B2B revenue marketing — the pressure is on

The pressure to deliver revenue.jpg

The direction of travel in marketing over the last decade is unmistakable. Today’s B2B marketers are now under more pressure than ever before. No surprise there.

However, when commentators talk about this, the focus tends to be on the tactical. It’s all the choices and options that cause the stress. It’s navigating an ever-changing marketing landscape that’s the main problem.

So we hear about the explosion in media channels, or conversely the threat of the Googlebook duopoly, or social in all its forms, or the bright shiny new world of AI and AR/VR. We hear how you must be all in on ABM or inbound or content marketing or, or, or...

In reality, the real issue is more fundamental than this. Put in its most brutal terms: B2B marketers are under more pressure than ever before to deliver bottom-line revenue.

Sometimes this is couched in terms of pipeline. Sometimes it is about closed:won rates. Sometimes it’s about speed of sales cycle. But the end result is that the C-suite is increasingly looking to marketing to hit numbers that have hard currency attached to them.

B2B marketers: under pressure to perform

Of course, we’re all under pressure to deliver, nothing new there. If you want a stress-free life, B2B marketing probably isn’t for you. But, to be clear, for many, the levels of pressure we’re seeing today are intense.

In our study, 52% of mid-market and enterprise marketers said they are under a lot of pressure to deliver pipeline and revenue. This increases to 56% when we look just at enterprise marketers.

What’s more, it’s increasing.

A massive 86% of respondents say the pressure has become worse in the last 12 to 18 months. Just under half (49%) say it’s increased a lot. In fact, split out the responses by sector and the picture is even more stark.

Professional services has seen the biggest change followed by technology and B2B financial services businesses. This results in 70% of professional services marketers feeling under a lot of pressure with their tech brothers and sisters not far behind on 60%. (The makers of Valium must be laughing.)

Intense is the new normal in B2B marketing

Ok, but maybe this is just the new normal. Maybe we’ve hit a steady state and just need to adapt. Maybe, like new tech on the Gartner Hype Cycle, this will all begin to plateau soon.

We admire your optimism. Sadly, it’s not shared by those we interviewed.

Some 59% of respondents expect the pressure to continue to intensify in the coming year. And you know those professional services and tech marketers we mentioned above? They expect it to intensify the most (70% and 63% respectively).

Seriously, if you know a marketer in either of these sectors, stop reading this and go give them a hug. They need it.

Pipeline and revenue: important and urgent

Given the pressure, it’s no wonder that pipeline and revenue are becoming key objectives for the year ahead. Across our respondents, 31% say increasing marketing-driven revenue is a key marketing priority. Again, the bigger you are, the more you’re feeling the pinch. Among enterprise marketers, we see this number increase to 34%.

And it’s not just about professional services and tech marketers. Over half of those in manufacturing businesses are placing revenue in the key priority bucket for the next 12 months too.

There is a truism in business that what matters gets measured. Today, with all the talk about data-driven marketing, B2B marketers are measuring more factors than ever before. The survey’s respondents are no different, tracking a wide range of metrics.

But when we asked them about the number one metric they are using to measure performance, increasing pipeline/revenue came top (just ahead of closed:won rates).


3 things to do right now

  1. Get on the same page as the C-suite. Understand how marketing fits into the wider strategy of the business. Dig deep to make sure you’re speaking the same language.
  2. Even if you’re not feeling the pressure on revenue yet, it’s coming. Start to look at what you’ll need to change if senior management hits you with a significant revenue target.
  3. Get ahead of the problem – set your own revenue targets for the year ahead now (even if these stay within the marketing department).

Want to get the full report?

This is an excerpt from our recent Revenue Rift Report. Download your copy »


Unmet revenue expectations — the silent killer of B2B marketing careers

Are you meeting your B2B revenue expectations?

More than ever it seems, the CEO/CFO and CMO are fundamentally at odds when it comes to the purpose of marketing. Perhaps this has always been so. However, we now appear to be hitting a new peak. And it could cost marketing leaders their jobs.

Of course this isn’t entirely surprising, considering the viewpoints classically held by both offices. 

The CEO/CFO leadership is focused primarily on hard-nosed business performance: cash flow, cost reduction, quarterly results – and the bottom line. 

At the other end of the executive inner sanctum, the focus of a CMO is often on ‘softer’ metrics – MQLs, awareness, shares, time on site, sign-ups etc. In other words, more up-stream measures of success.

Of course, more recently, many marketing leaders have been busy implementing the latest marketing technology. With the latest of Scott Brinker’s martech landscape infographics now showing 6,829 marketing solutions spanning 6,242 vendors and 48 categories, the worry is that marketers are spending more time on -tech than on mar-.

Thing is, when marketers are too disconnected from the financial measures of their work, this leads to distrust from CFOs and CEOs. 

According to research from The Fournaise Group

‘80% of CEOs believe Marketers are too disconnected from the short-, medium- and long-term financial realities of companies.’ 

They go on to explain the reason: 

‘78% of these CEOs think Marketers too often lose sight of what their real job is: to generate more demand for their products/services in a business-quantifiable and business-measurable way.’

Ultimately, this leads to an average CMO lifespan of just three years (compared to eight years for CEOs and five years for CFOs). 

If you consider that many marketing leaders spend the first six months sorting out the problems they inherit and the last six months planning their exit, that leaves just 24 months to make any kind of significant impact on the business. And, in B2B, where sales cycles are often nine months to a year, it’s easy to see that the pressure is on.

Measuring what really matters

Even if CMOs are able to show positive results for marketing against the department’s own measures, these are not the ones that ultimately matter to their boss.

At worst, according to 68% of respondents to a study published by The Economist and Marketo – discussing ‘marketing stats’ such as lead quality and site traffic gives marketing the appearance of running a (very expensive) cost centre. At best, it’s seen as an unavoidable investment.

It would be convenient to dismiss this as a philosophical disagreement or a turf war. But according to an Active International report, 45% of both CMOs and CFOs report that this misalignment has a negative impact on the company’s success and growth.

And that’s not good news for anyone inside or outside the boardroom.

You say tomato, I say bounce rate

Of course, it’s not all marketing’s fault. A big part of the problem is that, all too often, company management fail to clearly communicate the overarching business objectives and corporate strategy. 

In fact, in our recent Revenue Rift research, this was the #1 barrier to success reported by B2B marketers when it came to hitting revenue and pipeline targets. After all, it’s difficult to hit targets that are either unclear or in constant motion.

What’s surprising is that this is viewed as a more difficult obstacle than lack of budget, time or staff – the usual suspects when it comes to explaining shortfalls (and also the easiest ones to point to on the CFO’s balance sheet).

So what does that mean? 

Some say that marketing simply has a problem marketing marketing – that if only they could make CEOs ‘get it’, all their problems would vanish. The problem with this thinking is that, at a business level, CEOs ‘get it’ more than anyone else. They know what matters to the business and everything else is, frankly, garnish. 

The reality is that the CEO:CMO misalignment is marketing’s issue to solve.

Do you speak CEO?

It is critical that marketing leaders are not simply passive victims. Nevertheless, Harvard Business Review reports that this indeed is often the case: 

74% of CMOs it surveyed say their jobs don’t allow them to maximize their impact on the business.

And they’re not wrong, according to HBR:

‘When responsibilities, expectations, and performance measures are not aligned and realistic, it sets a CMO up to fail.’

The solution? Marketing leaders need to initiate the process, structure better conversations with the rest of the C-suite, and set the right expectations. And this means speaking the lingua franca of business instead of PowerPoint charts teeming with MQLs, page-rank and CRO.

Setting the right expectations

The good news is that we’re already seeing initial momentum in this direction. Marketers are increasingly abandoning vanity metrics and focusing on those directly related to improving business.

The Revenue Rift research shows more mid-market and enterprise marketers using revenue and closed:won rates as their primary performance measures over those focusing on social engagement and email clicks (though these other measures are still widely used).

Of course, the problem of management’s lack of clarity remains. While this can be seen as a C-suite problem (surely they can do a better job?) the brunt of the issue will find its way to marketing’s door. So it becomes marketing’s job to interrogate their leadership about what really matters – what are the real business targets and what is expected from marketing to support the business in hitting them?

Even if this proves difficult and a clear strategic directive remains conspicuous by its absence, marketers can begin to ask themselves one anchoring question: 

'How are our marketing activities contributing to growth and driving the bottom line?'”

It’s not rocket science, far from it. But it will demand a focus on business outcomes rather than marketing tactics. And this will better prepare marketing leaders for the inevitable CEO/CFO question: What are you doing with all that budget we give you?


Download your copy of the Revenue Rift Report and get the full picture on what other marketers just like you are doing to meet the challenge of delivering for the bottom line. Got questions? Contact us at hello@consideredcontent.com, we’d love to help.


Revenue responsibility: are you owning it?

The Revenue Rift Report by Considered

Chances are, when you started your role in B2B marketing, you weren’t tasked with revenue generation. After all, delivering the company’s income has traditionally been the responsibility of sales with marketing more often offering up-stream support.

Take a look at the sales team in your own organisation. They spend weeks on end developing business opportunities, making contact with leads, forecasting revenue pipeline, juggling buying committees, and closing deals. It takes persistence, time and not a little luck to hit their quotas.

So what happens when less and less of the sales process is actually under their control? 

What happens when senior management decides that marketing should be more directly responsible for revenue?

 

The new revenue reality for B2B marketers

In most B2B companies today, sales still carries significant quotas, but marketing is becoming responsible for an ever-increasing amount of revenue. In our latest research52% of mid-market and enterprise marketers said they are under ‘a lot of pressure’ to deliver pipeline and revenue. This increases to 56% when we look just at enterprise marketers. 

52% of B2B marketers are under a lot of pressure to deliver revenue and pipeline

What’s more, it’s increasing. 

A massive 86% of respondents say the pressure has become worse in the last 12 to 18 months. Just under half (49%) say it’s increased a lot. 

Of course, advances in campaign analytics and marketing attribution have made rapid improvements. Today, more than ever, marketing can see the direct results of its activities all the way to bottom-line revenue. It’s imperfect certainly, often showing more correlation than causation, but it’s leagues ahead of where it was just a few years ago.

What’s more, the modern B2B buyer is showing an increasing tendency to avoid sales until they really have to. They’re doing more online research and content consumption, becoming more informed before making contact. In fact, LinkedIn found that the average decision maker reads 10 pieces of content before completing their purchase decision.

Simply, they’re spending more time as an ‘unknown’ – more time on marketing’s side of the fence.

 

Greater accountability = greater power

While the pressure is on, to be clear, this isn’t bad news. After all, it wasn’t too long ago that marketing was under constant pressure simply to prove the value of its existence

Having responsibility for the bottom line is a dramatic improvement in comparison. It demonstrates that companies recognise marketers as not merely the brand’s purveyors of creativity, but contributors to the business and its growth in a meaningful way.

But it does mean a greater emphasis on accountability – and that means delivering hard numbers. In fact, in our research, 31% of respondents say increasing marketing-driven revenue is a key marketing priority for the year ahead.

It also means implementing brand and demand strategies that can handle a greater part of the sales cycle, as the marketing department is also handing off opportunities at later stages than before. 

And it means having a far better relationship with sales.

Ultimately, it means marketers can no longer collect email addresses and pass them to sales as ‘leads’. They need to take a more rigorous approach, tracking prospects across the entire lead-to-revenue cycle, assessing and scoring them against meaningful metrics at every stage.

 

Getting performance metrics right

The move to more bottom-line responsibility means fluffy lead metrics are out (as are vanity measures of engagement such as likes and shares). So what replaces them?

The number one performance metric for the marketers in our survey is delivering marketing-generated pipeline/revenue – even ahead of closed:won rates. This is both a reflection to the increased pressure they face and a demonstration of a move to adopting a more commercially-focused mindset.

The reality is that, today, marketers have access to a wider range of data than ever before, and can respond it far more nimbly as well. As such they can gain greater intelligence and insight into buyers and trends than ever before (far more than is generally available to sales).

What’s more, marketing is a function that understands the wider market. The CMO is predominantly a market-facing role. It’s their job to be able to understand and respond to changes in customer expectations and demand.

 

The time to act is now

The results from our study are clear: it’s time for marketers to take responsibility for more of the pipeline, and ownership of the revenue targets.

Yet even as recently as January 2018, Deloitte reported that only 6% of CMOs are actively working on growing global revenue. And as a result their report points out:

Many CMOs struggle to establish the kind of interdepartmental collaborations that can allow them to expand their influence – and value – beyond the marketing organisation.

Not good.

So what does this mean in practice?

While nothing here is rocket science, becoming more focused on the bottom line can often mean flipping traditional approaches on their heads. Simply, it means starting with revenue and working back:

  • What’s the revenue goal? 
  • How many new customers will it take to meet it? 
  • What kind of customers?
  • What’s the typical ratio of sales qualified leads to get to that number of clients?
  • And how many marketing qualified leads need to convert? 

This will also mean balancing your short- and long-term objectives. The danger of developing a revenue obsession is that longer term brand building gets ignored. However, significant research shows that without investment in your core brand, long-term revenue growth will stall (see How Brands Grow by Byron Sharp and The Long and the Short of It from the IPA). 

It’s about balance. 

On one hand, it means focusing on lead generation and revenue acceleration over the near term (the next two or three quarters). This may mean building what’s starting to be called a Revenue Operations (RevenueOps) capability that’s custom tuned to moving prospects through the sales cycle and converting more of them at each stage. 

But it also means continuing to build a distinctive, relevant brand that will deliver a revenue multiplier over the longer term. 

It is still the case that buyers tend to select from a surprisingly small number of potential vendors. These will be drawn from those that they are somewhat familiar with (and will be the ones they tend to research as a trusted source of information). The reality is, you need to be on their radar before they begin the purchase process. And that means growing your brand.

 

Reaping the rewards of greater accountability

The new revenue reality comes with a higher level of pressure and responsibility for sure. But it offers rewards, as well. 

According to Gartner, marketing leaders that own or share P&L responsibilities command 20% larger budgets.

That could go a long way towards making the purchasing process better for sales and buyers – and getting marketing closer to its revenue target. And ultimately, it will allow marketing to fully take its place at the top table of business decision making.

 


Download your copy of the Revenue Rift Report and get the full picture on what other marketers just like you are doing to meet the challenge of delivering for the bottom line. Got questions? Contact us at hello@consideredcontent.com, we’d love to help.