Lead Generation and the Market Research Justification
If you sell to other businesses, government or institutions, and you're using marketing techniques that are designed to attract consumers, you're wasting your money.
Buyers in these B2B markets don't operate like consumers. So what works for a consumer products company won't work for a manufacturer, software developer, professional service or other B2B firm. Here are some data-points to help you understand why:
B2B decision makers generally don't know they need your product or service. So they don't know to search for it on Google.
B2B buyers usually make more rational (i.e. bottom line impact) decisions that require explanation, while consumers tend to make more emotional choices based on impressions.
B2B decision makers don't spend their time absorbing entertainment, but rather are simply busy doing their jobs. Consequently, advertising generally doesn't reach them.
And successful business leaders usually got to where they are by deliberately not doing what everyone else does. So ignoring social media tends to be a feature, not a bug.
The point is that, because the buying process, criteria and personalities are different in B2B, lead generation has to be different too. And so if your marketing program primarily consists of Inbound, email, Pay-Per-Click, SEO/SEM, banner advertising or content marketing, you're wasting your money. You might as well burn it.
The 2 Keys to Successful Lead Generation in B2B
There are two concepts underlying successful Lead Generation in the B2B market. And if you're like most people, you're not going to be happy about either one:
Direct Marketing - This means that you have to target each prospect individually. You can't simply advertise, and then hope that the buyer sees you. You have to reach out and touch each individual prospect. Which leads us to...
Market Research - Because promoting your product to 100,000 people in order to find the 10 who actually need it would generate a lot of waste, you should invest in market research in order to reduce to suspect pool to something more manageable.
Think of it this way. Let's say there are 10 companies out there who will buy your product. If you have to promote your product to 100,000 companies in order to reach them, then your promotion to 99,990 companies is a waste of money. On the other hand, if you could avoid promoting your product to those 99,990 extra companies, and limit your targeting to only those 10 companies who are going to buy, you could potentially save a lot of time and money, since the cost of most promotions is dependent on audience size and quality. Market research can do that.
There are actually two types of market research: Primary Market Research is like doing a survey, where you communicate with people to ask them about their needs and demographics, creating a data set in which you can identify companies who are worth pitching, before you go back to try to pitch them. In many cases Pre-Qualification of a list can be a form of primary market research. Secondary Market Research is where you use data that was created for some other purpose, like a list, blog postings or financial reports, and use it to make inferences (using specialized algorithms) about who might need your product, in order to reduce the target pool and waste.
Both can significantly reduce your cost-of-marketing and cost-of-sales. And one might be better than the other in any given circumstance. But let's start with the easy one.
A Model to Justify Primary Market Research
We justify Direct Marketing here. And we address the Price Elasticity of Demand issue here. So let's look at a model that you can use to prove that primary market research can pay for itself in the context of a Telemarketing program (as an example).