B2B Marketing Changes to Consider in 2018
In 2018, marketing must take ownership of digital transformation, accountability and customer intimacy.
Management guru Peter Drucker said, “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”
In the engagement economy, marketing is a critical cog in the machine for creating customers, growth and shareholder value. The CEO who recognizes and harnesses the shift marketing is responsible for will win in the engagement economy. This CEO understands marketing is a growth driver and this transformation in the role of marketing represents true innovation—something new and different that makes a financial impact. The CEO who still views marketing as the pens and mugs department and does not innovate around the role of marketing will ultimately lose to the competition.
Drucker’s quote, from 1954, captures the essence of B-to-B companies in 2018 and beyond. There was a subtle, yet seismic shift for B-to-B marketers in 2017 that will characterize 2018.
This shift has occurred around three major themes: digital transformation, accountability (aka the rise of the marketing operations function) and the pivot to customer intimacy.
B-to-B customers now require a B-to-C experience. As consumers, we have incredible control over how, when and from whom we buy. Amazon has spoiled us all with its fanatical customer focus expressed in a groundbreaking business model. We all use Amazon because it makes our lives easy. The selection is huge, prices are great and comparison shopping is easy.
Our B-to-C experiences shape all of our digital interactions, and this includes how we transact business and build relationships in the B-to-B world. This tsunami of expectations has moved digital transformation from a marketing initiative to a company-wide initiative. This distinction is important. Think back to the early days of marketing automation. Marketing began to use technology to provide better-qualified leads to sales. This involved understanding the buyer journey and conversing or engaging with the customer with the right message as they progressed on this journey. This was very much a marketing-focused initiative.
In 2018 every firm is reviewing how digital transformation can affect its business. CEOs view technology as a key element in their company toolkit to engage, woo, win and keep customers and in that process, drive growth and margins. The CMO in this type of company is fundamental to this transformation and provides value across the organization, not just to marketing. This broader business-based perspective gives the CMO the sought-after seat at the table.
In parallel to digital transformation morphing from a marketing-driven initiative to a company-wide essential strategy, CMOs are investing in marketing operations as a core capability. A capability encompasses a specific combination of people, process and technology that drives a business result. As customers take total control of their buying processes, CMOs have introduced technology as a way to engage with digital customers. This required the development of a strong, left-brained capability to optimize the use, spend and results of the technology. As this capability is typically not native to traditional marketers, marketing operations began to emerge.
The essence of a marketing operations group is to improve the efficiency (doing things right) and effectiveness (doing the right things) of marketing to meet financial goals such as ROI and contribution to pipeline and revenue. In 2017, we saw rapid growth in the number of companies instituting a dedicated marketing operations function. The function that began with appointing a marketer who understands technology has fully morphed into a dedicated team structure. This team is responsible for enabling credible marketing contribution to revenue, growth and margins through the selection and optimization of systems, re-engineering core processes and the continuous data analysis and recommendations for improvement. Anecdotally, we see that when marketing has a strong operations capability, marketing is more likely to produce credible business results.
The customer is now in control, and companies are now being forced to pay attention to them before their product. Second, this placed marketing in a position of power and influence. The B-to-B world seems to be rabidly focused on the product. In the tech world, this makes sense as product innovation is key to growth. I’ve worked with many marketing departments that had to message based on product because that is what the company expected and mandated.
Times are changing. Today the customer is clearly in control, so talking about product benefits and features is no longer good enough. Customers and prospects want you to understand them and their specific business pains. If you don’t, they are one click away from your competition. So, who is in the best position to engage and interact with prospects and customers as they navigate their buyer journey? Marketing is sitting on top of reams of digital data about customer/prospects wants, pains, issues and desires. Thanks to technology like marketing automation, marketing is perfectly positioned to establish intimate and relevant relationships with prospects and customers. Through campaigns, content, messaging, channels and offers marketing—not sales—is perfectly positioned to create value-based customer relationships.
The Impact of the Subtle Shift
Drucker spoke often about how marketing was one of the two core functions of a business. Yet, until we entered the engagement economy characterized by technology and customer control, it was often hard to see how marketing was a core function. In 2018, we will see this shift expressed in several ways:
- The CMO will become something of a CCO or chief customer officer.
- Marketing will mine customer/prospect data, create insights and share across the organization for better decision-making.
- Marketing will be recognized as an essential cog in the machine for growth
- Old paradigms will die.
- The CMO will extend tenure as long as she drives credible revenue growth.