Businesses must strike the right balance between inbound and outbound techniques to succeed at lead generation
An existing B2B lead generation process may work well with existing products / markets but what happens when a business tries to grow? In this article I present the four most common growth strategies and suggest some associated lead generation techniques.
A Cautionary Tale
To illustrate what can go wrong, an example may help. The company was a dominant force in components for high-reliability markets like oil and gas. Business was good but the company identified the limitations of its existing market and decided there was a need to diversify into commercial markets to grow.
Their approach was to take their most successful products and using different materials and manufacturing methods produce cheaper and simpler variants for the commercial market. They identified potential volume markets for the products, assessed price points and designed and manufactured products to fit. What happened? Suffice to say the results did not live up to expectations
It is perhaps easy to spot what went wrong but to be fair to them ‘hindsight is 20:20 vision’. Fundamentally, they picked the wrong growth strategy then made several key mistakes in the implementation of that strategy. Again, to be fair, I would be prepared to bet there is many a company in the process of following the same doomed strategy today.
Strategies For Growth
Accepted wisdom shows there are four main growth strategies
- Market penetration.
- Market development.
- Product development (upgrade/variant).
- True new product development.
These I have ranked from lowest to highest risk but also from lowest to highest potential value. The company described above jumped in at product development when perhaps the market penetration or development routes would have been a safer bet.
Market penetration strategies are focused on taking competitor market share in the current market segment and/or increasing the quantity, mix or value of product taken by existing customers. This contrasts with market development which is based on taking existing products to new market segments
Product Development is similar to market development except it is based on taking a variation of an existing product to new market segments. The more risky (but potentially higher reward route) is true new product development based on delivering something that is entirely new to the marketplace
Lead Generation – An Overview
Whichever route to business growth is chosen the steps taken to generate leads are the same, they are:
- Identify the key market segments
- Identify the target customers within those segments
- Research needs of target customers, including their information needs
- Define products / solutions appropriate to the identified need and segment
- Decide on the best way to reach the target customers
- Define an appropriate marketing process
With market segments, target customers and appropriate products or services defined the next important step is to raise market awareness to ultimately generate sales leads. The marketing process will differ according to the growth strategy but in all cases the first important step is to increase the target contact base.
Whatever marketing approach is employed it will only reach a percentage of the total available contact base. Increasing the total therefore increases the number reached and (assuming contacts have been targeted and added appropriately) increases the number of leads.
Market penetration strategies rely on finding more potential customers (and contacts within those customers) in existing segments. Market and product development requires finding new potential customers in new target market segments. The same applies for the new product development growth strategy.
Inbound v Outbound Marketing
Any Ad Hoc approach to marketing is unlikely to generate the high quality sales leads required to support growth. A plan, a process and consistent delivery of that process over the long term is, I suggest, the only way to generate the required results. The problem for many businesses is it takes both belief and courage to see a process through and in demanding market conditions, with a demanding set of stakeholders they both tend to be in short supply.
All the marketing chatter may be around inbound marketing but there are two major problems that are often glossed over. Firstly, it takes time for the results to start to flow and, given the issues discussed above, that is a real problem. Secondly, there is little point creating useful content if it not read and engaged with by the target audience. There are major challenges associated with deciding on the best delivery channels (both online and offline).
The type of content and the channel used will change depending on the growth strategy. For example, for true new products it is necessary to find the early adopters. Where do they source information, what type of information are they looking for?
Outbound techniques remain a valid part of the mix. When used appropriately as part of a process they can take the pressure off to give the inbound process time to work. Perhaps more important they are a route to gently push content out rather than hope that it is found and engaged with by target prospects.
Outbound Is Alive And Well
A recent Institute of direct marketing (IDM) report stated 49% of marketing budget spend was on traditional outbound marketing in 2014. It shows the percentage of B2B marketing spend allocated to outbound tactics as follows
- Trade shows / exhibitions 15%
- Email 12%
- Direct mail 5%
- Telemarketing 2%
- Traditional advertising 1%
Insignificant you may say but Trade shows / exhibitions was the largest single tactic. Email ranked higher than SEO/PPC and direct mail was above social media. Just a time lag process as the market adjust to inbound you may think but the survey shows 20% of respondents expected to increase spend on exhibitions in 2015, 36% expected to spend more on Email and, at the lower end 6% expected to increase telemarketing spend!
Yes, businesses make individual bad decisions on spend but as a trend the above cannot be ignored. Yes, the survey shows a shift to inbound marketing but to consider outbound dead and buried is not valid.
Trade shows and seminars remain a great place to make a statement when pursuing market development, product development and true new product development growth strategies. Email remains a great tool to push out high quality content and even telemarketing can be effective if combined with content.
The inbound concept is great in principle but there still must be a means to know your potential customer and to reach out to them. All that has changed is that reach should be softer and supported by valuable content
Process Is The Key
What really matters is not inbound or outbound but a combination of both specifically designed to match the growth strategy. Whatever the process may be it must be fed with high value content. The type of content and the distribution of that content depends on the growth strategy pursued.
There may be an online loop that includes Website (as the information hub), Blog (and blog promotion), SEO (and perhaps PPC) and Social media. Email marketing may be used (E-Newsletter) as a medium to deliver content directly to potential and existing customers. Content may be distributed via magazines and offline media and telemarketing can be used selectively to engage prospects in a content loop. Carefully selected exhibitions and seminars may complete the process.
The key is to identify a growth strategy, research the market appropriately, evaluate risk then build a plan and process and have the fortitude to execute that plan to deliver the growth the business requires. In my example above the business failed on all counts. They failed to identify the correct growth strategy, their market research was minimal and based on invalid assumptions and they failed to understand the target market and build an appropriate promotional plan to address that market.