Each year, business-to-business companies produce more marketing content than the year before. In survey after survey, marketers agree on the strategic importance of educational content.
Yet, research firm Forrester has found that an overwhelming 85% of marketers believe that customers ignore much of what they produce. Although companies invest more and more resources to create and distribute content, value eludes them.
Laura Ramos of Forrester of Forrester says that “marketers are really focused on creating content to fill the channels and support sales activity, so no one’s thinking about how to make it connect with customers.” Companies, she observes, devote few resources to producing content for early stages of the buying cycle.
Marketing departments could fuel the demand-generation engine with the content they produce. When they fail to meet the needs of buyers on their journey, they lose an opportunity to drive demand.
Marketing Misuses Resources
What is the consequence when a marketing team squanders its work?
To answer that question, let’s turn to a scenario that Laura Ramos presented at a recent meeting of the Business Marketing Association, which she framed this way: Imagine a $1B revenue company that spends 7% of its revenue on marketing programs, 9% of which goes to content marketing. If, as she has determined for most companies, 62% of the content it produces is useless, the company spends $4M each year on content marketing that doesn’t matter.
Ouch! When a company throws away $4M on programs that don’t work, heads should roll.
The loss not only damages the income statement. It also means that the work of perhaps 25 people contributes nothing to the company. Wasting the efforts of hard-charging professionals is a real shame.
Furthermore, the company pays an opportunity cost in ideas lost. B2B companies struggle to conceive ideas for content marketing topics, wrestling to convert their ideas into publishable content.
How awful to see nearly two-thirds of those ideas thrown onto the rubbish heap, never given an opportunity to help buyers solve problems.
The CFO may feel the pain of the $4M loss, but that pain is nothing compared to the ache that the whole company feels when it misuses those of its resources that are in shortest supply—its people and their ideas.
Marketing Factories Produce Visitors, Leads, and Opportunities
Does the story end here? Has marketing simply tolerated some inefficiency, and that’s the end of it?
To answer this question, let’s return to the dilemma of how to create content that’s dedicated to all stages of the buying cycle.
To do that, we will no longer treat content creation as an expense. Instead, we’ll frame it as an investment in assets.
From this point of view, the activities of marketing and sales are not so different from the investments made to deploy machines on a factory floor. The factory sequences different machines on the floor to accomplish different purposes. Some of the machines are used to cast new parts, others to mill parts to specified standards, and yet others to assemble the parts into a final product. Each machine performs a role, converting material and moving it forward on its journey to a final product.
When a company employs content to educate and influence buyers, it expects these marketing assets to work on the company’s behalf just like the machines on the factory floor. Each marketing asset causes buyers to move forward on their journey toward becoming customers.
Like a factory, a company sorts its content assets according to their role in the buying cycle. The purpose of content for buyers who are early in their cycle is to entertain and educate them on a variety of topics. Other content goes into more depth for buyers who are further on their journey and are ready to engage with a salesperson.
HubSpot illustrates this factory model. In articles, interviews, and public filings, HubSpot has explained how it deploys marketing content to help buyers move forward on their journey by sequencing them into four stages, measuring conversion rates at each stage.
HubSpot demonstrates how the factory of marketing and sales produces visitors, marketing leads, sales opportunities, and customers. Furthermore, the company exploits content marketing to produce the first three.
Downturn Damages Finances
What would happen if 62% of the content that HubSpot produced were suddenly useless? This inefficiency would decimate the production of visitors, marketing leads, and sales opportunities.
Let’s look at the impact on a hypothetical Company B that suddenly loses 62% of its production.
First, Company B would attract 62% fewer visitors to its website. Conversions from Visitors to Marketing Leads and from Marketing Leads to Sales Opportunities would also decline drastically.
The loss of 62% of the company’s marketing assets would exert a multiplier effect on the sequence of production—in the wrong direction.
In this scenario, marketing and sales at Company B are functioning like a factory that suddenly acquires less than half of its usual raw materials and in which most of its machines are broken.
With less than half its production assets in working order, Company B’s production falls through the floor. In fact, its salespeople receive only 6% of the number of sales opportunities received by the salespeople at Hubspot. Although Company B’s salespeople desperately search for opportunities on their own, they still fail to reach their quotas. Growth then comes to a screeching halt, damaging the company’s entire financial structure.
Failure Repels Investors
These failures would immediately repel Company B’s investors. When they see that the company will not meet its growth projections, they will immediately recalculate future cash flows and price the stock accordingly. A decline in the stock price will cause Company B to lose many financial freedoms that it had once enjoyed. Its cost of capital for other corporate projects will increase, and acquisitions paid with stock will become prohibitively expensive. Inevitably, corporate raiders will appear on the horizon.