Posted by IndustryArchive Admin on 01/26/2017 Marketing

Marketing Automation
Why It Will Not Help B2B Firms

By: Robert Hennessey

Marketing Automation <br> Why It Will Not Help B2B Firms

Knowing the fundamentals of B2B marketing, and marketing automation it becomes evident that marketing automation is a waste of time and money when it comes to generating sales leads for all but the largest global businesses. Here is why. Let us begin with what we know about B2B marketing:

Principals of B2B Marketing

1.  Most B2B Markets are Small

B2B markets are small vertical markets, often niche in size, composed of a few thousand to no more than 100,000 companies. While 100,000 companies may seem large, but it is a small, number compared to millions and tens of millions of B2C sales prospects. Using mass-market tools like marketing automation to reach a particular vertical B2B audience is not effective or efficient for almost all B2B businesses.

2.  A Relationship Building Sales Process

B2B sales require consultative selling a process based on understanding a client's needs and developing a relationship of trust and confidence in your firm's ability to solve client problems. This process requires engaging in a dialogue with human interaction, not a continual barge of automated emails. The human interaction and dialogue create trust and confidence in a relationship. Just content even if of high quality and relevant only will provide a monolog.

3.  Nature of the B2B Purchase Process

B2B sales typically have a purchasing process that is usually defined in months, and the sale is complex, often taking additional months to complete. What do you do when changes in your client's organization require an understanding of who are the real decision makers, and what changes in new priorities may mean for your ability to consummate a sale positive or negative? Continuing to send automated nurturing emails to the wrong people or subject is not only ineffective but also foolish and wasteful of your marketing effort and expense.

4.  Advent of the Internet

The Internet came along and turned the relationships of Buyers and Sellers upside down. B2B Buyers do not need and do not want Sellers telling them what they need. Buyers are now in A charge of the Buyer/Seller relationship on the Web. B2B Buyers are researching solutions to their business problems first and then deciding among those Sellers. Those Sellers that make it easy to get quality relevant content and have the solutions Buyers need will be contacted. Deal with it and plan your marketing on the fact that Buyers are now targeting Sellers.

The Wrong Marketing Tool for B2B Marketing

Why is marketing automation the wrong tool for B2B marketing? The answer to this question should be obvious. B2B marketing is not about quantity and cannot be, given that most B2B vertical markets are less than 20,000 businesses. B2B marketing is about the message quality you communicate and its relevance to your target audience.

Do you have sales lead statistics like the ones shown in this example below?

This chart represents one marketing campaign landing page results for a 17-day period. This company spent 18,597.60 to promote this campaign. They realized an ROI of only 44% or $8,184.26 on their investment. They acquired one new customer. The acquisition cost to acquire this customer is $10,416.34.

Do you have marketing campaign statistics that resemble this chart? If so then marketing automation may be for you. I say maybe because unless this company gets at least one more customer without spending any additional marketing money this campaign will be a financial loss.

The point here is marketing automation relies on large numbers of impressions, clicks, and conversions to be effective. What if your entire market of prospects is only 20,000 companies, which are typical of most B2B industries? You are not going to get 96,000 web page views to begin with like the above example from one landing page in 17 days.

Finally, can you afford to spend $18, 597.60 every 17 days on your marketing for this kind of ROI? And do you need a marketing automation system to manage 64 warm leads? I think we could all manage 64 leads on a spreadsheet or inexpensive CRM software.

Marketing Automation Reality

At its best, marketing automation excels at contacting sales prospects on a relentless basis referred to as lead nurturing by marketing firms that promote this form of automated spam. I know you will say the sales prospect initially gave permission to receive future contacts by downloading a "free" content document.

However, sales prospects refer to lead nurturing as an annoying deluge of email contacts started by completing a form and receiving something for giving up their contact information. Over time, you will be alienating serious sales prospects from downloading anything from your company as everyone continues this practice.

The problem with marketing automation is that even if you think it is a valuable tool for ethical lead nurturing it only addresses the middle of the sales funnel. What if you do not have any leads to nurture. Where do you get those leads? The obvious answer is that companies begin to engage in buying email address lists to load into their marketing automation system to feed their lead nurturing campaigns.

This type of behavior does not foster a respectful long-term relationship with your sales prospects. In fact, just the opposite it brands your company as employing deceitful and annoying marketing tactics. This marketing approach does not build the trust and credibility necessary in building successful B2B sales and customers. Additionally, once your angered sales prospects take to social media to complain about your marketing practices there surely could be an even higher cost to your bottom line.

Can Marketing Automation Be Useful?

Yes, if you have the following two critical requirements for a mass-market lead generation in place.

1.  If you have or can maintain a top of the sales, funnel, and a supply of organically grown sales prospects in the many thousands of sales prospects a day

2.  If you can generate thousands of MQLS that require segmentation and distribution to a global sales force

Then based on the law of averages that drives mass marketing, you might be able to justify marketing automation from a positive ROI standpoint. Remember without enough leads to convert to customers or a manageable customer acquisition cost you will likely end up with a disastrous ROI of your marketing automation investment.

What Is the Best Way To Proceed?

The answer lies in facing fundamental B2B principles and tuning out the shouting from marketing companies that want to sell you instant sales success of the latest technology solution that must work because everyone is on the bandwagon. They say you will miss out if you do not act fast.
I for one prefer taking my time to evaluate how to achieve low customer acquisition costs and
high ROI. What are you looking for? Are you in a hurry to give your money away?

You might want to consider the following when evaluating any B2B marketing tool.

  • Does this marketing tool respect the new reality that B2B Buyers are in control on the Internet today?

  • Does using this marketing tool require my company to spam, annoy or otherwise create animosity with potential customers that would tarnish my brand?

  • How do you define a sales lead that will provide a high closing rate percentage for your sales personnel?

  • Will this marketing tool help me generate sales prospects that I can convert to customers?

  • Does the marketing tool just create tasks for you to perform and then just use software to automate those tasks?

  • What is my customer acquisition cost in using this marketing tool?

  • What is the breakeven cost in new sales to pay for this marketing tool?

Bottom Line

Successful marketing automation is possible but requires critical assumptions regarding the top of the funnel marketing activities and an exceptionally large B2B universe of target market companies to produce a low-cost customer acquisition cost and acceptable ROI. For 95 % of B2B companies, there are better methods of generating customers that can scale to meet the modest automation necessary to generate sales leads and achieve low-cost customer acquisition cost and exceptional return on your marketing investment.

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