Looking Outside the (Data) Box
B2B marketing and sales professionals across diverse industries are struggling to find the information they need to identify which prospects to target and which customers represent the greatest revenue opportunities. The right targets are typically the ones with a high propensity to buy products like yours, while high-value customers are the ones that are spending more with your competitors than they are with you—or where your "share of wallet" is lower than you would like it to be. Knowing which prospects and customers represent the most value to your company will enable you to target your marketing efforts and dramatically improve your marketing conversion rates.
Now for the tough part: It's nearly impossible to find relevant data using search engines and conventional business data sources—especially on private companies. Conventional sources either provide too much—or irrelevant—information. As a result, organizations using these sources typically have underperforming marketing conversion rates.
As customers and prospects grow and change, it is essential for marketers to truly understand how these organizations are evolving and approach them with methods and messages relevant to the target buyer. This is impossible using conventional marketing data.
When an organization looks at its customers and prospects through a conventional data lens, it finds generic results. As convenient as Web-based research has become, it simply does not deliver the B2B information needed to find and pursue high-value revenue opportunities. This is why looking at organizations on a deeper level, such as through their purchase behavior—what they spend and how their purchase behavior changes over time—is so important. Using purchase behavior to understand customers and prospects enables companies to gain deep, actionable insights into what they are buying, which enables sales and marketing professionals to better target the right organizations with the right offers to improve marketing conversion and sales closure rates.
The lack of easy access to relevant insights into businesses has resulted in a high degree of inefficiency in the sales and marketing process. According to a recent Aberdeen report, the average amount of "nonproductive time spent in search of customer data" was equivalent to more than 200 hours per sales representative per year. That is more than 200 hours per year wasted on searches that do not even yield insights that are relevant or lead to plausible business deals. The data overload we see only adds to the existing inefficiencies in B2B sales and marketing.
A new breed of B2B purchase insight solutions looks at a company's past and present purchasing behavior to determine where customers and prospects are headed, what they're buying, and what they are likely to buy in the future. This enables marketers to target only those that are most likely to buy particular products or services. The same Aberdeen report also notes that users who look at sales intelligence have a sales forecast accuracy of 77 percent, while all others only have 18 percent accuracy. This stresses the importance of marketers mining for focused, relevant data in order to gain more effective leads by focusing resources only on the high-value opportunities that matter.
In the past, many companies used their customers' and prospects' payment behavior to determine whether they were growing or shrinking, but this information was less effective because by the time payment patterns were gleaned, it was usually too late. Organizations can pay their bills on time and still be struggling, or they can pay slowly for strategic cash management purposes while growing. Neither option provides an accurate view of the health of the business. Payment behavior does not provide a 360-degree view of the customer or prospect, which leaves marketing and sales professionals still needing and searching for more.
By studying purchasing behavior to gain sales and marketing intelligence, a company can both gather a greater number of opportunities and also understand the details of each business to establish which are more relevant and profitable opportunities. A business's purchase behavior provides the level of insight needed and is a better indicator of its size, growth, and overall financial health. It has been an even bigger challenge for companies to gain accurate insight on private businesses. B2B purchase behavior now provides evidence of what is really happening inside a company and can be predictive of whether that company is a potential customer and how much it is able to spend. This intelligence encompasses a far more accurate and comprehensive picture of the business.
In addition to improving marketing conversion rates and maximizing revenue, purchase data also helps sales and marketing professionals minimize risk by indicating unlikely or unreliable leads. Following the spend behavior of a business by closely monitoring its key purchases, such as shipping or materials spend, will raise any potential red flags. Once a behavior is tracked over time, companies begin to pick up on clues that show growth or struggle, alleviating the possibilities of focusing on prospects that are unstable.
By eliminating businesses that are not viable customers or prospects, sales and marketing teams can focus their efforts on selecting or nurturing the prospects and customers that are going to be the best candidates, in turn increasing marketing conversion rates and providing the highest revenue opportunity.
Jim Swift is CEO of Cortera, a provider of comprehensive business-to-business payment and purchase behavior insights on public and private companies.
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