What the heck do a book and movie about Major League Baseball have to do with B2B marketing? Quite a lot, actually.
When I read Michael Lewis's Moneyball and saw the movie starring Brad Pitt, I was struck by the similarities between the key challenge facing Billy Beane when he managed the Oakland A's and the one facing B2B marketers at small and mid-sized B2B companies. The challenge is this: how can you succeed when the other guy outspends you by a huge margin? Marketers whose job is to generate leads and build brand awareness on limited budgets should draw inspiration from Beane's remarkable success in overcoming the equivalent challenge—summed up by the book's subtitle: The Art of Winning an Unfair Game.
In 2002, Beane managed the Oakland A's to the American League West championship. That year, the A's won a stunning 20 games in a row—an all-time MLB record. And Beane did this with a payroll of just US$41 million. That may sound like a lot, but it was dwarfed by his competitors' budgets—such as the New York Yankees, who had a massive US$125 million to play with. Because Beane couldn't compete on dollars, he had to figure out an entirely different approach to build a winning team than just throwing around a lot of money.
That's exactly the challenge facing B2B marketers. When you compare the marketing budgets of typical B2B companies to those of business-to-consumer (B2C) companies, the numbers pale in comparison. In my experience, B2B companies typically spend 2% to 4% of their gross target revenue (i.e., the total revenue they want to achieve in the year) on marketing, although it's higher in some industries, such as software. Contrast that with B2C companies, which regularly spend 8% to 20% of their gross target revenue on marketing. This allows B2C marketers to rely on splashy and pricey ad campaigns. Marketers who come from this world sometimes struggle with the realities in B2B, because they aren't accustomed to the vastly different budget landscape.
The central lesson B2B marketers should take from Moneyball is that in order to win the game, they need to change the rules, as Beane did. His fundamental insight about how to build a winning team on limited funds was that the key to winning games is to get on base. If you can get more players on base more often than the other team does, you're likely to win the game.
From this insight, Beane then worked backwards to identify which sort of player was the most likely to get on base. He concluded that the attributes that baseball scouts traditionally looked for in a player—what he looks like, how fast he runs and how strong he is—have nothing to do with his success at getting on base. Because the conventional wisdom was to prefer players with the right look, speed and strength, teams inevitably chose players with these traits as their top draft picks.
Beane, in contrast, focused on what the statistics showed about which players had the highest on-base averages. Often these players lacked the traits valued by conventional scouts. And because Oakland's competitors didn't realize the value of uglier, slower and weaker players, Beane was able to get them for cheap.
Smart B2B marketers know they should depart from the conventional wisdom in their field just as Beane did on the baseball field. They should take the same analytical, evidence-based approach that he did. In B2B marketing, the objective is to grow your revenue. And the key to that is generating enough qualified sales leads. But what gets qualified leads at a reasonable price isn't necessarily what the traditional marketing industry thinks, or what works in B2C marketing.
Certainly, big-budget tactics like TV, radio, outdoor and print advertising generally don't deliver good ROI for B2B marketers. And some other marketing tactics look great, such as flashy websites, or run fast, such as social media. But often those don't deliver good results either.
Just like on Billy Beane's Oakland A's, sometimes the ungainly B2B marketing players have the best results. I've seen countless instances in which it's the cheap and unsexy marketing tactics that deliver the strongest results for B2B companies. For examples of such tactics, click on the link below to a previous PROFIT column of mine.
B2B marketers have to think like Billy Beane. They have to figure out what the equivalent of getting on base is for their company: the combination of tactics that will cost-effectively generate the leads that drive revenue. If they can figure out how to market in a way that departs from the conventional wisdom, they can be hugely successful.
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