longer
sales cycles, and a number of participants in
the purchase process. And it is increasing in
complexity. Buyer behaviour in B2B has
changed dramatically in the past 5 years as the
internet redefines how companies buy goods
and services. Buyers are doing most of their
initial research online before initiating
conversations with vendors and are better
informed at an earlier stage. Buyers are also
more difficult to reach because of the
increasing volume of electronic
communications they receive. Traditional
marketing and sales techniques are less
effective for these reasons. We're moving from
a focus on 'outbound' techniques like press
advertising, mail shots and cold calling, to
'inbound' techniques based on websites, online
‘pay-per-click’ advertising and ‘content-based’
marketing. The changes present a threat to
companies who don't adapt quickly to the new
environment, but they offer a huge opportunity
for those who learn how to use their online
presence to generate demand
effectively. The real promise of the new era of
marketing and sales is the ability to use
automated, repeatable processes to scale up
the generation of high-quality sales leads -
what we call 'demand generation' – leading to
corresponding increases in sales conversions
and revenue.
What is a Complex B2B Sale?
A Complex B2B sale is one in which there is a
long and complex sales process that requires
sustained interaction with the client buyer
organisation. Some of the common
characteristics of a Complex B2B Sale include:
• High-value, high-consideration
– the average deal size tends to be high,
which means there is a greater perceived
risk on the buyer side.
• Complexity of the product or service –
often what is being sold is complex, which
means there is a need to educate
prospective buyers on its particular
features, merits and competitive
differentiators
• Extended, multi-phase sales cycles –
the sales process doesn’t follow a linear
path; there are different phases with
different requirements at each phase; and
the end-to-end length can range from 3
months to 2 years or more
• Multiple participants in the buying
decision – there are different decision
makers and influencers at each stage of
the sale, with different needs and
constraints
• Increased Executive Selling – most
complex sales require sign-off from
someone at senior executive level, and
they may be involved at earlier stages in
the evaluation process too
• Increased Demands on Sales People’s
time – sales people have to invest huge
amounts of time in developing their key
prospect accounts. This means they do
not have time to chase after low-quality
sales leads and it restricts the time
Generating Demand for Complex B2B Sales © Bayberry 2010
Since the mid 1980s a number of methodologies have been developed to help guide sales teams
complex sales, most notably the Miller Heimann “Strategic Selling”
1
approach, which emphasizes a d
eep understanding of the roles in a buying organisation. While still useful, these approaches have two
serious limitations: they do not address how marketers should work with sales teams when generating
leads for the top of the sales funnel and, more importantly, they don’t address the very significant impact
the Internet has had on B2B buyer behaviour.
The Internet and the B2B Buying Process
Today, whether someone is buying a plane ticket, a house or a new software system, the search begins
online. In complex B2B sales, more of the process also happens online, and more of it is controlled by
customers, not your sales teams. US research firm MarketingSherpa reported in a 2008 survey of
buyers of technology solutions worth $50,000 or above that over 80% said they found the vendor in their
purchase rather than the vendor finding them
2
. Buyers now typically initiate their research online before
launching a formal procurement process. This means that by the time your sales staff meet a potential
buyer face-to-face that buyer will already have visited your website, downloaded your product
information, looked at competing vendor sites, checked your analyst ratings and studied comments on
blogs and social networks. You may be excluded from a buyer’s short list without even being aware that
a procurement was underway. Or worse still, you may not have featured on the list because the buyer
wasn’t aware of you. When the first step in the buying process is to search for information online on how
to solve a need then that is the first point at which you need to be found. With large markets, long sales
cycles, and multiple individual buyers and influencers, no company can hope to reach them all directly
or at the right time using outbound methods. You need to use inbound marketing to make sure you’re
found first and found early. There has also been a general increase in the complexity of the average
decision process. According to the standard marketing model, the business buying organisation can be
thought of as a ‘black box’, with certain stimuli (inputs) resulting in certain responses (outputs)
3
:
According to this model, for any given procurement, the buying process follows a predictable path from
‘need recognition’ through to selection of a given vendor
4
:
1
The New Strategic Selling, Robert Miller, Steve Heiman et al, ISBN-10 0749441305
2
MarketingSherpa B2B Technology Marketing Benchmark Report 2008
3
Adapted from Kotler et al, “Principles of Marketing”, 2nd European edition, p. 282
4
Adapted from Kotler et al, “Principles of Marketing”, 2nd European edition, p. 294
Generating Demand for Complex B2B Sales © Bayberry 2010
But in reality the buying process is not a linear, step-by-step process, and the tougher economic
environment has increased buyer risk aversion. Average sales cycles are lengthening – in a survey of
complex B2B sales, 23% of these sales took 7 to 12 months to complete in 2008 versus 15% in 2005,
according to MarketingSherpa
5
. This means when prospects first enter your pipeline they may be
months away from a purchase decision, so you need to identify ways to maintain an ongoing
relationship with them while waiting for them to move into ‘buy mode’. The number of participants
involved in a purchase also continues to increase, reflecting organisational risk aversion, with an
average of 13.5 people being involved in a purchase worth over $25,000 in companies of 500 to 1000
employees
6
. The longer sales cycle and large number of participants make it increasingly difficult for
sales teams to identify the key influencers on the buyer side and to control the overall outcome of the
process using traditional approaches.
How B2B Companies Generate Demand Today
In most companies with a Complex B2B sale, the Sales unit has held primary or sole responsibility for
lead generation, with Marketing providing a supporting role. Sales teams rely on their personal and
professional networks to identify prospects and occasionally use telesales as a way to root out
additional opportunities. In support, B2B Marketing units have traditionally used a range of ‘outbound’
techniques to help generate leads, including tradeshows, print advertising, telemarketing, seminars and
direct mail. There are three main problems with this approach:
• It ignores the new buyer behaviour – relying on cold calls and direct mail assumes you know
who to call or mail to begin with. But, as we’ve noted, it’s unlikely you will know the broad range
of participants in a B2B procurement. And while the company has focused on this outbound
approach, they will have missed the many other prospects searching online for the product or
service they could provide.
• It is inefficient – many direct outbound marketing techniques assume very low response rates
e.g. 2% to 5% responses for a typical email campaign. In cases such as print advertising in
trade journals there is no accurate way to gauge the response rate. This means that over 90%
of promotional activity may not be reaching an appropriate recipient.
• It is disjointed – typically there is a lack of alignment between sales and marketing in many
B2B complex sale companies. Sales are under huge pressure to deliver results (new sales)
and feel that the leads marketing produce are of low quality, causing them to waste time
chasing ‘red herrings’. Marketers in B2B firms are often frustrated because they devote time
and money to lead generation activities only to see the resultant leads dropped or ignored by
sales teams. The result is two teams vital to the success of the organisation who don’t
understand each other.
A New Approach to Generating Demand
The new buying process requires a new approach to sales and marketing, one that aligns the sales and
marketing teams, reflects a deep understanding of the buyer and uses digital marketing tools to support
lead generation.
Just like in any form of marketing, digital marketing can only be successful if the buyer is understood
and your value proposition is clear. Digital demand generation for business-to-business complex sales
must therefore start with buyer and needs analysis, the creation of propositions to meet buyer need, and
only then the use of digital tools to raise awareness and generate leads with buyers.
So, to execute an inbound B2B marketing strategy, companies draw potential buyers to them online by
providing a range of relevant offers, such as research papers, industry surveys and buyer guides.
Offering useful business-oriented content lets you demonstrate your worth to prospective customers,
eliminating buyer uncertainty and establishing a relationship. In exchange for that content they capture
some basic contact details from the visitor, and use this information to begin developing a profile for
each ‘lead’. They identify the visitors most likely to be of interest using data such as location, company
name and social network profile, and encourage those visitors to continue interacting over time, gaining
further insight into the person’s stage on the buying cycle at each interaction. When a particular contact
meets some predefined criteria to indicate they are entering the buying stage, the lead is passed to the
sales team, along with the lead’s interaction history.
5
MarketingSherpa Technology Marketing Benchmark Survey April 2008
6
MarketingSherpa Business Technology Buyers Survey March 2007
Generating Demand for Complex B2B Sales © Bayberry 2010
The main elements in the new approach are:
• Agree responsibilities
In our view lead generation is best handled by marketing, letting sales staff concentrate on
selling to genuine opportunities.
• Agree a common lead definition
Marketing and Sales should agree what constitutes a sales-ready lead. This could be
characterised by company size, revenues, location, industry sector. Having this conversation is
the first step in aligning the activities of the Marketing and Sales units so they both reinforce
each other.
• Understand your buyers
Identify the people involved in the buying process, their specific needs, their role in the decision
making process, and the kinds of organisations you are targeting so you can build a picture of
the key players and the buying process in a typical sale.
• Create compelling offers
Based on your knowledge of your buyers and what interests them, create ‘content’ that will
attract them to your online presence. In B2B complex sales this content typically includes case
studies, white papers, webinars, recorded demos, online videos, analyst reports, buyer guides
and ‘how to’ guides.
• Drive buyers to you online
Again based on your knowledge of typical buyer organisations, use the full range of available
digital tools to drive relevant traffic to you online. Use Google pay-per-click ads, Search Engine
Optimization, ‘opt-in’ email campaigns, social networks, online PR and other methods to build a
constantly increasing stream of visitors to your website. In addition, continue to use selected
‘offline’ promotional methods such as direct mail shots and high impact trade shows to
reinforce the online program
• Capture contact details
In return for offering buyers high quality content such as an analyst report, request some basic
contact details, such as name and email address. You can then use this information to do a
first-pass assessment of the visitor e.g. which company they come from, which geographic
location, whether they have a profile on LinkedIn etc. If they have visited your site before, you
can begin tracking their history of interactions with you.
• Filter your contacts, sell to the hottest, nurture the others – based on the profile of the
contacts and your agreed lead definition, you can identify those that are of greatest interest.
Qualify those leads that seem to have potential (e.g. by having a telemarketer ring to ask what
their interest in the solution is). Any leads not yet ready-to-buy but who fit the target profile
should be placed in a program of regular follow-up communications to ensure you stay front-of-
mind.
Generating Demand for Complex B2B Sales © Bayberry 2010
By adopting this process-centric, online marketing-based approach, you are now much more likely to
catch the broad range of participants involved in a B2B purchase. You are also making more effective
use of your time – rather than calling one hundred people in the hope that three will answer as in the old
approach, you are now pursuing contacts who have already indicated an active interest in what you
have to sell. Instead of having sales staff pursue low-grade ‘red-herrings’, you are qualifying all contacts
using agreed criteria and only handing sales-ready leads to your team. You can see what you get for
your money too – with online lead generation you can match up every dollar spent with the results, often
within minutes or hours, letting you decide which tools are most effective at generating high quality
leads.
Finally, this approach is easy to scale-up without having to increase headcount. You can automate
email follow-up campaigns, run multiple Google pay-per-click ads and your website can capture visitor
details 24 hours a day, 7 days a week, all without intensive manual input.
Building a Demand Generation Machine
Many B2B companies suffer from an unpredictable flow of leads and from leads of varying quality. As
sales slow down or stall, these companies tend to focus on the bottom end of the sales-funnel to find
solutions. Should we change our sales pitch? Should we change our product demo? Should we retrain
our sales people in strategic selling? Should we change our sales team?
These problems should be addressed by developing a set of processes within sales and marketing that
generate a constant and predictable flow of leads. Creating and nurturing leads through automated
demand generation processes using digital techniques will ultimately result in more deals and a higher
conversion rate. Demand Generation should be treated as a key operational process, in the same way
companies have defined processes for product development or financial management. The objective is
to build a ‘machine’ that produces a predictable and repeatable flow of leads of standard quality each
quarter.
The first step in building this machine is to ensure both sales and marketing understand their respective
responsibilities. While Marketing covers a broad range of activities, in complex B2B sales a key
responsibility is to generate leads. Likewise, the function of the Sales department is changing, with more
focus on selling to key opportunities and less time spent on prospecting and chasing cold contacts. The
Sales team should look at Marketing as the people who fill the top end the sales funnel. The buyer
doesn’t distinguish between sales and marketing and so it’s the company’s job to follow the buying
process. In future the line between Sales and Marketing will become blurred and the two will share a
more clearly defined collective focus.
With Sales and Marketing aligned, the next step is to implement processes and tools to generate and
then manage leads. This means setting up online lead capture, coordinating email marketing
campaigns, managing pay-per-click advertising programs and integrating all of these so that all leads
are captured and scored in a consistent way. A new category of software, Marketing Automation
systems, is being used to support the creation and management of these kinds of processes.
Generating Demand for Complex B2B Sales © Bayberry 2010
Importantly these processes should focus not only on generating new contacts and inquiries, but also on
‘nurturing’ those leads that aren’t sales ready, which in our experience is about 75% to 80% of all leads
generated. Using digital tools to nurture leads who are either very early stage or just not ready to buy
will pay dividends. According to a report by BPM forum, over 80% of generated leads are never followed
up, or are dropped or mishandled.
7
Given that Forrester Research has estimated that on average it
costs $100 to generate a lead in B2B, this is an expensive waste
8
. A Yankee Group report also found
that an 11% reduction in dropped/lost leads combined with a 1% improvement in lead-toorder
conversion increased gross annual profits by 136%
9
. All of this suggests that it makes financial senses
to systematically manage other leads that are of interest but which haven’t yet moved into the buying
phase.
Conclusion
Buyer behaviour in B2B has changed dramatically, reflecting the impact of the internet on the way
companies buy goods and services. Buyers are doing more of their research online; they are also more
difficult to reach directly; and traditional marketing and sales techniques are less effective as a result.
Your aim is to connect with as many buyers as possible who are just starting to identify the need for a
solution so you can influence their needs and establish yourself in pole position a candidate supplier.
For companies wishing to achieve scale internationally, inbound marketing will help you establish
contact with, and nurture, more buyers than would be possible using outbound methods. B2B complex
sales organisations should adopt a new approach to generating demand, one that aligns the sales and
marketing teams, reflects a deep understanding of the buyer and uses digital marketing tools to support
lead generation. Apart from improving demand generation in the short term, the real promise of this new
approach is the potential to automate repeatable processes that drive faster and more predictable
revenue growth.
7
BPM Forum, “Gauging the Cost of What’s Lost”, 2004
8
Laura Ramos, Forrester Research, “Lead Generation Costs”, 2007
9
Quoted in Stephens, Craig, “Streamlining Sales”, BtoB Magazine 88, no.4 (2003):7
Generating Demand for Complex B2B Sales © Bayberry 2010
Bayberry is a strategic consulting and business advisory firm. We are versed in a range of business
disciplines, all focused on delivering change through innovation and growth. We’re based in Ireland and
we work with clients all over the world. We have a successful record of delivering high profile projects
and in bringing new ventures to market. We work with companies of all sizes and stages in Government,
Telecoms, Software & Services, Logistics, and FMCG amongst others. Our clients include major names
in Banking, Government, Telecoms, Software & Services, Logistics, and FMCG.
Contact details:
Simon Rogals
simon.rogals@bayberry.ie
Tel: + 353 12827103
Linkedin: http://ie.linkedin.com/in/simonrogals
Twitter: http://twitter.com/bayberryconsult
. Generating Demand for Complex B2B Sales © Bayberry 2010 A Whitepaper Generating Demand for Complex B2B Sales Strategic marketing consultants . Generating Demand for Complex B2B Sales © Bayberry 2010 Executive Summary: Buyer behaviour in complex B2B sales has changed dramatically in the past 5 years. More of the. leads. This means setting up online lead capture, coordinating email marketing campaigns, managing pay-per-click advertising programs and integrating all of these so that all leads are captured
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