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Monday, October 31, 2011

Are you wondering about what tactics to use for lead generation?

According to this infographic from some clever marketing types called "Inbound Marketing vs Outbound Marketing" you should put all your money into inbound marketing.

Here's the reality check:

OK, let's put on one side the fact that this is developed by a digital agency with a heavy bias towards inbound marketing. And, let's not read too much into the fact that it's probbaly more specific to B2C rather than B2B.

And, hmmm, let's not criticise the fact that the inbound marketers are all smiles, lollipops and sunshine while the the poor outbound marketer is a pawn of Satan, losing money due to his outdated marketing tactics.

All that bias I can forgive as the usual spin on any statistics used to support an argument.

But, to me, there are a few glaring things wrong with this.

Firstly, the graphic conveniently ignores email marketing.

Because email's an outbound channel and a digital one,  it doesn't really fit with the old guard/new guard story. Cost per lead for email campaigns are very low so how can you square that with the "outbound marketing costs more" theme.

I'd also question how you can refer to trade shows as "Outbound". To me it's the same dynamic as Inbound since, as far as I know, people aren't hauled off the street kicking and screaming to attend them.

So, omit a huge outbound marketing tactic that doesn't fit your theory and then simply assign the "highest cost per lead" tactic as Outbound just so that it helps support your argument.

I'd guess that if email was included then the correct graphic would be less polarised and a much more boring "horses for courses" picture would emerge.

Also, simply looking at cost per lead is a narrow view of things.

Conversion ratios, volume of leads and average sales value should always be looked at.

Let's take trade shows as an example.

According to these guys, trade shows... ooh, trade shows are bad. Really expensive cost per lead, you'd be mad to spend any money on them.

But if they give you access to the right level of decision maker, help you close larger deal values or generate a significant number of high quality leads then should you do them? Hell, yes!

Take the other extreme - blogs.

According to the infographic, 55% per companies who blog reported leads from this channel were "below average" in cost. I would challenge how many companies distinguish leads coming from their blog compared to SEO (or even PPC for that matter) - yes, I know that you can do this but I bet very few marketers really do know the numbers.

Anyway, apart from that, the crucial bit for me is what quality are the leads and how many can that tactic generate.

If the number of leads is less than you need (or too low in quality) to hit your revenue numbers then it doesn't matter how low cost they are. A trickle of cheap leads won't plug a big hole in your next quarter's sales target.

The truth is, "Inbound" marketing is just marketing. And whilst for one company trade shows may be a high-cost way of generating leads for another they may be the only way. Or maybe not.

If something doesn't make sense in terms of marketing ROI then it gets dropped.

But don't write it off forever.

DM has started to pick up in terms of high-value B2B campaigns.

Equally, social media may be the next best thing or maybe it'll reach saturation point too.

I know it doesn't make for a big headline or flashy graphics but lead generation is about getting the mix right for your business, trying out different things to see what works and then sticking with what works until it doesn't.
Posted by: David Regler @ 2:05 pm |  0 comments  | Links to this post  

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Friday, October 28, 2011

I was reading an interesting survey "B2B Marketing Budgets, Strategies, Tactics and Trends" (download a copy here) which looks at the changes in the marketing mix for companies.

The survey looks at tactics for both lead generation and brand awareness for B2B companies.

From a lead generation perspective, the top tactics in terms of effectiveness are:

1) Inside sales and telemarketing are considered the most effective tactic for lead generation (47.6% rated them "highly effective")

2) Trade shows and conferences are the next most effective (moving up to 2nd place from 3rd in the previous year's survey)

3) Executive breakfasts and events fell from 1st place to 3rd place in the survey.

Another thing that stood out to me is that marketers from large companies consistently rated inside sales and telemarketing as highly effective in generating leads whilst smaller companies are more likely to use lower-cost digital tactics for lead generation (search marketing, websites, podcasts) even though "these tactics are not among those they rate most effective"

Is it me or does that not make any sense?

Why use less effective tactics if they don't work as well?

Well, the more you dig into the report you realise that it's mainly an issue of budgets being squeezed and marketers trying to get more from less.

And, on top of that, it's these low-cost digital channels that are seeing the greatest increase in spend.

According to the report, the most widely used digital tactics are company websites (95.4%, which makes me wonder who are the 4.6% of B2B companies that don't have a website) and email marketing (87.7%).

Social networks and blogging continue to see increases in budget spend but also continue to rank lowly in terms of effectiveness for lead generation (they rank higher for "brand awareness")

So, how do you square those stats?

People are spending more money on marketing tactics that are less effective for lead generation compared with proven tactics that consistently deliver?

Has everyone just lost all business sense or is there a different story under the headline figures.

Crucially, it comes down to budget.

Some of the most effective marketing tactics require a larger investment. Trade shows are not cheap. Running a high-touch telemarketing campaign over several months also requires considerable investment.

Sending out 1000 emails however is very low cost. Whether it delivers the number and quality of leads needed to keep your pipeline full is a different story.

Looking at budget size the survey shows that smaller companies have smaller budgets (duh?) and that companies that only sell B2B with a direct sales model (ie: their own salespeople rather than through resellers and channel partners) have the smallest budgets of all.

Even more of a reason not to waste money on in-effective tactics, I say.

Which is why we always work with clients on fee models that are part fixed and part paid on delivering results. For our fixed fees we do things including telemarketing, email marketing, event/trade-show support, etc (basically stuff that we know "works") and then we link the balance of our fees to results, such as a % of revenue generated.

It's a model that works for our clients and, we believe, ensures that we don't waste our time (or your money) doing stuff that isn't linked to tangible revenue growth.

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Posted by: David Regler @ 12:55 pm |  0 comments  | Links to this post  

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