John Parker, Clinical Assistant Professor, Kellogg School of Management, with Bob Domenz, CEO, Avenue
Big Data is held up as the new Holy Grail, with marketers rushing to worship at the altar of the latest data-gathering techniques. But for many B2B marketers, the glare of all those shiny new objects may be preventing them from seeing their best opportunity for insight: digging deep into the data already at hand.
Our Executive Director, Bob Domenz, CEO of Avenue, had the chance to explore this recently with John Parker, Clinical Assistant Professor of Executive Education at the Kellogg School of Management, and formerly the Chief Marketing Officer at Zurich Financial in the US. It all started with a discussion of the differences in B2B and B2C marketing, and ended up in a real-life example from John’s own experience.
Bob Domenz: In B2C, brands have fairly direct contact with customers–but in B2B you’re often working through intermediaries. In your experience, how can B2B brands close that gap and really get close enough to customers to spot real needs and opportunities?
John Parker: At Zurich we worked through an independent distribution channel, the large commercial brokerages. And having an intermediary means you have a harder time actively testing and getting directly to your end customer.
In B2C, you can look closely at the customers who are about to buy. For instance, in a recent conference at Kellogg there was an interesting session on the relationship between neuroscience and marketing, and how you can measure individual customer reaction to specific stimulus–it’s all there for you to see, how they’re about to make a decision.
“There’s a need to measure the result, as opposed to the intermediate metrics.”
In B2B, of course, it’s not an individual’s decision in such a clear way. It’s often a longer process, and there are often many people involved in decision-making. It’s a lot more complex to understand who and how you need to influence, in order to reap the benefit of the brand that you’ve created. It’s much less clear exactly how well what you’re doing is working—which speaks to the need to measure the result, as opposed to the intermediate metrics. But your set of activities is so much more complex, that it’s very hard to understand exactly what’s working.
This challenge presents itself in three ways. One is the number of people involved in a purchase decision–for instance, you may have buying committees, making it much harder to understand specifically who you need to influence.
The second level of B2B complexity is when you’ve got an intermediate distribution channel that’s independent from your direct control. For instance, in commercial insurance you’ve got brokers like AON, Marsh, and Willis. Then you’ve got the carriers like AIG, Zurich, Travelers and ACE/Chubb. The brokers are talking to the customers, and the carriers are talking to the brokers, but with much less direct contact with customers–and that can be a confounding intermediate step.
Then the third way B2B marketers often face an extra hurdle is when they are really an ingredient brand. When in an ingredient context, you’re providing some elements of a final product that someone else is selling to the consumer under their brand, leaving you to try to create brand value as an ingredient. The classic examples are Intel Inside or Gore-Tex or NutraSweet. In that scenario, your brand can ultimately impact the purchase of an end-product that contains your product, but it’s only one of many ingredients, so it’s a greater challenge to understand the effect or the value of your brand on the final purchase.
BD: But you found a way.
JP: Yes. One of the fortunate things about the insurance business is that there’s lots and lots of data already there. It’s just a matter of understanding how to analyze it. Working with some very good agencies we were ultimately able to understand the effect and the value of the various activities we pursued on a whole range of sales opportunities.
“There’s lots of data already there. It’s just a matter of understanding how to analyze it.”
For instance, we could see the rate at which we closed and sold in specific situations. We were even able to see the ways our branding activity affected total volume of sales. And the more we saw, the more we won. But frankly, no one really expected us to be able to do that because, as you doubtless know, marketing in many B2B companies is viewed as either a necessary evil or an afterthought. But as soon as we got to the point where we had enough data to show how marketing activity actually correlates to results, it went from being an afterthought to a way to drive growth in B2B.
The real beauty of it was that we did not create a lot of new measurement activity. We had these enormous streams of data that were already there, and we found ways to analyze the effect of what we were doing from the information that already existed.
And that made a huge difference. In fact, the way we thought we were going to create value going in was different from the way we ultimately did manage to spur real growth. So even if we’d invested in a big new measurement system, we couldn’t have spent money wisely because we would have measured the wrong thing. It just wouldn’t have worked.
But we had these enormous flows of data, and with the help of an agency partner in one instance, and the help of a really smart internal team in another, we were able to prove with hard facts the value and the return we were getting from marketing spend, in terms of sales. That was really the eureka moment.
BD: Can you give us some more specifics?
JP: Sure. This way we understood all of our media spent. We understood by channel and by market, right down to the point of individual campaigns and executions–and this was in the face of a more complex, two-stage process.
Number one, the broker brings you an opportunity, which is called a submission. They’ll bring it to three or four different carriers and then the carriers (the insurance companies) compete. We understood when we got a submission from a broker, and we understood when we got a submission just how often we won. All that data was there. We had all the facts around the execution, where money was spent and how it was spent. We had all the information on the submissions and the wins. But the two data sets had never before been connected.
So all of our effort went into connecting the data sets and then finding the relationships between our activities, customer behaviors and, ultimately, sales. When we found the relationships, we said, “Holy cow, this makes sense!” We found that when we spent money on X, we got a response in the market 60 days later, in terms of an opportunity to bid. Then, another 60 days later in terms of whether or not we won.
We got to the point we could say “OK, if we spend money on print versus outdoor, or invest in a digital campaign versus spending money on TV, here’s what we’ll end up getting.”
BD: And all of this came out of using existing data.
BD: Thanks for sharing that–I’m sure it’ll be good news to many B2B marketers.
But what if you’re not sitting on a trove of data?
Of course, not every category naturally demands the information-gathering that, say, financial services does, and not every organization will be a repository of unused data. However, if you feel that’s the case in your company, first double check your instincts. Is it that you don’t have the data, or that it’s not accessible? Probe IT and the leaders of other functions to be certain valuable information isn’t simply trapped, say, between poorly communicating legacy systems (especially important when one or more mergers has shaped your corporate life) or Excel spreadsheets. This exploration will also help determine if money should first be invested in internal systems upgrades, before spending on new data acquisition.
But even if you are confident that nothing crucial remains uncovered or unanalyzed in digital storage, there is still one invaluable resource that too often goes untapped: your people, and the institutional memory they represent. From your sales force to customer service, the people who’ve been in the trenches understand not simply the facts of your marketplace matters, but the true heart of the customer relationship, too. Through surveys and in-house interviewing, you may just reveal the “Aha!” that makes all the difference in your marketing.
There are valuable insights inside every organization–you just need to dig a little deeper.