In the week before the second meetup of the London FlipMyFunnel circle, Sheryl Sandberg (Facebook’s COO) took the stage at the DMEXCO conference in Cologne, to tell the gathered AdTech industry audience:
“The marketing funnel itself is collapsing. It used to take time to go from research to discovery to awareness all the way to a purchase. But now you have digital and mobile that is happening faster than ever, and that is for the largest brands to the small corner shop to non-profits… The way you work on your brand and the way you communicate who you are has never been more important.”
This comment (which, unsurprisingly, suggests Facebook to be the answer to the problem) was very timely for September’s meetup. The theme for September was around reach and personal brand, so this news story – and the excellent article Mark Ritson contributed to Marketing Week (Spreadsheet Jockeys are misunderstanding the marketing funnel) – were perfectly timed to spark an interesting discussion.
Our group expressed surprise that sales cycles were shortening (while acknowledging that this was more of a B2C observation than B2B). But there was consensus that building brand equity remains a crucial part of a modern-day B2B marketer’s job. Creating the relationship prior to the sales calls is still seen as hugely valuable. Especially in a world where as few as 3% of your target addressable market is ever in a buying window at any given point in time. What investment do we put in to building the relationship with the other 97%?
Think of it like a home or motor insurance marketing task. As a customer, I don’t think about my motor insurance for about 360 days of the year. The moment my renewal reminder hits my inbox, I’m suddenly interested… probably because the quote looks so much higher than the previous year’s premium. So for a few days I’m suddenly in the buying window, and researching to find what will be the best deal. Suddenly those meerkat, red phone and opera singer ads seem deeply relevant to me.
Five days later they’re dead to me. But in 360 days’ time I’ll remember them all over again.
Their advertising strategy is built to survive the 3% challenge.
Relating that back to the B2B world, we thought a lot about the 3% challenge as it applies to a subscription sales model. I recall joining a SaaS company where the contact cycle looked, based on a 12-month initial term contract, a bit like this:
The business made little if any attempt at managing what we now call Customer Success, let alone any kind of ‘Land and Expand’ approach. We were failing magnificently to build any kind of ongoing relationship with the customer. And when, at month 11, we picked up to phone to talk to them again, we did so via a group of people with no previous exposure with the customer, no meaningful value added to date, no investment in our relationship with the customer.
Guess what? Churn rates were hefty (double digit percentages)… which was hugely damaging, as any student of the SaaS business model would have predicted.
Our conclusion, whether targeting new account acquisition or expansion of existing accounts, was that relationships matter above all.
Indeed, the sales perspective offered by John Bedwany, CEO of The Database Dept., is very much on-point with this theme:
“Invest in relationships, not pipeline… Pipeline comes from relationships being built as a result of the education they get from your organisation.”
You can see a 4-minute video interview with John on the subject here – which is well worth your time. John explains how the relationship must be owned by the organisation, not the sales person, and that it is built on trust and emotion and supported by logic. His clear message is that we should invest in relationships first – which feels a lot like sales-speak for brand equity.
You can attend a future FlipMyFunnel London meetup here.