CMOs are learning that potential clients want actionable insights rather than the hard sell. But these solutions-based sales tactics require longer lead times, meaning marketers will need to start now if they want to win new business in the new year
When IT firm Antavo, a provider of technology for corporate loyalty programmes, polled potential clients earlier this year and asked them if they were planning to upgrade their schemes, 90% said that they were.
That was 21 percentage points up on the equivalent figure from Antavo’s 2022 survey. Yet, despite their apparent keenness to buy new IT, they’ve generally been slow to make such purchases, reports the firm’s marketing director, Eva Bacsi.
“The decision-making process has gotten longer and customers are more cautious about investing in technology that needs planning and resources, because of the expected downturn,” she says.
Why new marketing campaigns need to start now
B2B marketing teams can’t afford to get complacent, then, especially as the economy continues to falter. The International Monetary Fund’s latest World Economic Outlook report forecasts that global GDP growth will decline from an already disappointing 3% this year to 2.9% in 2024, for instance.
“It’s never been more important for B2B marketers to be talking to customers – and as soon as possible,” stresses Richard Cook, founder and MD of Champion Communications, a B2B marketing agency. “Your buyers are in a state of ongoing chaos. They’re looking to make decisions that are potentially quite risky and they can’t afford to get them wrong, because their rivals will probably get them right.”
The consensus among marketing chiefs is that now – not two or three months hence – is the time to talk to B2B buyers, who often look to vendors to help them optimise their spending, mitigate risk and seek out a precious competitive advantage.
This isn’t just good news for marketing teams. Research evidence indicates that buyers benefit too. A study by McKinsey & Co suggests that firms seeking an edge over their competition are more likely to achieve that by continuing to invest in certain functions during a downturn.
For its part, Antavo remains committed to investing in marketing and product development despite the deceleration in sales.
“We’ve seen before that downturns happen and new business slows,” Bacsi says. “But then things recover and, if we don’t keep moving and talking to customers, we won’t be in the right place to succeed when demand returns.”
What buyers want from B2B vendors
In Q1 2024, Antavo will publish its annual Global Customer Loyalty Report, which is based on data insights derived from the 300 million transactions completed on the firm’s platform and interviews with 600 business leaders. Such research helps the company to build relationships with existing and potential clients, while also giving it useful information about the problems they’re facing.
“It’s vital for us to maintain an educational tone to the content we put out, rather than sending a hard sales message,” Bacsi says. “This work helps us to understand where the gaps are in the market and then develop messages and features that meet those needs.”
IT services firm Equal Experts is refining and targeting its marketing messages in a similar way, as its head of global marketing, Samantha Dixon, explains.
“We do see budget constraints, but we also see nervousness about not being able to keep pace with progress, especially in things such as data, sustainability and AI,” she says. “We’re looking to maximise the return on our marketing investment by focusing on channels such as digital, but also on technologies that we know address those pain points.”
Why marketing requires longer lead times than before
Early planning also helps firms to make the most of their marketing expenditure, says Dixon, who adds: “Obviously, budgets are constrained from a marketing perspective, so now we’re taking time to plan digital investment and how we shift our messaging for those platforms.”
Kunal Mehta is global head of marketing, communications and brand at dsm-firmenich, a health and nutrition firm. He explains that his company is focused on “solutions-based marketing”, which is based on understanding customers’ problems and providing bespoke solutions, rather than leading with a particular product or feature. By its nature, this sort of marketing takes longer, so the work needs to start earlier.
“This is about focusing on how we can help, leading the way and helping customers to stay ahead of the curve. Then we follow this up with messaging from the sales team,” Mehta says.
Longer sales cycles necessitate a fundamentally different kind of marketing engagement, according to Cook.
“If you put yourself into your buyer’s shoes, they’re working remotely and the person in the vendor’s business development team is also working remotely. There are fewer opportunities for face-to-face meetings,” he says. “The buyer is increasingly reliant on information from B2B vendors. But, at the same time, there’s so much more of it to sift through. Marketing leaders need to show empathy and understanding – those relationships have never been more important.”
Modern marketing is based on relationships
Not all this engagement will translate into sales, of course, but the work is still valuable, Cook stresses.
“Even if the customer isn’t ready to do business, having the conversation means that you’re able to learn and build a relationship,” he says. “That helps to refine your thinking and planning.”
At dsm firmenich, the company’s goal in engaging with customers through early marketing is to serve as a trusted guide to them in uncertain times.
“We need to stay ahead of the curve to show customers what’s coming next and how it can help to address their challenges,” Mehta says. “Whether you’re talking about sustainability or how AI might be used in our industry, customers are looking to us as a beacon to lead them – and that’s exciting.”How B2B marketers can make the most of AI
Generative artificial intelligence and other fast-developing technologies have much to offer the profession, but there are cultural hurdles to surmount in the race to find uses for these powerful tools
While leaps in generative artificial intelligence have wowed much of the business world over the past 12 months or so, specialists in B2B marketing have been profiting from the power of AI and advanced data analytics for years.
Nonetheless, GenAI represents huge potential value to a profession that’s keen to exploit this fast-moving tech. The possibilities are verging on bewildering, according to Eric Gregoire, senior vice-president and global head of digital at pharma giant Bayer’s Consumer Health division.
“There’s never been a better time to be a marketer, because there is so much you can do with this emerging technology,” he says. “But you may also get frozen by where to start.”
AI reveals customer insights
Kevin Iaquinto, CMO at etail software developer CommerceHub, believes that the use of AI and data-driven solutions have already improved B2B marketing significantly in three areas, enabling “hyper-personalisation at scale, better targeting and better creative”.
His view aligns with the conclusions of research published by McKinsey in May. This found a significant increase in the use of GenAI for lead identification, leading to better targeting and personalised outreach.
Steve Reis, a senior partner at McKinsey and co-author of the research report, says that AI is helping to answer one of marketing’s fundamental questions: who’s the customer? This is particularly hard to answer in the B2B space, because each key purchasing decision in a business is typically made by several stakeholders, few of whom will have exactly the same priorities.
The growing capacity of data-gathering and advances in real-time analysis promise B2B marketers a much better idea of who the main decision-makers are likely to be and what matters most to them. This should in turn enable them to personalise their marketing communications.
AI and data analytics can be applied at various stages of the sales funnel, the popular marketing model that charts the progress of each potential customer from awareness (learning of a product’s existence) all the way down to action (buying it). As an example of a lower funnel application – that is, the point at which someone is about to make a purchase – Bayer partnered with Google to analyse navigation data supplied by visitors to its own website. The aim was to identify high-value customers based on behavioural traits, such as the time they stayed on each page, to learn who among them were seriously considering a purchase. Such insights enabled Bayer’s marketing team to target those individuals with personalised messages, leading to a double-digit percentage growth in its sales conversion rate.
“The way we do things has changed dramatically,” says Gregoire, who notes that it wasn’t long ago that marketers would base their campaigns on intuition or “what you think is best for the customer. Now you actually know what’s happening in real time. You can make smarter decisions, test, learn and transform.”
But he warns that making the best use of advanced tech solutions is no easy undertaking.
Preparing the marketing team to adopt AI solutions
The challenge here for many marketing teams lies in moving from recognising the value of AI and data-driven solutions to implementing them, according to Gregoire. In the first two years of its AI adoption, Bayer focused on building effective partnerships with tech companies and adding new skills to the team, incorporating AI gradually into the mix.
Iaquinto believes that marketing teams must first develop the right skills to fill the growing need for “prompt engineers, data analysts and marketing automations”.
Many CMOs have found it hard to persuade every member of their marketing and sales teams of the benefits of AI – and Iaquinto reckons it’s almost impossible to realise its full potential without your department’s total support. No matter what great leads you provide, “you won’t see the growth in the pipeline if sales teams aren’t committed to using it”, he stresses.
Every step in adopting these solutions must be clearly communicated across the entire function. It’s a matter of building a common understanding and then setting clear objectives and measurable key performance indicators.
One of the main barriers to adopting AI is the underlying feeling of replacement anxiety among the sales force, according to Reis. It’s an understandable sentiment, given that 20% of sales tasks could be automated, although these are largely administrative in nature. In fact, rather than causing redundancies in sales, AI could instead help the function to become more strategic and creative.
It seems that the sensational emergence of ChatGPT over the past year has gone some way to softening such resistance. The advanced chatbot has made AI accessible to people who aren’t technologically minded and its sheer usability has been winning many sceptics over – even those in sales.
The need to smash silos and experiment without fear of failure
For the sales and marketing function to make the most of AI’s power, it must work more closely with IT and data specialists in the organisation, according to Gregoire. This should help marketing managers to adopt a “test and learn” approach when trying out new applications for the technology, he adds.
This means accepting the inevitable risk that any given experiment will fail.
“You can learn a lot from what didn’t work,” says Gregoire, who reports that unsuccessful experiments are actually celebrated at Bayer.
This is not about getting jubilant when things don’t go as expected, of course. Rather, it’s about seeking insights from failures instead of brushing them under the carpet; explicitly acknowledging that testing new tech is not without its downsides; and actively encouraging people to engage in the sort of calculated risk-taking that fuels successful innovation.
Iaquinto notes that many of the most exciting use cases for AI have yet to enter the mainstream. “We’re in the 10th minute of a 90-minute match,” he says.
Marketing chiefs who’ve been slow to grasp the benefits of AI’s recent advances therefore still have time to try to catch up with the early adopters. But, while they’re focusing on the technology and all its potential uses, they would be wise not to ignore the cultural considerations of applying it.Purchasing power: who gets to make the final decision?
The responsibility for signing off purchasing decisions typically rests with the most senior person in the department concerned, but that authority could – and should – be delegated downwards in many cases
All too often, the responsibility for approving a purchase travels upwards through an organisation and doesn’t stop until it reaches a CXO. But, if a company is to be run at optimum efficiency, not all such decisions need to go that far to get the green light.
Determining which decisions require C-suite sign-off and which can be made further down the chain of command isn’t always clear. Companies seem divided on who should be making the final call.
For instance, Raconteur’s new survey of 1,100 business leaders has found that chief information officers signed off purchasing decisions concerning enterprise resource planning systems in 40% of cases. In the remaining companies, that responsibility was evenly split between IT managers and IT directors.
Deciding who makes the final call
One of the first tasks in any decision-making process is to determine the person who will make the final call. Randall Peterson, professor of organisational behaviour at London Business School says: “You have to declare who that is. Otherwise, people don’t know who to try to influence and persuade, making the process totally inefficient.”
In many businesses, this responsibility falls to the most senior person in the room. Raconteur’s research shows that CXOs make the ultimate buying decision on eight out of the 14 products and services covered by the survey, while directors do so in six of the categories.
Although this seems a natural and logical way of determining who gets the final say, it’s not always necessary. Peterson suggests that, rather than looking at seniority alone, organisations should pick the person with the most appropriate attributes. That’s likely to be someone with the best interests of the business at heart, who’s considered fair by all involved and who’s happy to consider different ideas and listen to the arguments for and against them.
It stands to reason that any good CEO should have these qualities, but that’s not to say that others further down the hierarchy can’t also possess them.
“Someone junior can absolutely be making some very senior decisions,” says Erika Eliasson-Norris, a leadership adviser and founder-CEO of the Beyond Governance consultancy. “But it depends on the organisation and the personalities of the people involved.”
When to give more junior people responsibility
There are obvious contexts in which giving someone more junior such responsibility would be inappropriate. Take construction and pharmaceuticals, for example. These are two industries in which the ramifications of a poor decision can be particularly severe.
“Making the wrong call in areas concerning health and safety could land someone in prison, so you probably wouldn’t want to be delegating that responsibility,” Eliasson-Norris notes.
Understanding the possible consequences of making a poor choice can therefore be the easiest way of determining who should be signing off a given purchase. But, equally, expecting a senior manager to approve every such transaction is unrealistic, especially in larger organisations.
“You cannot be the sole budget-holder for procurement when you have a team of 250 and a £10m budget,” Eliasson-Norris says. “Even if you’re the founder and don’t trust other people, it would be impossible for you to sign off everything. You have to learn to delegate. Otherwise, your business will grind to a halt.”
If an organisation is incapable of effective delegation, it risks bestowing too much power to one person. Without proper governance, this can reduce accountability. Eliasson-Norris believes that there should be some form of documentation giving senior members of the organisation powers of veto over certain decisions and, in certain scenarios, the ability to dismiss the person responsible for a particularly bad decision.
This aspect of governance is “the key to ensuring that money is not misused”, she says. “We often hear from MDs who say a hiring manager has brought someone in on a six-figure salary but when they try to hold the individual accountable, there is no documentation saying they shouldn’t have done it. Without those rules in place, no one knows what they should or shouldn’t be doing and, no matter how misguided the decision might seem, they will have thought they were acting in the best interests of the business.”
Strategies to democratise decision-making
One company that has found a novel way around this challenge is office management platform Kitt. As the business grew, co-founder Steve Coulson decided to adopt a mini-CEO structure, which gave people decision-making powers further down the hierarchy.
He recalls a “painful transition moment” when the startup grew from 10 to 50 people and the old ways of working were no longer effective.
“As a co-founder, it’s possible to run your business in the early stages as a benevolent dictatorship, making decisions and executing against a single clear vision,” Coulson says. “But, once you hit a certain size, you can’t work that way because you no longer have all the answers and there will be many people in the business who are much better than you at certain tasks.”
Coulson created a system that allowed people to take ownership of their own decisions and their outcomes. Under the mini-CEO structure, high performers are given the chance to run their area of the company as if it were a separate business.
Although this shifts all decision-making powers on to the mini-CEOs, each one has to reconvene with the co-founders once a quarter to bring forward a document of all the changes they want to make in the short term. This enables Coulson to assess the impact it would have on the bottom line and the necessary budgets.
One of the difficult elements of this format is allowing people to make their own mistakes. Coulson says. “The hardest thing is standing back and watching the car crash happen. But that’s the only way a mini-CEO develops. The more bad decisions you make and learn from, the better you eventually become.”
It may be easier to look at a bad decision as a learning opportunity when the financials involved are smaller. But there is still something for leaders to learn from Coulson’s willingness to delegate. Balancing the distribution of power and accountability is the key to ensuring that decisions cross the finishing line.
This article is part of a report analysing the state of business decision-making. Based on exclusive research of more than 1,000 senior leaders by Raconteur, you can explore the full report here.