Business Services

Shifting Demand Generation for Top Performance

Alexander Group leader Kevan Savage spoke with colleague Mike Burnett, principal and Business Services practice lead at Alexander Group, on the recent Alexander Group’s Demand Generation Performance and Investment research.

Mike shared demand generation challenges in business services and the shift in alignment between Marketing, Sales and Service to become a segment-oriented structure.

Kevan Savage: Good day everyone. Thank you for joining Alexander Group today for Shifting Demand Generation for Top Performance, a recent demand generation, performance and investment research study commissioned by our firm. My name is Kevan Savage. I run our marketing practice at Alexander Group. I’m joined by my colleague Mike Burnett, who is a principal in the firm and co-leads our business services vertical.

Kevan Savage: Mike, thanks for joining us today.

Mike Burnett: My pleasure. Thanks, Kevan.

Kevan Savage: We have some great findings around our recent research on the topic of demand generation to share with the audience today. One aspect of the research we wanted to do slightly different this time around for demand generation is we wanted to recruit participating organizations that came from what we’d call more of a healthier profile. These are organizations that were on track to exceed their revenue plans, had an average revenue growth rate of about 6 to 10%. The reason for that is we’re want to look at demand generation as an incremental growth accelerator for organizations, not just a way to get to their plan or their targets. So, that was the starting point for our research in terms of recruitment. And we have some interesting findings to share. So, first up on the investment front, significant demand generation investment growth being reported in budgets. Some of those investments are to sustain some of the demand generation activities for business services organizations. But there’s a few sided activities that are new we’d love to share with the group today.

One is around AI, and AI is everything and everywhere for everyone, it seems. But more specifically for this study, participants cited AI for SEO development, content aggregation to really build out that mid-funnel content that historically marketers have not been able to create. So, those are things like knowledge centers, education hubs, mid-funnel content that have better conversion opportunities as you point those demand generation campaigns towards. Second point – account-based marketing continues, but a little different, where demand gen investments are getting tied to coverage models and segmentation tiers in terms of where to put the dollars and where to put the specific coverage of those demand generation campaigns in the marketplace. We have not seen that historically, so that’s something great to hear from our participants. The third point is around virtual roundtables and forums. All of our participants said look, events, conferences, webinars, yes, we have to keep doing those things. Those are important for our brand, but we need to find new venues, as we call them, as smaller settings, better thought leadership opportunities where we can point our demand generation activities and we can see better conversion rates from those activities as well. So, a couple of interesting activities cited there by our participants. We also asked some questions about what is marketing contributing to pipeline. We had participants ask us, hey, my executive team is asking me what percentage of my pipeline should come from marketing versus other functions. Well, for this study, what was reported that number is 38%. 38% of marketing organizations and business service organizations contributing to pipeline development overall.

Then we asked a series of questions from our participants around the qualification rates and of course, the thing that everybody cares most about the bottom of funnel performance. So, qualification rates up 108% year over year. What that means is better marketing qualified lead to sales acceptance qualification. So, business services organizations are not only getting better investment, they’re driving better funnel velocity, better qualification, and better alignment with their sales organizations. One participant cited the key to that 80% or more of our participants in the same boat. All about segmentation and ICP alignment across the selling teams and the go to market teams. 48% growth in closed one revenue year-on-year. So, significant growth in revenue profiles and what that means in terms of demand generation investments, as we’re seeing healthy return on investment profiles. And if you wound back about a year ago, you didn’t see these same dynamics. So, I want to unpack a little bit of what we’re seeing in the industry and get some vertical insights from my colleague Mike here.

Mike, maybe to open it up with the first question, what are you hearing? What are you hearing as challenges from your clients on the topic of demand generation?

Mike Burnett: Yeah, I think there’s really two that come to mind. Kevan. First is there’s no disagreement around the need for better measurement of marketing contribution. However, there’s a lot of disagreement and a lot of consternation around what’s the best way to measure and track and attribute revenue back to marketing. As we know, there’s different methodologies. I don’t know if I have a crystal clear answer in terms of which one’s best, but what I do know is you’re better off picking one, sticking with it, rather than trying to constantly debate what revenue is actually influenced by or actually being delivered via marketing. As long as you have one methodology, it tends to be best if you can stick with that rather than constantly debating and continuing to really argue over what is attributed to marketing. The second thing that I hear quite a bit in B2B services is really a struggle between how marketing fits into an environment where sellers and service delivery team members, mind you in B2B services there’s an overlap of all these functions with existing customers, there’s a question around how does marketing drive impact with these existing customer relationships and ongoing delivery work that’s going on? There’s a lot of concern around bombarding customers with too many messages, perhaps mixed messages. We need to make sure that we’re being mindful around how we engage with those customers without overwhelming them. That’s a thing that we hear constantly in terms of concern around what’s the right amount of touch, as well as what’s the best method in terms of delivering some of those messages.

Kevan Savage: Those are great points, Mike. And, you know, going back a little bit to your comment around the measurement of marketing contribution. Just want to echo what you said. One of the recommendations we will make often in discussion with marketing leaders is that you can be on a last touch attribution model or you can move off that model into something else. And what we typically recommend is, because you usually start in the last touch model, track that keep that constant as you shift to another model, track that concurrent with your prior model. So, you have the historical attribution in place and the consistency in reporting, and then you can almost simulate what the shifts in the model are going to look like. So, a lot of best practices from organizations are adopting that approach, and they’re finding it as a great way to socialize the collective contribution of marketing in organizations. So, I think you raised some really good points there. So, it takes a team and it’s not not marketing or sales – it’s an “and”. So, talk to us a little about team alignment. Any best practices you can share with us today?

Mike Burnett: Especially in B2B services, I think there’s a shift or an aspiration that a lot of organizations have, which is to really align their sales and delivery teams not from a offering vantage point and organizational structure, but to more of a segment-oriented structure. So, think about the end markets that you’re serving. And more and more we see service and sales teams being oriented around that structure, really getting closer to segments. I’ve seen in a couple instances where marketing organizations are trying to introduce that shifting from more of a product marketing orientation to more of a segment oriented point of view in alignment. I think that’s opened up a lot of doors for folks. Not just in terms of getting better coverage of the market, but driving better alignment, where there’s more frequent communication between marketing and the sales and delivery teams in terms of what messages are resonating, what are the challenges that we’re seeing our customers face. So, we’re getting better alignment in terms of messaging, but also just quite frankly, better day-to-day coordination, as we’re thinking about executing campaigns and conducting outreach to very specific segments that can be pretty dissimilar depending upon the space that you’re calling on.

Kevan Savage: We talked about investments in the executive summary of this research. Obviously, investment needs efficiency. It needs the coordination we just talked about across teams. But as we think about these investments increasing at the rate that they’re increasing, at 111% year over year, what do you foresee changing or having an impact on sales, or partners, or dealers, or however companies are going to market in an indirect or direct kind of mode?

Mike Burnett: Yeah. Happy to. I think mine is pretty simple, but it should be hopefully translating to greater trust from the sales team in terms of what marketing is able to deliver. This means getting excited about leads that are coming over, trying to avoid that telltale story of sales, complaining about the quality of leads. To your point, if there’s hopefully more focus on quality rather than quantity now, sellers should be able to have more confidence and leadership should have more comfort knowing that sales is going to be following up and making sure that we’re maximizing potential ROI on this really important activity that marketing is driving. So, I think it’s a simple one, but I think it’s important, because ultimately it builds even greater trust and collaboration between the functions when sales, who ultimately is one of the biggest beneficiaries of marketing, really gets to see the added benefit. And they’re successful in their own right in terms of driving productivity.

Kevan Savage: Mike, I want to thank you for your time today and sharing some of those insights with the audience.

Mike Burnett: Thank you for having me, Kevin. It’s my pleasure.

Kevan Savage: And to the audience, thank you for joining today. Shifting Demand Generation for Top Performance Alexander Group’s Demand Gen Performance and Investment research. To learn more about the study and schedule a complimentary briefing, go to Alexander

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