Over the past 15 years, business-to-business marketers have focused on the pipeline—leads converting to opportunities converting to wins. The reason was simple: Pipelines are a measurable construct that brought discipline and financial credibility to what had been a "fuzzy" and much-maligned corporate function.
However, when one looks past the standard milieu of CRM system installations, pipeline dashboards, and lead-scoring models, the idea of marketing to enhance relationships among networks of decision makers, influencers, and users has remained alive and well, particularly at companies pitching complex products or solutions to large enterprises.
Relationship marketing (RM) emphasizes customer retention and satisfaction over short-term transactions, with the goal of developing and maintaining a base of committed customers that generates profit for the organization.
Unfortunately, while RM organizations are common in B2B marketing organizations, marketers have been slow to implement the same rigorous, data-driven approach to RM as they have with "pipeline marketing." Some organizations thus have trouble understanding and optimizing their ongoing interaction with customers, leading to more guesswork than understanding when it comes to building an enterprise RM strategy.
With this in mind, and based on years of working with RM organizations in many of the world's largest B2B companies, we've identified four key steps that marketers can take to improve both the analytic rigor and ultimate effectiveness of their RM efforts.
But, before we go through these steps, it's important to lay some important theoretical groundwork.
Line-of-Business Influencers Are Key
While functional managers—IT Directors, Office Managers, Controllers, and the like—often sign purchase orders, it is the line-of-business influencers who are most effective in driving demand in large accounts.
These "LOBs" are the individuals with business problems who need real solutions to their issues. In many cases, they won't show up in pipeline reports or end up as qualified leads, but they are in the lion's share of cases the ones driving the really big deals.
Furthermore, LOBs are far more likely to have many connections in the enterprise (and outside of it, for that matter). Positive attitudes or recommendations will be amplified, along with negative ones.
LOB Engagement and Advocacy: The 'Pipeline' for Relationship Marketing
In our experience, two objectives are most important when building relationship marketing strategies: (1) maximizing ongoing behavioral engagement with LOBs, and (2) driving toward advocacy for a firm and its offerings.
Engagement can be defined as a "give-and-take conversation" between a LOB and the company. Advocacy is, simply stated, the willingness to recommend or "go out on a limb" for a company, product, or idea.
Engagement and advocacy are linked: Proactive engagement of line-of-business decision makers (LOBs) at client accounts is a fundamental driver of these individuals' perceptions of your brand and their willingness to advocate continued and expanded business with your firm. Thus, one could say that the fundamental job of the relationship marketer is to encourage LOB engagement and promote LOB advocacy—ultimately generating incremental value for your business.
Engagement Drives Advocacy and Value
We have found that engagement drives advocacy over the long term and that advocacy is the most powerful attitudinal predictor of customer value.
Generally, it is not outbound marketing, but rather a discussion that takes place over months or years and covers topics relevant to Directors, VPs, and CXOs, that drives large strategic deals. This engagement ultimately drives LOBs to recommend your company and its solutions in competitive situations and to think of your company first when business problems arise.
Examples of engagement include attendance at hosted face-to-face events such as conferences, roundtables, and seminars; subscriptions to firm-published newsletters, whitepapers, and magazines; or participation in online activities such as webcasts, virtual meetings, and online communities. The possibilities are truly endless and are limited only by the relationship marketer's creativity.
With the framework in place, the following four steps form an outline for a relationship marketer developing an engagement—advocacy—value strategy.
Step 1: Develop an Engagement Mix
An engagement mix is the combination of tactics, content, and targeting to drive LOB advocacy. Not surprisingly, events designed explicitly for LOBs have a stronger impact than events designed for more technical audiences. Among LOBs, events with outside strategic content were more effective than events focused solely on a set of products or on a specific technology.
In determining the best mix of engagement vehicles, however, it is important to factor in the cost of hosting various types of activities, and to determine the ROI of the different engagement activities, seeking a balanced and cost effective mix.
Step 2: Integrate Outbound Marketing
Once an engagement mix is defined, an effective contact strategy must be developed to promote engagement. Different outbound marketing touches can be more or less effective in driving engagement depending on audience.
For example, content-rich email is a powerful method for contacting "tech" LOBs, while telephone touches can be very effective with managers. However, avoid "spamming" or "telemarketing."
Decision makers want to talk to someone who can answer their questions, and feel like their relationship is important. A focused campaign by account executives, for example, can work wonders after an initial email to drive LOBs to engage.
Step 3: Practice Continuous Contact
Determining the sequence and cadence of outbound tactics and hosted engagement activities is important to campaign success. Since an LOB engagement program can take up to 18 months or more to generate a "win," engagement continuity is imperative. We have found that lapses in active engagement greater than three months are associated with loss of advocacy and lower probability of incremental sales at the account.
In addition, the sequence of touches and engagement activities should provide content appropriate to and facilitative of a LOBs progression along the advocacy stages.
For example, at early stages, "Seeker" LOBs gain awareness and seek information regarding the company's offerings. Accordingly, "Seekers" should be provided solutions-oriented content to ensure comprehension and understanding of available products. Once LOBs are familiar with the firm's value proposition, strategy-focused interactions should feature more prominently in the mix.
Step 4: Implement Measurement, Tracking, and Analysis Tools
Accurate measurement and tracking of outbound marketing touches, engagement and advocacy, and account-level sales activity are requirements for developing a rigorous, data-driven approach to understanding and managing relationship marketing. A basic RM measurement system will include the following four data sources:
- Outbound RM touches
When the various component data sources have been linked and enough historical data has been compiled (a two-year period is usually adequate), it is possible to construct an analytic model connecting the constructs and revealing the dynamic inter-relationships among marketing stimuli, engagement, advocacy, and value.
Relationship marketing has lost its meaning in many organizations. The function, in many cases, has become dominated by a "stimulus-focused" approach that advocates increased contact, whatever the reason or content, in lieu of true engagement. This approach is deeply flawed and distorts the true objective of RM—to generate a conversation that will eventually lead to advocacy among key influencers.
This advocacy does not manifest itself in weeks or even months, but can take a year or more; and when it bears fruit, it is difficult to measure.
However, this is all the more reason to undertake true relationship marketing, because the advocates it generates are long-lasting and uniquely suited to influence large-transaction-size, strategic deals that otherwise would go to competitors.