Thoughts and recommendations on how many organisations to include in B2B marketing programmes
This article covers two areas:
Consideration #1: How regularly do organisations buy your product or service
Rule of thumb: the harder it is to make the change associated with buying your product or service, the less regularly organisations will be in the market for it.
Change is hard when there is a high level of associated risk and effort. The hardest changes associated with buying will have some or all of the following characteristics:
If the above boxes are ticked when organisations buy your product or service, you can assume that it’s hard to make the change, and therefore the change will not be undertaken regularly.
The less regularly that organisations buy a product or service, the lower the overall percentage of them that will be in market at any given time. You could compare this to how frequently we might buy milk for the office fridge vs how often the office fridge is replaced.?
Usually, when a product or service isn’t bought often, it adds weight to the case for including a larger number of organisations in your marketing programmes. For example, if for every 100 organisations, 3% are looking to buy at any given time, and your approach is to try to identify and engage those 3 in order that they enter your sales process and buy from your company, your chance of getting a return on your investment is very low.
In the same situation, if you were to include 1,000 organisations in your initiative, the odds of one of the 30 in market ultimately ending up buying from you is significantly higher.
Consideration #2: The amount of buyers and buying groups within an organisation
Some B2B products and services will be bought by a small number of people in an organisation and some can be bought by many people.
Generally, the kinds of purchases that will be made by a small number of people within an organisation will have the same characteristics as those that have much risk and effort associated with the change.
If an organisation is going to change its cybersecurity service provider, there’s likely only going to be a few people involved in the purchasing decision, and there’s a chance that even in a large, global organisation, there’s only going to be one buying group because organisations will often only have one such service provider due to the critical nature of cybersecurity.
Contrasting cybersecurity services with marketing services, the latter – particularly in a large, global business – is likely to be bought and influenced by a wide range of people and buying groups. While marketing can vary dramatically in quality it’s less likely to lead to catastrophic consequences in the way that a cybersecurity breach might. Marketing services are also much more likely to be fragmented because a certain degree of overlapping responsibilities and complexity isn’t likely to have the kind of serious consequences it might in the realm of accounting, for example.
Some companies provide products and services that can be bought by multiple job functions. For example, monday.com lists Marketing, Sales, IT and HR among several job functions that might buy its software. Companies in this position have many more buyers and buying groups they can engage per organisation than companies that sell to one job function.
The lower the financial commitment required, the more likely it is that a larger number of people within an organisation will be able to buy your product or service. If we take monday.com again, their project management software can be bought for ￡33 (i.e. for their cheapest paid option with 3 seats and a one month commitment), which means it’s feasible for a team lead to buy for their small team, and they wouldn’t necessarily even need to use company budget.
It’s worthwhile to consider to what extent your market is one in which buyers and buying groups will be concentrated or distributed within organisations. If buying decisions are highly concentrated, it will usually add weight to the argument for including a larger number of organisations in your marketing initiative.?
This being said, if your product or service has many buyers within an organisation because it’s a very small financial commitment, that may also mean that you’ll need a lot of companies to buy in order to make a significant commercial impact.?
Consideration #3: Market saturation
If virtually all of the organisations that you would like to buy your product or service have already bought something similar elsewhere, you are operating in a highly saturated market. Usually, in this scenario buyers are more likely to see your product or service as a commodity and be less interested in it.
Between 2019 and 2022 I noticed that account-based marketing was consistently interesting to B2B marketers. That audience wanted to learn, talk about, experiment with and implement it. In the past 12 - 24 months, I’ve noticed that the concept isn’t resonating in the same way as it used to because many more companies have already implemented ABM and it’s lost some of its novelty factor. It’s not to say that ABM isn’t a good service to provide (or to buy) in 2024, but my sense is that it’s been superseded as “the hot new thing” in B2B marketers’ minds by other concepts and approaches (even if they’re fundamentally the same thing with a new label).
The rule of thumb here is: the more highly saturated the market, the fewer organisations will be looking to buy your product or service, therefore the more organisations you’ll want to include in your marketing initiative.?
Consideration #4: Economic backdrop
Most organisations have tighter purse strings in 2024 than they did in 2021. Higher interest rates have led to a greater focus on efficiency.
In our work with clients in the past 18 months, I’ve generally seen better results where the number of organisations included in marketing initiatives has been relatively higher vs lower.?
Basically, if a lower proportion of organisations are buying in 2024 vs 2021 and you want to sell the same or a larger amount of stuff, one obvious lever you can pull is to engage more organisations. If you don’t pull that lever, either your targets have got to come down, or you’ve got to find another way to engage organisations that accounts for the fact that a significantly smaller proportion will be buying.?
From my experience, increasing the number of organisations you engage is generally a more straightforward and realistic route to success in the current economic conditions compared with other ways to change your go-to-market.
Consideration #5: The variety of ways you can engage organisations
Generally speaking, the more tactics, channels and “offers” involved, the higher the proportion of organisations included in your marketing programme that will enter your sales process.
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For example, if you include 100 organisations in a marketing programme and the only “offer” is an introductory meeting, fewer organisations are going to engage than if you’re able to offer an introductory meeting, an in-person roundtable discussion with peers and a guest appearance on your company’s podcast.
If you only engage organisations with digital advertising, a lower proportion will convert compared with if you were to also phone them up.
It’s not to say that all marketing programmes should include a wide range of tactics, channels and offers, but it’s important to bear in mind that if you’re only going to use one approach, you’re going to need to engage more orgs than if you have a greater variety of approaches.
Recently, I’ve seen the most significant underperformance from initiatives that have a combination of very limited tactical variety and very tight organisation inclusion criteria.
The simple rule of thumb is that the less tactical variety at your disposal, the more organisations you need to include in your marketing efforts. If you’re not in a position to increase the number of organisations you include in your initiative (which for some businesses with a very specific use case and market will be the case), it’s crucial to explore ways to add variety to your tactics.?
Among all the factors listed in this article, this is the one that is most commonly overlooked when deciding how many organisations to include in a marketing programme - which I imagine may be because it’s not related to the organisations and markets themselves but rather the nuances of a company’s marketing set-up.
Consideration #6: The newness of your go-to-market initiative
“It is better to be vaguely right than exactly wrong”.
If you’re doing something new – for example, you’re looking to engage a new type of organisation, you’re looking to sell a new product or service, or you’re looking to try out a new approach – any choice of what to do will be made using logic, instinct, other people’s experiences, previous data, industry benchmarks and so on.?
When people are preparing to do something new, there’s often a tendency to spend a lot of time researching, thinking about and discussing an initiative, which often leads to a very plausible and precise output in terms of what should be done. This precision often includes a focus on a small number of organisations sharing a particular specific characteristic.
With variety and broadness you bake in a degree of suboptimality, but you also drastically decrease the likelihood of total failure. If you leave things reasonably broad when you start a new initiative you’re far more likely to get some kind of valuable commercial outcome, even if it’s not the best.
You’ll also get a lot more helpful insights because you’ll be able to see how different types of organisations and personas have responded, and how different marketing approaches have fared relative to one another.
Even if something appears to work, if it’s the only thing that’s been done you won’t see the result within a broader spectrum and therefore won’t know if it’s the best place to focus your efforts. If you engage 5 industries, you’ll perhaps see poor results from 2, ok results from 1 and great results from 2. If you chose only one, you might have seen good, bad or great results from it, but you wouldn’t have anything to compare it to. Meaning you might have thought that the great result was bad, or the bad result was great, or that the great result was the only industry where such great results were possible.
It’s worth caveating that this point isn’t relevant to companies that do clearly only serve one very specific type of organisation. There are rare cases of companies where there may literally be 5 or 10 organisations that they can serve, full stop, globally, and they may all be very large companies that share one niche characteristic.
The point here applies to companies that could or do serve a range of different types of organisation and industry, and are considering a very tight focus without being able to base that decision on first-party empirical data.
Consideration #7: Existing relationship with / knowledge of organisations
Suppose an organisation is already a customer, or you already have some kind of relationship with people there – or perhaps you have substantive information that suggests a high propensity to buy from your company, or a lot of people from an organisation have already engaged with your company and provided their contact details. In this case, you have solid grounds for including a small number of such organisations in a highly focused marketing initiative.
On the contrary, if you are engaging companies that haven’t already bought from you, you have no significant relationship with or knowledge of, you’ve had very little marketing engagement from people there before – these are all signs that you should probably ensure there are quite a few such organisations in your marketing programme to allow for the fact you’re starting from scratch.
Observations and recommendations
Recently, more problems have been caused by the inclusion of too few, rather than too many, organisations in marketing programmes
I’m not sure if this is because I’ve been involved in getting a number of new initiatives off the ground recently, or whether it’s a result of the tough economic backdrop, but I’m tending to see initiatives focusing on a smaller number of organisations fare worse than those with broader inclusion criteria.
In the current climate, I would suggest that unless you’re certain that a narrow focus is the right thing to do, allowing for some serendipity and margin for error by “opening the gates” a little wider is going to be helpful.
The lower the number and variety of ways you have to engage organisations, the more organisations you should be including in your initiatives
With fewer organisations buying things at the moment, every marketing channel and tactic has become less effective.
Where previously we might have been able to rely on one channel or tactic and a focus on a relatively small number of organisations, due to an overall decrease in effectiveness, we either need to increase the number of channels or the number of organisations.
Pulling both levers is sensible in the current climate (i.e. diversify channels and tactics and include more organisations in your focus).
When deciding how many organisations to include in your initiative, start from first principles
Due to the proliferation of ABM as a concept and the entrenchment of its associated methodologies (e.g. 1:1, 1:few & 1:many ABM), people often talk about following basically arbitrary rules of thumb in terms of how many accounts to include in each type of ABM programme.?
When we decide how many organisations to include in a marketing initiative, we should start from first principles rather than rely upon general “best practice”. This would lead to a greater degree of variation in the narrowness or broadness of focus based on company-specific context than we see currently, and I think this would lead to better effectiveness.
Arguably marketing’s most important characteristic is its dependence on context. Leaning into the wide range of different scenarios that we find ourselves in, and trusting the outputs from analysing our own situations, is much more conducive to success than doing what we see other people doing most commonly.
Think in detailed, practical terms
Along with reflexively following “industry best practice”, another concerning trend I notice is the absence of consideration for the detail and practicality when deciding how many organisations to focus marketing efforts upon.?
It’s important to think of the channels, offers, tactics and the likely conversion rates, including from the sales process itself.?
BA Hons International Business With Management Graduate
2 个月The mix and execution of existing relationships and knowledge with the market players and new go-to approach, in reaching out to businesses in the B2B model, indeed gets the results to optimise while marketing and end result sales.