Marketing has changed dramatically over recent years, as the cost of reaching contacts you have in your database approaches zero. Twenty years ago, things were different: it was expensive to reach contacts in your database as postal direct mail, telemarketing and sending sales people were all expensive pursuits. Databases could become out of date before marketing teams had sufficient budget to reach contacts and therefore accessing third-party relationships (for example mailing lists, readers of publications and trade show visitors) was a cornerstone of marketing practice.
Today there are even more places where you can take advantage of another company’s relationships: social media platforms such as Facebook and LinkedIn have gigantic audiences and are more than happy to take your advertising money. At the same time it’s easier than ever to reach people on your database. Direct email is fast, cheap and simple, while marketing automation and modern CRM tools provide the intelligence to ensure communications can be highly targeted (although not every email marketer has got there!).
Many people characterize the situation as a conflict between “owning” an audience vs. “renting” the audience, as if the choice is mutually exclusive. If your relationship is directly with the contact, then you “own” them, while using third party platforms or publications to reach people is “renting”, and you should pick one or the other. We’ll see this is a very misguided approach.
It’s pretty clear that B2B marketing budgets are moving towards ownership of contacts: while marketing automation tool vendors prosper, we’re seeing trade publications struggle. To be fair, most social media budgets are growing, but this is probably more due to the newness of the medium, and often the budget is growing at the expense of other “rented” sources of contacts from trade shows to publications. At Napier, we’ve seen the trend and are actively helping clients develop their marketing automation and Inbound marketing strategies that make use of, or build, an “owned” audience.
Despite the excitement, attractive economics and shiny new marketing technology toys, we’ve not given up on other approaches. The ability to build a database of your company’s fans is great, but it’s important to remember that there are many potential customers who haven’t yet graduated to fandom, and they’re much less likely to give up their details for your white papers or email newsletters. These potential customers represent the biggest opportunity for growth for many companies. If you focus on only the contacts in your database, you’ll be talking in a private bubble. Yes, the vast majority of contacts will be interested, and they’ll click on your email links, but many of the were going to buy your product or service anyway!
Our approach looks at three distinct stages of the marketing funnel. At the bottom we help clients generate engagement with the contacts on the database. But before you can gather contacts and generate leads that can be engaged, you need to generate awareness. Potential customers with limited awareness of your company, products or their benefits are not going to be on your databases, and so you need to reach them on platforms like publications’ websites, newsletters and social media.
The key to effective budgeting is understanding your marketing funnel and addressing the weaknesses. Not enough leads? You need to focus on the top-of-the-funnel awareness and lead generation activities. If, however, you’ve got a lot of great leads who are not yet customers then your time and money should focus on engaging them with marketing automation and other direct tactics. Understanding the situation and getting the budget right means you’re then in a great position to move prospects through your sales funnel. At this stage, it’s all about the speed that you can convert awareness into opportunity. Increasing the velocity of prospects through the funnel is one of the core competencies of Napier, although the explanation of how we do it will need another blog post.