Table of Contents
- 1 B2B market development takes time is essential for any new product from proof of concept to your go-to-market plan.
- 2 What is market development?
- 3 Your B2B market development is all about ROI and your hurdle rate
- 4 1. Securing Required Budget for Market Development
- 5 2. Lack of Results from Traditionally Successful Vehicles
- 6 3. Sales and Marketing Creating a Frictionless Integration
- 7 4. Sales Aren’t Following up on the Marketing Leads for Your Market Development
- 8 Understanding How Sales Sells, and Customers Buy
- 9 Customer-Buying Process
- 10 The Sales Process and Market Development
- 11 Cultivate Your Prospects into Clients, Don’t Solicit Them
- 12 Have a Finite, Specific, and Measurable Purpose for Market Development
- 13 Add Value to Your Customers or Prospects
- 14 Enable Salespeople to Uncover and Diagnose Business Problems
- 15 Have Tangible Impact on Moving Accounts Through Stages of the Sales Pipeline
- 16 5. Arm Your Advocates Inside a Prospective Account to Sell for You
- 17 We’re listening to your thought about market development.
- 18 General FAQ’s
B2B market development takes time is essential for any new product from proof of concept to your go-to-market plan.
Whether your market development takes time. Your product may be a better mousetrap or a game-changer, your B2B market development will take time. So plan accordingly.
At executive staff meetings, CEOs are asking tough questions:
- Can we tie revenue generation back to branding efforts?
- We have to manage costs, so should we cut marketing’s budget again?
- What are we getting for our marketing investment? Let’s spend more on sales instead.
- What is marketing doing to help generate sales?
Market development definition: Market development is a growth strategy that identifies and develops new market segments for current products.
What is market development?
Market development is a marketing strategy in which a company tries to sell an existing product to a new group of consumers. To increase sales, the company pitches its product to a new segment of target customers.
Market development is a growth strategy that identifies and develops new market segments for current products. A market development strategy targets non-buying customers in currently targeted sectors. Market development is a marketing strategy in which a company tries to sell an existing product to a new group of consumers. To increase sales, the company pitches its product to a new segment of target customers.
Your B2B market development is all about ROI and your hurdle rate
As closed deals become fewer and smaller, sales cycles get longer, competition intensifies and then sales organizations have a tendency to unleash a flurry of activity.
However, increasing sales activity without a focused, coordinated strategy with marketing will prove unproductive. Profitability can be enhanced through a more focused marketing and sales approach.
Economic downswings place increasing pressure on sales organizations. As customers cut back spending, there are fewer deals and smaller purchase sizes.
Painstakingly cautious customer purchase decisions lead to longer sales cycles and higher sales expenses. Price pressures and competition intensify as players become more aggressive and compete for the same set of small deals.
Marketing organizations are being forced further down into the sales process to a degree not seen even in the past two years. Although lacking significant sales experience, CMOs are being held accountable for revenue targets.
Four categories of frustrations exist among marketing executives:
- Securing the required budget
- Lack of results from traditionally successful vehicles
- Sales and marketing integration (frictionless transitions)
- Sales not following up on marketing leads
1. Securing Required Budget for Market Development
Marketing budgets are being treated like a discretionary expenditure rather than a critical business function. Existing budget items are being scrutinized and slashed.
Getting new funds approved requires an expected return something some marketing organizations don’t have or can’t show.
While many departments are doing a good job of measuring expense-related attributes, they have found it difficult to produce evidence that shows objective relationships between marketing investments and revenue.
Not able to defend budget requests, marketing executives are now faced with doing their daily tasks (brand building, lead generation, public relations, search engine optimization, content marketing, collateral development, social media monitoring, etc.) with the increased demands of assisting sales with a smaller budget.
2. Lack of Results from Traditionally Successful Vehicles
Besides increased budget scrutiny, marketing vehicles that were the old standbys in the past are no longer viable or are uncertain. There is a lot of confusion about the best way to spend marketing resources.Â
According to Adobe’s recent study of CMOs, advertising, trade shows, direct marketing, and promotional investments are falling out of favor; while corporate websites, social media, and content marketing are considered the most effective investments.Â
It is interesting that the tools which are passive and least likely to generate new leads are the areas considered most effective.
Advertising can be an excellent vehicle to promote the brand, generate awareness, or promote visibility. However, it is very difficult to show how your products solve a tangible problem and what the return might be.
Direct marketing isn’t generating the expected results, nor do many marketing executives have much effective experience with these vehicles. New ways to market and sell, like social selling, are promising, but bandwidth limitations are proving to be more of a distraction than an effective marketing vehicle.
As the pressure mounts, executives are searching for marketing vehicles that produce results. However, despite their efforts, each path they pursue seems to be a dead end.
3. Sales and Marketing Creating a Frictionless Integration
Sales and Marketing professionals have very different perspectives on market development and can feel like they are speaking different languages.
This often results in marketing having poor credibility with the sales force making it difficult to get sales to engage in or cooperate with marketing programs.Â
Even when marketing tries to reach out and ask the sales force what they need to be more effective in their jobs, the results are often disappointing.
Either marketing has a hard time understanding what sales needs (resulting in a frustrated salesforce), our sales will make vague requests (I need an eBook) and then complain that what was produced is not what they asked for.Â
And these problems are in firms where marketing and sales are trying to work together. In many companies marketing thinks the sales organization cannot sell, and sales think marketing is a complete waste of money.
4. Sales Aren’t Following up on the Marketing Leads for Your Market Development
Considering the effort and resources it takes to generate leads, it can be frustrating to watch how leads are handled. The sales lead black hole the 70% of leads generated by marketing departments that sales representatives do not pursue may result from competing demands on salesperson’s time.Â
Other reports like the one from Harvard state this number as high as 80%. This is a symptom of the credibility issue mentioned above salespeople assume that leads that come from marketing are poorly qualified and will be a waste of their time.Â
To make matters worse, most marketing organizations do not know how many of the leads they produce are being followed up on by sales.
Once a lead is produced and handed over to sales, it is often never heard from again. Without an effective lead tracking process, it will be very hard for a marketing organization to show its contribution to that (or any) sale.
To summarize, marketing budgets are under increasing scrutiny and executives are being asked to contribute more to the sales effort. But, the tried-and-true marketing vehicles that have been effective in the past are not delivering the same results.
Marketing executives are struggling to identify the programs which will produce the best results. Yet, regardless of what they do, they can’t make a positive impact on sales if they don’t improve their credibility enough to get sales to engage.
Understanding How Sales Sells, and Customers Buy
Why does marketing face the impossible task of contributing to the bottom line with fewer resources, less effective vehicles, and no support from sales?
The problem can be broken into two basic categories:
- A lack of understanding of the customer’s buying process (or the buyer’s journey)
- Marketing’s restricted understanding of the sales process
There is a major disconnect between the way B2B companies buy products and services and the way they are marketed. To begin with, any vendor selection involves a variety of stakeholders and involve a complex buying journey.
Depending upon the offering, these stakeholders may include a selection committee, an executive sponsor, a project manager, technical specialists, and end-users.
Each one of these stakeholders will test the merits of your offering from a different perspective, and against different criteria.
Marketing materials should help these various stakeholders evaluate your offering in their specific context.
Without the appropriate information, these stakeholders will demand more resources from the sales executive or even worse, get information from other sources that threaten your influence in the buying decision.Â
Layer on the fact that the Internet has given the power over to the buyer. They can research, compare, and ask their network for advice and recommendations like never before. This process has compressed the buying cycle and prepared the buyers with insights that have never been available to them before.
In addition to identifying the people involved in the customer buying process, we must understand what aspects of your solution each will want to analyze.
For example, companies often review the total cost of ownership, how scalable your offering is, and how well it conforms to the company’s existing business. Perhaps most important, if the money is not already in the budget, they will examine how critical the problem you’re offering addresses compares to other problems the company faces.Â
This point is often overlooked, as most marketing materials are geared to a buyer who has already determined he needs what you are selling. Often your competition will not be another provider of your solution, but a different way the company might use the money.
Another factor to consider is that organizations have different sensitivities at different stages of the buying process. Very early, the focus is on identifying the business problems associated with your offering.
However, over time the focus will shift to issues such as price (what you charge), identifying the whole solution (all the resources required to execute your offering), and to risk (what happens if).Â
Since prospects never go through all of these stages in a single meeting, tools should help your customers achieve the milestones necessary to advance to the next stage in their buying process.
All too often, marketing tools created to support all of these variables will include a corporate brochure, an eBook, infographic, white paper, a product brochure, a product specification sheet, and a product demo.
These all are feature specific. These deliverables fall short of meeting the organizational needs, and therefore the onus is placed on the salesperson and his/her champion within the account to articulate the benefits of your solution for that given organization.
Customer experience is the sum of all engagements a customer has with you during the customer life cycle.
This relationship is an ongoing evolution and a series of changes, comprising several moments of truth, beginning with awareness and discovery; shaped by information and interaction; defined by purchase and use; and reinforced by cultivation, loyalty, and advocacy.
Collectively these engagements contribute to the experience someone has and shares and ultimately to the state of the brand in aggregate. It’s a big deal, to say the least. There are so many ways we can get this wrong or right.
The Sales Process and Market Development
A solid understanding of the sales process is critical for any marketing executive. Everything that marketing does should support the range of ways in which the company engages with prospects. Consider brand development.
Your sales force communicates your brand with the prospects they meet. As a whole, they have a greater influence over the perception of your company than the marketing does.
Marketing cannot control the message, as each salesperson has their own sales presentation, writes their own letters, and has its own conversations with customers. As mentioned earlier, the success of many marketing programs requires the participation of the sales department.
The best way to establish credibility with the sales organization is to demonstrate a firm grasp of the sales cycle and to predict the kinds of resources that would be helpful at each individual stage.
While salespeople tend to focus on deliverables such as white papers, sales presentations, and product collateral sheets, there are a wide variety of tools and resources they require.
These include custom engagement tools, assessments, need creation and identification tools, internal selling tools, ROI calculators, prospecting vehicles, buying visual aides, follow-up letters and emails, account profiling tools, objection handling statements, compelling data points, reference stories, business problem training, etc. Did I miss anything?
It?s impossible for marketing to identify which tools are needed, or even to understand what sales are asking for when they make a request, without understanding the sales process.
Another common source of misunderstanding is the time-sensitivity issue. Salespeople would often prefer to get a ?work in progress? they can tweak for a given account than to wait for weeks while the final deliverable is polished and fine-tuned.
As another example, many marketing departments will wait until all leads from a given campaign are processed before turning them over to sales. This can take up a month, during which time the prospects have likely forgotten why they were interested in the first place. To establish credibility, marketing needs to show the level of urgency associated with sales.
Finally, as for leads, the worst-case scenario can often be when marketing qualifies the wrong type of stakeholder as a lead.Â
For example, a low-level person (no matter how interested they claim to be) is more likely to be a tire kicker and consume valuable company resources to educate them on your offering. A salesperson would rather work with people with decision-making authority than waste valuable time with someone who is not in a position to buy.
Cultivate Your Prospects into Clients, Don’t Solicit Them
Marketing has a tremendous opportunity to help their organizations develop a more predictable, higher-value, and accelerated revenue streams. To do this, marketing should develop structured and measurable programs, campaigns, and tools which add value to prospects while advancing the sales cycle.
Focusing on the buyer is the key differentiator between effective and wasteful campaigns. If a salesperson’s role is to facilitate their customer’s buying process, then marketing’s role is to help sales engage new customers in buying discussions and to help keep existing prospects engaged.Â
Focus your market development efforts on the customer’s buying process by design will do just that.
Too often, marketing materials go for the jugular. However, as discussed earlier, buyers go through a series of phases and involve different people throughout the buying process.
This process is not always linear. Therefore, break down their buying process into a series of steps and create the right materials and programs for each one.
For example, a program to make decision-makers aware of their problems is different than one helping them figure out how to solve that problem.
Both of these are required stages before a customer will buy a solution, yet most marketing programs assume they are past these stages and ready to select a product. All that does is make them feel sold to and confused and confusing prospects never buy.
With the customer as the design-point being the prerequisite, there are five (5) critical success factors to effective programmatic marketing campaigns.
- Have a finite, specific, and measurable purpose.
- Add value to your customers or prospects.
- Enable salespeople to uncover and diagnose business problems.
- Have a tangible impact on moving accounts through stages of the sales pipeline.
- Arm your advocates inside a prospective account to sell for you.
Have a Finite, Specific, and Measurable Purpose for Market Development
As we’ve said, complex buying processes go through stages. Marketing should identify the typical stages their customers go through in the buying decision, determine their customer’s needs throughout the process, and establish specific objectives and milestones in each stage.Â
This allows you to create the content your customers need to achieve each key milestone and advance their buying process.
Additionally, it allows you to set up performance measurements, to help you find bottlenecks, which will help you, improve each program, capture performance metrics, and communicate your results internally.
Add Value to Your Customers or Prospects
Many sales methodologies and training programs teach salespeople that their job is not only to communicate the company’s value proposition to the prospect but to also add value to the sales process.Â
However, few salespeople have the expertise to be able to be a value add on their own. Rather, it should be marketing’s role to provide tools that sales can use to deliver value while interacting with prospects.
The most common way for marketing to help sales be valuable is to provide the resources for educating customers and prospects.Â
If a sales rep can be seen as being thought-provoking helping a prospect understand a complex issue and how it impacts their company rather than sales like the salesperson will gain more credibility with that prospect and be in a better position to facilitate the buying process.
Enable Salespeople to Uncover and Diagnose Business Problems
Whether we care to admit it or not, people buy from people. Salespeople play a key role in market development efforts. All the emotional drivers learned in business school are secondary in a B2Bs sale. Organizations buy solutions to business problems.
They do not buy software, consulting offerings, or services. They are investing in your firm to realize the benefits of your solution.
The better you can equip your salespeople to find business problems and bring them to your prospect’s attention, the shorter the sales cycle and the larger the average deal size.
Have Tangible Impact on Moving Accounts Through Stages of the Sales Pipeline
If you want to speed up your market development you have to build your sales pipeline.
The sales funnel is the lifeline of any company and should be a focal point throughout the organization. Most marketing dollars are invested to create awareness or generate leads and focus on filling the top of the funnel.
However, these investments should be more balanced across all stages of the funnel because incremental improvements in each stage of the sales process can have multiplicative effects on revenue.
For example, if you have a five-stage sales process and you improve the percentage of opportunities that advance from each stage to the next by 5% points, you can more than double your revenue.
Plus, marketing campaigns focused on supporting later stages in the sales process serve to reduce the sales cycle time and increase close rate, which is much more likely to impact revenue than generating more low quality leads.
5. Arm Your Advocates Inside a Prospective Account to Sell for You
It is estimated that up to 80% of the buying decisions about your offering are made without a representative from your company involved.
With that much of the decision on the line, how are you equipping your internal champion to represent the compelling business solution you are providing?
Salespeople, who present your offerings every day for a living, have a hard enough time incorporating all the key selling points of your solution on each sales call.
You must provide concise and topical materials that will help internal advocates make your offering relevant to that organization.
We’re listening to your thought about market development.
Have something to say about your thoughts on B2B marketing development?
What is?market development?
Market development is a growth strategy that identifies and develops new market segments for current products. A market development strategy targets non-buying customers in current and new targeted segments.
What is a market development strategy?
A market development strategy targets non-buying customers in currently targeted segments and targets new customers in new market segments. Another way is to expand sales through new uses for the product.
What are the advantages of market development?
The advantages of choosing to engage in a strategy of market development include: gaining new customers, increased revenue, and brand growth. If implemented successfully, market development strategies can lead to competitive advantage and more market-share.
What is a market development plan?
Market development plan describes a specific business growth strategy through which your company enters into a new market with an existing product or service. Expanding your business into new markets can be risky, but it can also be profitable.