Chief Marketer’s 2012 Business-to-Business Lead Generation ... · lead-gen incentives, an...

t’s no secret, businesses need customers to survive and prosper whether those customers are new

or established customers. But whencourting new customers, B2B marketers face a bewildering array of prospecting possibilities. How are they determining which of those channels hold the most lead-gen potential and are likely to result in the largest number of qualified leads and the best return on investment (ROI) in today’s tough economic environment? For the third year, the Chief Marketer Network has answered those questions in the most direct way possible: by polling some 340 practitioners in the B2B marketing space. The online survey (which also went out to B2C marketers for a total response population of 832) was fielded from November 10, 2011 to December 19, 2011.

Lead-Gen Aims and Budgets

This year, it seems companies are striking out to build a new customer base with over half of the respondents (51%) emphasizing new customer marketing [Q1.]. That number has grown from last year’s 44% who said they would on new sales prospects. When asked to sum up their company’s primary lead prospecting aims in 2012, the majority of B2B respondents said that their companies will focus on finding new customers. But 37% of the respondents say their companies will concentrate primarily

on servicing and bonding with current customers, on the dual expectation that they can both make them better customers and that the service effort will raise brand awareness among non-customers. Only 7% of the respondents plan to focus solely on retaining their current customers or reactivating former customers. The focus on generating new business is apparent both in reports of what respondents’ companies spent on B2B acquisition in 2011 and what they project they will spend in that area this year [Q2.]. Over half of the B2B marketers polled (57%) said that their departments allocated 54% or less of their marketing budget for customer acquisition in 2011; in fact, the average prospecting allocation for the B2B response group was just over 50% of marketing spend in 2011.

Chief Marketer’s 2012 Business-to-Business Lead Generation Survey:

Your Best ProspectsI Q1 tahW will your company’s primary

marketing aim be in 2012?

We will focus primarily on finding new customers

We will focus on current customers, but hope to build awareness outside that group with prospects We will focus on retaining current customers or reactivating former ones

Other

37%51%

7%

5%

2

2012 Business-to-Business Marketing Lead Generation Trends: Your Best Prospects

Forecasts for B2B lead-gen spending in 2012 show a mixed picture, with respondents in some low-spending categories expecting to spend even less, while 6 of the 10 deciles questioned report that their prospecting budgets will increase. As a result, while median spending for the B2B group may slide a bit to 51%, the average spend on finding new B2B business should actually increase a bit to 54% of the money spent on marketing as a whole in this group. By contrast, responding B2B marketers said they spent an average of 37% of their budgets on retaining existing customers in 2011 and would drop that average to 35% this year. The long view also extends to the way B2B marketers say they understand their customers’ value [Q3]. Fully two thirds of respondents (66%) said they aim their prospecting efforts at acquiring customers who will be profitable over the lifetime of their relationship. Only 34% of those polled said they expect customers to be profitable from their very first transaction.

Tools and Tactics

A survey question about favored lead-generation channels [Q4] asked respondents to check off all the media they used in prospecting last year and

then separately to note all that they intend to use to find new customers in the coming year. The fact that all these categories register a predicted usage increase from last year to this is probably attributable to the optimism of marketers looking forward rather than back. Still the size of the forecast increases in many categories suggests where marketers see their new opportunities to reach new prospects. As was true for their B2C counterparts, email drew the most attention in 2011, with 86% of respondents saying that they used it for prospecting and 90% saying they would be using it in 2012. Interestingly, the amount of respondents planning to incorporate direct mail into their lead-gen plans for the coming year grew from 52% in 2011 to 60% in 2012—making it the only “traditional” channel in the question to post what could be considered strong year-over-year growth of more than five percentage points. Use of digital media for lead-gen purposes continues to be a fast-growing trend, with website prospecting leading

3


the way in terms of widespread adoption. Web site registration was deployed by 57% of respondents in 2011 and will reportedly be used 70% of the polled group this year. And 48% of B2B marketers said they used online social networks to find new customers in 2011. That percentage will see healthy growth to 68% in 2012—putting it for the first time in a tie with trade conferences, that most traditional of B2B lead-gen channels. Respondents also expect to increase their use of pay-per-click ads and display ads (Web or social); the number citing those channels as favored in 2012 rose by 10 percentage points to 41%. And while the number of B2B marketers who report using ad retargeting in 2011 is small (11%), almost twice as many expect to deploy this tactic this year (21%). As noted, the B2B mainstay media also put up expected increases for 2012, though most of them much smaller in size than the digital usage hikes predicted. For example, 68% of respondents said they will rely on trade shows and conferences to generate new sales leads this year, an increase of about 4 percentage points. That’s small growth, but conference still tie for the Number three spot as most-adopted

lead-gen channel. Prospecting use of other “live events” will increase about 6 points to 23%. Good old fashioned telemarketing will grow five percentage points from last year’s numbers to 44% in 2012, and direct-response print ads will also rise slightly to 23%, with respondents maintaining that there is still room in their budgets for non-Web oriented marketing. So much for the channels chosen. In terms of what incentives B2B marketers are using to get prospects to volunteer their contact information [Q5], digital informational content ranked highest in 2011 (42%) and will continue to outpace other offers or premiums in 2012 (55%). Product discounts or samples (36%) and enhanced services (24%) were also popular inducements to first-time customers last year but may see rather a drop-off in 2012 (to 32% and 21% respectively.) Reduced-rate shipping may also become less widespread in 2012. As for less conventional B2B lead-gen incentives, an interesting 18% of respondents say they will use contests or sweepstakes to get those all-important addresses and opt-in permissions this year. But only 4% aimed for new business with non-

informational entertainment content, either on site or in download form; and even fewer—2%— expect to take that approach this year.

Tracking and management

The ability to track where leads have come from was considered an important aspect of the lead generation process for more than two-thirds (68%) of the respondents [Q6.] That’s understandable, since knowing the channel source of the lead, e.g. email, direct mail or online registration, can provide other levels of data regarding leads to B2B marketers. It is also the way to determine the best channel source for future lead generation activities. But almost one-fifth of respondents (18%) said they do not track leads by channel, and another 7% of the respondents did not know the channel source of their leads. Taken together, that’s one-quarter of the B2B marketers polled who say they can’t say how their prospects are first approaching

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them. Those proportions are basically unchanged from last year’s survey; but their persistence continues to surprise. Equally unchanged is the proportion of B2B marketers who say their companies use automated lead-management software to track, funnel and manage leads from initial acquisition to final outcome. Only 22% of the B2B respondents said their company de-ploys such an automated solution, while a full 68% of respondents said their employers don’t, and another 6% say they’re uncertain. One explanation for the consistently large proportion of lead-management software resisters might be simply a general belief that however efficiently a B2B marketer is handling and handing on leads, few competitors are doing much better [Q7]. Despite the dearth of lead-management software, 42% of B2B respondents felt that their companies were doing either a ‘much better” or “somewhat better” job than the average B2B company. Given that another 41% say they are doing an average job at those tasks,

that constitutes 83% of respondents who express considerable satisfaction with the way their incoming leads are being handled and tracked. That restricts opportunity for vendors of lead management solutions to the 14% who say their companies are ‘somewhat worse” than average at that job—or

likeliest of all, to the 3% who say their firms are ‘much worse’ than average at managing leads.

Approaching Email

As we have seen, email is definitely a vital channel for today’s B2B marketers, and not just for staying in touch with or servicing customers with whom they have an existing business relationship. Sixty-six percent of respondents say their companies currently generate new-customer leads via email and will continue to do so in 2012 [Q8.] Additionally, 15% of remaining respondents say that while they have not prospected using email before, they plan to at least test the acquisition waters this year.

Nevertheless, that leaves a full one-quarter of those polled who either tried email prospecting and plan to quit in 2012 (7%) or have never used email for recruiting new business and don’t plan to start (13%). That makes acquisition-email nay-sayers a minority—but certainly one too big to be completely

Q7 seoD your company use automated lead-management software?

Yes

Do not know

No

Does not apply

68%

22%

4%

6%

Q8 oD you prospect using email?

We find new B2B leads via email and will continue in 2012

We have prospected via email but will reduce/ stop those efforts in 2012

We have not prospected by email but plan to do so in 2012

We don’t propect via email and will not do so in 2012

15%

7%

66%

13%

Q9 If you prospect via email, where do you get the addresses?

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0Direct from

prospects via web registrations, other online

opt-ins

Other Third-party email opt-ions

Purchase/rents lists from brokers/

compilers

Lists controlled by third-party

affiliates

76%

31%

25% 22%18%

Automated harvester software

8%

5


disregarded. Some B2B marketers are still just not persuaded that email prospecting works. Among those who do use it, the most common way to build a house mailing list is definitely to ask prospects to opt in directly [Q.9]. That’s a lead-gen method deployed by more than three-quarters of the B2B marketers polled (76%). Less than half that proportion also (or instead) pursues the next closest tactic: buying or renting lists from brokers (31%). Even fewer tap into lists amassed by affiliates (22%) or garnered by being included as opt-in choices in third-party emails (18%), or through automated harvesting (8%). That substantial “other” response includes a range of low-tech, labor-intensive retail tactics such as “calling companies for the correct person to contact and asking for their email address.” Respondents from B2B companies that do use email as a prospecting tool were asked to cite all the applicable reasons [Q.10]. As it turns out, a strong four fifths of respondents (80%) like the low cost of the email channel, exactly matching the proportion who favored email for price in last year’s survey. The ability to track and measure response was chosen by over half of the respondents (55%). Perhaps significantly the ability to personalize email content and offers saw a big increase in citations over last year (to 54%, up from 48%)—perhaps reflecting an interest in the same email customization that has been wildly successful for B2C marketers such as Gilt Groupe. Certainly personalizable content has moved up to third among email’s favorable attributes for B2B lead-gen, outpacing the channel’s power to drive opens to a web site (39%) or its mass reach (34%). Also showing increases were the power to test content or offers within email to find the optimum format (31%) and the ability to target email by region, customer demographic or even daypart (30%). And the ability

to personalize content, while tailoring their offer was checked off by 54% of the respondents. Just as telling were shifts in the reasons why that 25% of B2B marketers who said they don’t use email for lead-gen are staying away [Q.11]. Previous surveys found most non-users pointing to fears of looking like a spammer either to their prospects or to their ISPs. That’s still a consideration for 27% of the group not prospecting in email. And 21% of the group answering this question says the open rate on acquisition B2B email is too low,

raising the prospect that those senders may look even spammier to service providers. But spam fears are not the dominant reason for avoiding email lead-generation, which is now the simple fact that there are many other prospecting channels with greater appeal (45%). What these attractive acquisition alternatives are will have to be answered in another survey. But the fact that they exist and either minimize email’s risks or improve on its returns is sufficient to lead these marketers to prospect elsewhere.

Q10 If you prospect via email, what are primary reasons?

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0Relatively low cost

Able to personalize

content, offers

Mass reach

Shareable via social networks

Able to track,

measure response

Drives traffic to web site for fuller

engagement

Targetable by geo/demo/

daypart/other criteria

Able to test/ optimize

content or offers

Can be triggered by user

behaviors

80%

2011 2012

80%

53%55%

48%

54%

40% 39%32% 34%

26%

31%

26%30%

17% 16%11%

14%

Q11 If you don’t use email for B2B lead-gen, why not?70%

60%

50%

40%

30%

20%

10%

0Other lead-gen options more

appealing

Too hard to break through mailbox clutter

Fear of looking like a spammer to prospects

or ISPs

Open rates on lead-gen email

too low

Too expensive/not enough ROI

Can’t collect enough

addresses to be effective

Can’t deliver effectively to

mobile devices

2011 2012

37%

45%

30%28%

38%

27%

13%

21%

10%

17%20%

16%

5% 7%

6


Some respondents wrote in other specific reasons why their companies do not expect to conduct email prospecting. “A personalized DM [direct mail piece] works better,” said one respondent. Another stated that they were using social media to prospect and email to enhance the conversation and sales process. The ease of deleting the email without being read was cited by another respondent and still another respondent said, “We find it a useful tool, but our internal call center is much more effective…” Meanwhile B2B marketers have other problems with email prospecting. Some 28% of non-users said they are more concerned about simply being noticed in cluttered mailboxes—about the same as the contingent fearful of looking spammy. The group also cited a relatively poor ROI for acquisition email (17%), the difficulty of amassing a house mailing list (16%), and a new concern: the inability to deliver email safely and effectively to mobile devices (7%).

B2B’s Social Position

As noted above, B2B marketers forecast that their use of social media channels for lead generation will increase by some 20 percentage points this year, rising to 68% of respondents who say they will prospect in social in 2012. While noting that some of that forecast is participation still to come, it’s instructive to find out what B2B marketers are doing now to drum up new business within social networks, forums and online peer groups [Q. 12]. According to Chief Marketer’s findings, 28% of B2B respondents to the survey say their company is not participating in social media right now. Putting that response group aside, 45% of those polled say their company’s primary social prospecting strategy is simply to work on building relationships and a general brand awareness in social that will lead prospective buyers to think of them at purchase time.

Twenty-one percent are more tactical and say they are using their B2B brand’s social presence to bring visitors through to the company web site, where presumably more targeted messages can be delivered and more qualified leads can result. As might be expected in B2B, relatively few marketers said they are looking to social media for direct sales (3%), for gathering leads through social-specific offers (2%) or for viral spread of their marketing message (2%). As with prospecting use of the

email channel, the survey asked marketers to identify what they feel are the most prominent hurdles to effective B2B prospecting using social media. (In this case the question went to the whole response group, since even marketers currently using social lead-gen may have opinions about its drawbacks.) In social’s negative column, almost half of respondents (46%) cited social media’s continuous hunger for fresh content as an obstacle for getting involved with social lead generation [Q.13]. Two in five also mentioned

Q12 Characterize your brand’s approach to lead generation in social media.

70%

60%

50%

40%

30%

20%

10%

0We’re building

relationships and awareness that may

convert to sales down the road

We’re not currently

taking part in social media

We’re using social media

to point to our web site

We’re selling directly within social networks

We’re using social media

to gather registrations

via offers

We’re gaining viral spread

by urging fans to share our content in

social

45%

28%21%

3% 2% 2%

Q13 What are the biggest obstacles to B2B lead generation in social media?

70%

60%

50%

40%

30%

20%

10%

0Social needs

more content, resources than trad’l lead-gen

Prospects dislike being marketing in “commerce-free” zone

Unable to measure ROI effectively

Social media not relevant to our main prospects

Social does not produce

qualified leads

Too many platforms

to evaluate, understand

46%40%

32% 32%28%

21%

Other

7%

7


the difficulty arising from a fear that potential prospects in a social space online, whether a network like Facebook or a third-party forum for professional discussions, may tend to dislike receiving marketing messages in a “commerce-free” zone. Other trailing objections to prospecting using social media are the channel’s irrelevance to target business customers (32%), the difficulty of filtering out unqualified leads (28%) and the basic profusion of social media platforms, confusing marketers about which are best for their prospecting purposes (21%). In their write-in answers in this section, respondents are forthright about the mixed benefits of social media for lead generation and for B2B marketing broadly. Although many agree that social media has opened new avenues for finding new customers, opened new channels and created a better understanding of the customer, they also say the social channel has added new levels of complication for the marketer and that the resources required for social media can strain a marketing team, while adding more “noise,” “clutter” and unqualified prospects. “Joining the conversation versus preaching allows customers to feel a genuine interaction with a brand - much more valuable than what you can get from an email or flyer,” one respondent affirmed. Another commented, “Generally, it’s made

[prospecting] more difficult. Digital marketing is always a moving target, but the explosion of new channels has added complexity across all phases of marketing, from planning and strategy to content strategy and experience to conversion, retention, measurement and optimization.” What marketers do agree on is that a successful social presence is a complicated process, one that adds layers of complexity to the simpler tried-and-true prospecting avenues. And, more than a few marketers struggle with effective implementation of the ever-changing lead-gen capabilities of what one responder termed “the wild west digital frontier.” Although everyone agrees that Social Media has grown to be a contender with traditional prospecting methods, another B2B marketer’s comment express a frustration shared by many respondents: “The use of social media absolutely opens up more avenues for finding customers. But there’s also so much information to learn and when you think you have a handle on it, it changes.”

About MeritDirect:MeritDirect is a recognized leader in the B2B and B2C direct marketing industry, offering marketers integrated marketing solutions with an array of products and services. Mailers and list owners achieve a superior return on their marketing investment through MeritDirect’s list brokerage, list management, customer list enhancement and optimization, marketing databases and interactive services. For additional information, visit meritdirect.com.

About Penton:As a leading, independent, business-to-business media company, Penton knows business and how to create and disseminate the vital content that moves markets. Penton is where professionals turn to gain the critical insight, expert analysis, and relevant connections needed to compete and succeed. Penton is a privately held company headquartered in New York City. For additional information, visit www.penton.com.

About Chief Marketer:The Authority on Measurable Marketing & Operations, symbolizes the new imperative in marketing—to link increases in revenue to their associated marketing campaigns, and to the specific marketing resources invested. For additional information, visit Chiefmarketer.com.

MethoDology:An online poll of 346 B2B marketers was fielded by Chief Marketer from November 10 to December 19, 2011. Respondents came from a range of industry verticals, including manufacturing, retail, financial, health care, travel, entertainment, advertising, publishing and non-profit sectors.

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