B2B buying today is led by complex committees seeking more control over the buying process. This geographically and functionally distributed set of buyers relies on 10 or more digital sources to build pre-purchase awareness and inform decision-making.
B2B sellers know that these changes in buyer behavior, combined with the looming challenges of third-party cookie data, are driving the need to reinvent B2B marketing.
The linear lead-to-MQL approach, which is focused on generating leads for net-new-customer acquisition, is giving way to a more comprehensive, inter-connected, customer-centric "revenue-marketing" approach where all marketing activities are directly tied to demand generation and revenue growth.
The lead-gen approach, which depends on bloated pipelines, tends to have a quarter-to-quarter focus on lead quantity. While this tactical approach may lead to a poor MQL-to-conversion ratio, a more damaging outcome is that often, strategic opportunities for growth and expansion within existing customers are overlooked or lost.
Revenue marketing, on the other hand, is focused on data-informed activities that create a long-term impact on not just customer acquisition but also retention and expansion, through the customer lifetime.
So, is lead gen ‘dead’?
The Problem Is Not Leads
Challenges aside, leads are not going anywhere. A recent B2B revenue marketing study found that 82% of marketers are measured on pipeline initiated (a 12% increase over 2021). For revenue of any kind, you still need a high-velocity pipeline. And that still needs high-quality leads.
Ben Lefkowitz, head of growth at content-based marketing solutions provider CONTENTgine, said that while interest in revenue marketing is a positive shift, leads are certainly not dead. “It's still very much an arrow in the quiver to build a path towards revenue,” he said.
Tory Kindlick, VP of demand generation at B2B demand strategy specialists Refine Labs, said a lead-centric approach can lead to a misallocation of efforts and resources because the spend/budget is optimized based on from where the highest volume of leads come.
Ultimately, he said, it is a question of where to focus limited resources. Focusing your time, energy or budget on generating more leads means focusing on short-term metrics that are unlikely to have a long-term impact. In a crowded and noisy market, this approach means marketing will need to run faster and faster to stay in the same place, starting from scratch each quarter to feed the pipeline.
Related Article: Should Lead Generation Guide Your Content Marketing Strategy?
Revenue Marketing Builds Brand Awareness, Qualitative Insights
“Moving toward a revenue-centric model allows you to focus on what truly matters — building true brand awareness, collecting qualitative insights from customers, and removing friction points from your buying process,” Kindlick said.
For example, tactics such as gated content create friction and do not contribute to the CX process. “Gated content only helps marketers know the ROI of content marketing and feed email nurture tracks," Kindlick added. "Neither of those outcomes serves customer needs better. Instead, pipeline velocity should be the north star metric to learn how effective your marketing efforts are. If you're doing demand gen the right way, pipeline velocity will increase over time. If you're not, it won't!”
For Lefkowitz, being revenue-centric is really about becoming solutions-oriented. This means an emphasis on content experiences, and being relevant and available when audiences need you. But, he cautioned, the shift away from a lead-centric model needs a careful balance. “If you just turn the lead-gen hamster wheel off, salespeople will leave,” he said. For many business leaders, resisting action is often safer than change.
What needs to change is not the idea of leads itself, but the process that determines the quality and effectiveness of the pipeline. That is what the revenue-centric model hopes to address.
Related Article: What's Next for Marketing Ops? 3 Considerations for 2022
Lead-Centric: Hangover from Marketing Automation 101
CMO and Growth Advisor Scott Vaughan says lead-centric strategies are “a hangover from the first era of marketing automation. These are no longer effective in the new buyer-seller equation, which is centered around lead quality and buyer experience."
Instead, Vaughan suggested replacing the lead-to-MQL approach — with its arbitrary scoring, automated phone and relentless email ("nurturing") blasts — with new GTM strategies that drive demand-to-revenue. For example, account-based strategies wrapped in buyer and account experiences, which are designed to engage customers through their lifecycle.
Intent data and decision intelligence are at the center of these new GTM models, providing not just higher-quality leads of in-market accounts, but also the context and insights needed to drive engagement, deliver experiences and optimize for results.
Develop Revenue- and Growth-Focused Mindset
It starts with marketing developing a revenue-and-growth-focused mindset. Changing leadership expectations is an important first step.
“Helping leaders understand how much of the team's resources are wasted when focusing on the wrong priorities is difficult, but extremely impactful work,” Kindlick said. Because, he added, while it may cause a short-term drop in leads, there will be intermediate increases in low-stage pipeline. In the long-term, you will see the impact on the cost to acquire a customer, average deal size and length of sales cycles — the B2B metrics that really matter.
Once leadership acknowledges that there is little value in the short-term, cosmetic metrics like lead volumes, organizational focus can shift to understanding customers and their needs, and all initiatives can align around better serving those needs. In this approach, demand-gen efforts lead to compounded effects over time.
Vaughan called this mindset shift from “push” (siloed phone/email/content/ad blasts) to more modern “pull” strategies such as account-based journeys, product-led growth and customer-led growth.
Pull models require companies to invest in a more data-driven, always-on and account- and buyer-driven approach versus chasing leads. An interesting trend, he pointed out, is that marketers are incorporating intent signals and data intelligence to help identify not just in-market accounts, but also out-of-market accounts that fit the ideal customer profile definition. Now, that’s real long-term thinking for you!
Related Article: Let Customers Decide in a Push Me, Pull Me World
Creating an Enabling Environment for the Transition
To enable revenue marketing, B2B CMOs should be thinking about reprioritizing investments in people, processes and technology. For Lefkowitz, the three key investment areas are:
- Intent data and the team tasked with harnessing it to fuel all campaigns.
- Content intelligence to gauge how well content is performing and get insights into what content audiences want.
- A control tower such as a CDP, which houses these signals and informs more precise touch points across the omni-channel environment.
At the technology level, Vaughan suggested a shift away from marketing automation as "the center" of the stack, and toward revenue and account-engagement platforms fueled by buyer and account intelligence.
Ultimately, B2B revenue-marketing is about creating brand preference by creating value for customers. Leveraging the advances in account intelligence and intent data seems like a no-brainer, with solid use-cases at each stage of the funnel, including elevating the quality of leads. When sales and marketing can know with better certainly who is in-market and what their needs are, they are better able to:
- Build a custom approach to connect and engage with them earlier in the cycle.
- Add or create value by addressing their specific needs and pain points.
- Deliver a consistent and seamless experience to build brand preference.
- Drive sustained revenue and stronger ROI by retaining and growing customers.
With that broad of a canvas of use-cases, the time for the "sales and marketing alignment" narrative is now past. For revenue-centric marketing built on friction-free buyer experiences, the organization needs a far broader view. “That means,” Vaughan said, “sales, marketing, customer success and product all need to have the same goals, integrated processes and common reward systems.”