It’s a tale as old as time: marketing generates leads, leads get passed on to the sales team, and the sales team tries to do business with people who, more often than not, don’t want to buy.
So why do marketing teams insist on chasing those leads and defining a strategy — read, gated content — that optimizes for MQLs, but not much else?
Chris Walker has been saying for years that the B2B Marketing Playbook is broken. In the second episode of the Ungated Marketing Podcast, we spoke to Chris about how marketing needs to drop the old funnel for the dark funnel.
Chris is the founder and CEO of RefineLabs, a demand accelerator for B2B SaaS businesses that helps them increase marketing’s contribution to qualified pipeline and revenue. After having made a career for himself across all marketing functions at both big corporations and venture-funded companies, in 2019, he set out to build his own company to do the kind of marketing he wanted to do and wasn’t seeing anywhere else.
In conversation with our VP of Marketing, Fernando Amaral, Chris offers his thoughts on why businesses need to change their mindset so that marketing can upgrade from outdated tactics and find customers where they really are.
The B2B Playbook is Broken
First things first: when we say the B2B Marketing Playbook is broken, what exactly are we talking about?
The Obsession with MQLs
To begin with, there is gated content, which optimizes for MQLs but isn’t the most effective tactic. In fact, as Chris puts it, “if you looked at your CRM and tracked the outcomes of those conversions over the next 12 or 24 months, you’d realize that their effectiveness relative to other things is actually quite low.” However, marketing teams still put a lot of effort into gated content based on the old business mindset that they need to acquire as many leads as possible for the sales team to try to convert.
The next thing is direct response advertising, which Chris explains is driven by the way B2B companies grew up using Google—a high intent channel when used appropriately. When applied to different channels, such as Facebook or LinkedIn, where there is no intent, running direct response advertising to collect contact information costs businesses “50 to 100 times” more.
And finally, there’s an over-reliance on technology in the way companies measure marketing’s effectiveness. Businesses still set up metrics for marketing that are mostly dependent on the need for a certain amount of MQLs. This, in turn, leads to marketers not being able to explore more successful customer acquisition tactics.
Outdated Inbound and Outbound Initiatives
Diving deeper into the matter, Chris detects flaws in both outbound and inbound marketing initiatives.
He refers to Salesforce’s Predictable Revenue model as a very smart move in the early 2000s when the internet was barely at maturity. There was a lack of information available to buyers, so outbound marketing was the main way to get to customers. But the effectiveness of outbound channels has been steadily declining. “The reason is that it doesn't align with how B2B buyers buy anymore. It's been almost 20 years. And so the outbound model of like, push, try and get stuff is different than how B2B buyers buy because they have access to information, they have access to peers, and they want to execute buying processes on their own.”
These changes in B2B buyer behavior further explain why Hubspot’s inbound marketing model is also outdated. It was created in 2011 around search and email automation. Back then, customers would go to conferences for information, and if they couldn’t get it there, they would search for it. Chris admits that “it was a really good model in 2011.” However, today, customers have access to their peers through communities, social networks, word of mouth, groups, meetups, and more. Now, instead of merely typing search topics into Google and “getting ten blogs from vendors that are most likely biased,” B2B buyers can much more easily get recommendations from peers whom they trust.
“And so, how the nature of inbound revolves around search and SEO is the main issue, because the way that B2B buyers research and discover products has fundamentally changed and it's been accelerating over the past 18 months.”
The question is, why are companies struggling to react to these changes and getting stuck in models that don’t work anymore?
The Marketing vs. Sales Conundrum
Most B2B companies still view marketing as a sales facilitator, and this is where lies the root of the problem.
When that is the overlying business mindset, the marketing tactics put in place will inevitably favor those older models built around generating a high volume of leads “to basically just feed contacts to SDRs, so that SDRs can try to book meetings with people that almost never buy.”
After identifying this broken model, Chris came up with a different strategy at RefineLabs. As he puts it, “I'm in a different camp right now, which is that marketing's job is to drive buying processes at scale. So people are basically done buying when they come and talk to your sales team.”
What this means is that, as opposed to capturing contacts and cold contacting them with a message they might not be receptive to, Chris is trying to educate customers so that they don’t need a sales team to decide whether or not they want to buy. This doesn’t get done by playing by old rules but by communicating with buyers through the channels and in the places that are working for them right now.
And even though this might sound like it would hinder sales jobs and make sales reps’ lives more difficult, it is in truth a good thing. It allows them to prioritize their target accounts and keep nurturing those relationships.
Dark Social: Light at the End of the Marketing Funnel
For this kind of strategy to work, we need to answer the question: where are customers hanging out?
In the Dark Funnel or Dark Social, as Chris calls it. Social networks such as Facebook or LinkedIn, messaging groups, Slack communities, meetups, word of mouth, Zooms, third-party events — there’s no shortage of options.
Specifically, social networks and other online communities are prolific spots for product research and feedback exchange between buyers and their peers. But with new channels popping up all the time, how do businesses know the ones they should bet on?
Here’s a cautionary tale: by this time last year, Clubhouse’s brief appearance under the social media spotlight had already started to fade. What was deemed by many people as the social network we had been missing — one based on sound rather than textual or visual assets — quickly fell into social media oblivion.
Chris makes a case for pattern recognition. He never made an account on Clubhouse, because he realized early on that it was going to fail for two clear reasons: “...it didn't allow for content recording at the time that it was offered [and] it was requiring invites for people to get in which restricted the scale.” And fail it did.
Call it a skill or simply a gut feeling, but it’s proven Chris right once again when it comes to another social channel — TikTok.
At RefineLabs, there is a culture of leveraging employees’ social media profiles to sell their products, which includes “a multiple hour training on how to optimize their LinkedIn profile, how to create new connections, how to comment on people's posts, how to post their own content. And then we give them the freedom and flexibility to do whatever they want.” After successfully implementing this strategy on LinkedIn, the RefineLabs team is now transposing it to TikTok.
For Chris, investing in a TikTok strategy is a clear direction to follow, as he’s recognized in it the same pattern that made for Facebook’s or Instagram’s success back in the day.
When Instagram first started, he recalls, it was a platform for photographers to post their pictures; cue to a few years later, and it was the most dominant social platform in the world for all things, including B2B consumer information. As for TikTok, he doesn’t shy away from stating: “What people don't see is that now Instagram is Facebook and TikTok is Instagram.”
While the video-based social network might still not have taken over as the preferred B2B communication channel, there’s no denying that other dark social channels have become the predominant place for B2B buyers to get information. This behavior has brought B2B customers closer to B2C customers than ever before.
B2B Learnings from B2C
Before founding RefineLabs, Chris built several e-commerce companies. So, naturally, he brought a lot of B2C best practices into his new venture.
The main difference between how B2B and B2C buyers buy is that in B2C the step of talking to a sales team before purchasing anything disappears. That is the number one thing Chris takes away from his experience, and that marketers would get a lot of value from — having to “actually sell stuff.”
In B2C, customers add items to their cart, type in their credit card number, and check out.
It’s a very different process from a B2B customer landing on a product page, filling in their contact information in a form or signing up for a newsletter, downloading a content piece, and somewhere down the line being contacted by a salesperson.
Chris took the B2C approach into his B2B experience. He explains, “I’m going in with the mindset that there’s an ‘add to cart’ and ‘check-out’ button on our website, and that I need to market in a way that someone would check-out without ever talking to our sales team, which creates an entirely different marketing execution completely.”
As we’ve established, the difference is leveraging the channels B2B buyers are using to make decisions about buying instead of simply capturing contacts and handing them off to sales.
But a lot of the same core problems in B2B also exist in B2C, mainly the problems with attribution that impact both kinds of businesses just the same.
How to Measure Marketing
We’ve already mentioned an over-reliance on technology to measure marketing’s effectiveness as one of the reasons why the old playbooks are broken and outdated.
You might still be wondering, why doesn’t this change?
For Chris, the only obstacles that stand in the way of companies doing things differently are executive mindset and measurement. “Until companies think about a different way to measure and optimize marketing and how they think about a different way to run attribution than just using software that is incomplete and flawed, nothing will change in their business and marketing.”
Most businesses don’t change this because actually creating demand involves things that are more difficult to measure based on the software infrastructure they use. Thus, instead of shifting the mindset both in terms of what they need to measure and how best to measure it, companies stay stuck in their marketing ways that no longer work.
So, what should be getting measured in terms of marketing?
Everything that is happening in the dark funnel!
Otherwise, companies will keep missing out on how buyers are actually buying.
“As a marketing team, you need to be deeply ingrained in your customers’ world so that you don’t need them to tell you where they’re hanging, where they’re paying attention, where they’re getting information. And then what your customers do and what they tell you drives your marketing strategy.”
A way towards this could be to include a “How did you hear about us” form on your website as an alternative to software-based attribution that doesn’t offer insight into factors such as communities, word of mouth, social media, or other content platforms. None of these get credited at all in software-based attribution, Chris explains, which is why companies don’t invest in them.
One of the goals at RefineLabs is to change this and help companies change how they measure marketing so that, in the end, “they can get those qualitative insights, go out and create demand,” ultimately creating a better business and helping buyers more.
Change is inevitable, and customer behaviors are likely to keep evolving.
Marketers need to constantly pay attention and adapt their playbooks to how buyers are buying, if they want to keep up and develop strategies that are in line with the times. If customers are hanging in the dark funnel, that’s where companies need to hang out, too.
To hear more of Chris’s thoughts on shifting business mindsets for marketing to be successful in capturing demand, listen to the full episode below or tune in on Spotify, Apple Podcasts, or Google Podcasts.