Outbound Marketing: Are Trade Shows Eating Your Budget?

The old adage is true:  Time is Money.  The more efficient your process is for developing customers, the higher the ROI on your marketing budget will be.

This month, we’re going to take a look at some of the traditional sources of leads and how much they cost.

We’ll start with the beast in all marketing budgets: the trade show. Of course, depending on the size of your company and the money you have to spend, the size of your booth will vary.

For this, we’ll consider a 30 x 40 space at Process Expo 2013. That puts our price per square foot at about $32, including drayage. We’ll also assume that you have an existing booth, so our estimate excludes a new custom booth build or rental. However, according to the Exhibit Designers and Producers Association’s 2011 Economic Survey, current custom exhibit costs range from $144 to $160 per square foot.

Projected Cost

Knowing that the B2B sales cycle can be quite lengthy, it will take a few weeks or months before you know for sure what your gross profit was from the Process Expo. For our purposes, let’s say you had a gross profit of $200,000 with 98 leads generated. Remember that gross profit only includes sales that happened as a direct result of your company’s attendance at the Expo.

  • ROI    (200,000 – 134,787) / 134,787= 48.3%
  • Cost per Lead 137,787/ 98= $1,375.38

Wow! An ROI of 48.3% is amazing! But wait. Is that your true ROI? And a cost per lead of almost $1,400! Let’s back this truck up.

The one crucial piece of the puzzle missing here is this: how many of these leads were qualified, sales-ready leads? And how many were garbage? According to multiple industry resources, anywhere from 5% to 30% of your leads from a given trade show are qualified. Meaning that’s the percentage of leads that have full contact information and application needs, etc.

So for argument’s sake, we’ll say that 30% of your leads from the above show were qualified. That translates to about 29 leads that can be handed off to your sales people right out of the gate. If your sales people have time to jump right on these leads, that is.

The stats below are from the Center for Exhibition Industry Research (CEIR), particularly, their Exhibitor Sales Lead Capture and Follow-up Practice Trends research report released in October 2012.

  • The top two most common methods organizations use to capture leads are: lead retrieval system offered by an exhibition organizer, 74 percent, and paper-based lead form/collect business cards, 59 percent.
  • Qualifying leads is infrequent, with only 30 percent of exhibitors capturing demographics and other lead qualifier questions, in addition to contact information and product or service interest information.
  • Customized emails, 64 percent, and phone follow-up tailored to address attendee product or service interests, 59 percent, are the most common follow-up methods. Fulfillment of these efforts is completed within two weeks by over 70 percent of exhibitors using each method.

The point is this: pre- and post- show connections are a vital part of trade show lead generation success. This includes comprehensive marketing tactics to bring traffic to your booth in the first place. Even if you come out with 29 “qualified leads”, those prospects still need further qualification before they’re ready to be handed off to your sales people. To say nothing of the other 67 leads, which deserve to be vetted as well. When all is said and done, your ROI is going to be driven down and your cost per lead driven up.

The bottom line:

B2B companies are allocating 12 percent of their budgets to trade shows but only getting 9 percent of their leads from that them. (Source: HubSpot)  Is it worth it?

B2B Customers Need Lovin’ Too

One of the most vital components of any successful marketing strategy is customer feedback. Or, more to the point, finding out what is NOT working for your customers.That’s right, leads that are qualified OUT are just as important as leads that are qualified IN and pushed along through the nurturing pipeline. Great companies always want to know how they can improve.

Backing up just a bit..

Just a few short years ago, most B2B companies were still completely averse to the customer-centric philosophies that their B2C peers have long since embraced. Today, however, the B2B world is firmly seated on the customer service bandwagon.The problem remains, however, that most B2B marketers are still missing the mark when deciding where and when to focus their budgets.

To right that train, B2B organizations need to develop a much deeper understanding of the modern Customer Decision Journey (CDJ). Where the old sales funnel assumed a linear purchasing path – customers take in information; narrow down their choices; kick the tires, and submit the purchase order – the CDJ moves away from the “funnel” way of doing things. It recognizes that the decision process, in fact, is anything but linear. (Forbes)

The B2B Customer Decision Journey

It’s not enough to identify the decision makers in an organization. For marketing and sales activities to be effective, companies need to focus on those points in the decision journey where they can be most successful in influencing those decision makers. For some that might be procurement or finance. For others, it might be the CMO or even the end user. And for others still they might be a specific set of segments. (McKinsey & Company)

If you want to read more about the Customer Decision Journey, there is an outstanding article here from The Harvard Business Review.

Beyond the CDJ

What marketers need to remember, however, is that just because the way in which we look at the B2B buying and decision-making journey has changed, our customers’ feelings have not. An unhappy customer is an unhappy customer, no matter what our fancy marketing charts and tactics may entail.

These are still facts that any good marketer should be able to deliver to his or her CEO:

  • What do our customers think about us?
  • What is it about our company that disappoints our customers?
  • What can we do to improve?
  • Are our customers happy with our customer service?
  • What isn’t working?

You may be asking yourself, “Can’t I find that out with some sort of customer survey?” Well sure you can, but a good quality survey takes time and money and usually only happens once per calendar year. “OK,” you say, “but that’s what my sales engineers should be telling me.” In a perfect world, yes, but let’s be honest- do your sales engineers have the resources and time to make that happen?

The Connects Component

With Connects, you get instant customer feedback through daily reporting. This feedback is infinitely invaluable to a CEO and can help companies immediately put more dollars on the top line.

  • What products work in certain industries and not in others?
  • Are there product features that need to be adjusted?
  • Are there business practices that need to be improved or changed?
  • Are you happy with your level of service and support?
  • Which marketing tactics work and which don’t?
  • Should you invest in that industry event or not?
  • Do you customers find your e-tools helpful?
  • Are there functionalities that would change that opinion?

Markets change so quickly. Your competitors change their products and product positioning so frequently that it can be difficult to keep track.There are too many things in terms of technology and methodologies impacting the market today, and economic struggles impacting your customers as well, to not invest in a daily customer feedback mechanism.

Salespeople usually aren’t frank enough to give you this kind of information. They tend to blame lost opportunities on products, be it price or features, while this may or may not be the case. The truth is that most sales engineers aren’t trained to ask the right questions and actively listen to get this information from people.

Due to time constraints, most sales engineers unfortunately drop the ball when it comes to service and support after a deal is closed. Customer service is so, so important, and Connects does this for you.

Failure is a strong word. It brings on visions of loss and defeat. In business, failure is just as important as success. Companies lose and gain market share all the times. It’s a constant battle to be the best or have the best product. That’s a good thing, competition means everyone has to be working hard to succeed. But for every winner, there are many losers. Failure is important because it helps companies and individuals to identify their weaknesses.
(Source: Mike Fisher, examiner.com)

The bottom line: 

No matter how you look at your customers’ decision-making journeys, always remember to find out your customers’ pain points.

B2B Marketers Need to Step Up Their Content Creation Game

According to a study released last week by the Chief Marketing Officer (CMO) Council, B2B marketers are doing a poor job when it comes to content creation.

First, let’s back up and define what we mean by content creation.

Content creation (marketing) is the art of communicating with targets and customers without selling or being overly promotional. Defined by SocialMediaToday, “Content marketing is non-interruptive — instead of directly advertising your products or services, you are communicating with your target audience by sharing valuable, free information. The core of this content strategy is the belief that buyers will be driven to do business with you if you provide valuable information to them on an ongoing basis.”

From the CMO study, Better Lead Yield in the Content Marketing Field:

“BtoB marketing organizations need to dramatically improve their capacity to generate and deliver trusted, customer-relevant and strategically unified content across a multiplicity of digital channels, formats and device types. Unfortunately, vendor content too frequently lacks value and trustworthiness in the eyes of BtoB buyers, who are increasingly turning to more trusted, peer-driven sources of content along their path to purchase.”

Referenced in the report, B2B companies are spending roughly 25 percent of their marketing budgets on content creation for their digital spaces, but they are falling short in the ROI department. More directly, according to the CMO, “very few have content performance measures and metrics in place to scorecard effectiveness and calculate ROI.”

According to Direct Marketing News, this means that “despite spending a quarter of their budgets on content marketing,  B2B marketers are still focused on giving sales pitches instead of imparting thought leadership.”

Ouch.

Some Key Findings from the CMO Study

  • Eighty-eight percent of respondents say online content plays a major to moderate role in vendor selection.
  • Some 28 percent say they share content with more than 100 colleagues while another 31 percent share it with 25 to 100 people.
  • Peer-powered organizations are the most trusted and valued sources of online content; 67 percent of respondents named research and white papers from professional organizations among their most trusted content sources compared to just 9 percent who named vendor white papers.
  • Other trusted and valued types of content include papers from industry organizations (50 percent); customer case studies (48 percent); analyst reports (44 percent); and independent product reviews (41 percent).

“Improving content relevance and performance is a strategic imperative for B2B marketing organizations,” said Donovan Neale-May, Executive Director of the CMO Council. “B2B buyers are looking for content that’s original, consultative and highly pertinent to where they are in their decision-making process. Too many vendors are failing these buyers with overly promotional and overly technical content that doesn’t adequately address market challenges and customer needs.”

The truth can be brutal, but as B2B marketers, we need to hear it:

  • Buyers are “migrating to peer-based communities and new sources of trusted, relevant and credible content and conversation.”
  •  “BtoB buyers and influencers are turned off by self-serving, irrelevant, over-hyped, and overly technical content.”
  •  “BtoB vendor websites are inadequate and hard to navigate”
  • “These sites lack the depth, objectivity and strategic context that buyers are seeking to inform and lead them through complex evaluation and purchasing processes.”
  • B2B Marketers “rely on poorly conceived content that doesn’t connect with customer needs and concerns.”
  •  “..blatantly self-serving and promotional content is a major turn-off cited by 43 percent of respondents, and exceeded only by content that comes with too many requirements for downloading (50 percent).”

Double ouch.

According to the study, content most valued by those making purchasing decisions is as follows:

  1. Association research
  2. Reports from industry group
  3. Customer case studies
  4. Analyst reports
  5. Product reviews

“Buyers want content from their peers, but if you can’t provide them that, at least don’t do a heavy sell,” counsels Bob Alvin, chairman and CEO of NetLine, a content syndicator that partnered with the CMO Council on the study.

What Should B2B Marketers Do?

Simply, understand your customers and purchasers. Don’t talk AT them, engage with them. Give them the information they need, not the sales pitch or information you THINK they need.

Here are seven strategies for creating content from Joe Pulizzi at the Content Marketing Institute:

1. Watch “Content 2020″ from Coca-Cola

Content 2020 is Coke’s “Jerry McGuire” mission statement on moving the organization from creative excellence to content excellence.

2. Develop your content marketing mission statement

Every person that touches the content marketing program should know, by heart, what the mission of the content strategy is.

3. A new mindset: Become the leading informational provider for your niche

Look, our customers and prospects can get their information from anywhere to make buying decisions. Why shouldn’t that information come from us? Shouldn’t that at least be the goal?

4. Utility is key

Take a hard look at your content and see if what you are producing is actually useful for your customers. Is it making their lives better or jobs easier in some way?

5. Define and answer your customers’ questions

This is so easy to do, yet most of us don’t do it. Do you have a system in place to compile the questions your customers are asking and post your answers to those questions on the web?

6. Employee involvement in content marketing

These are two great examples of successful content initiatives that have helped to grow business, were developed from the ground up with a limited budget, and were driven almost entirely by employee content.

7. Co-creation

It’s true that many brands struggle with finding the funding for content marketing projects. Why not work with non-competitive partners to develop amazing and compelling content for a similar customer?

The bottom line: Forget the fluff and the packaging, content should be useful and relevant- and driven by your marketing strategy’s objectives.