Strategies for B2B Marketing in a Recession, Part 2
The single most popular post of all time on this blog is 7 Strategies for B2B Marketing in a Recession: The Definitive Guide, written almost three years ago in June, 2008. In this post, I asked a few basic questions:
Should B2B marketers change their strategies during a recession? Does a recession always mean marketers have to work even harder to find ways to do more with less? Can a recession create opportunity for smart marketers to grow and thrive?
The recession has been officially over (at least in the United States) since June, 2009 — but to many people, companies, and marketers, it still feels like hard times. This means the basic challenges, and opportunities, of B2B marketing in a recession still apply.
I was reminded of this when listening to Marketo’s Chief Revenue Officer Paul Albright in his recent webinar, Demystifying the Strategies of High Momentum Marketing and Sales. In it, he claimed that “Coming out of a recession is the best time to claim market share.” So, continuing my series of posts inspired by this webinar, here are some additional thoughts based on Paul’s experience about how to make the most of the opportunities created by today’s economic turmoil. As he says, “winners don’t waste a good recession”.
Focus on Growth: Pain Points become Gain Points
Bain & Company research shows companies are two times more likely to significantly transform their industry rankings in the years following a recession. And the enterprises that rise to the top 25% during a downturn typically sustain the market premium for an average of three years.
The key in this post-recession economy is to focus on growth. Over the last few years, businesses have cut costs and streamlined processes to improve their bottom line. Now it’s time to reap the benefits. With all these new efficiencies in place, each dollar of top line revenue can flow to even more profit and shareholder value. And new winners and losers will emerge as a result.
As The Economist wrote last February in the article American Business: Never had it so good, companies today are leaner and stronger than before the recession — but most of the growth has come from cost cutting.
“Around 90% of the productivity growth in corporate America has come from cost-cutting, and that is now reaching its limit,” says Carsten Stendevad of Citigroup’s corporate-advisory arm… To increase profits still further, firms need to increase sales far more than most analysts think they will, reckons Mr Stendevad… “Whereas 2010 was a stabilisation year [for corporate America], 2011 will be a year of investing in laying the foundation for growth,” says Mark Spelman, global head of strategy at Accenture, a consultancy…. Thanks to recent productivity improvements, corporate America is well placed to turn higher sales directly into higher profits, says Mr Standevad.
It’s like Selling Power CEO Gerhard Gschwandtner said at the Sales 2.0 Conference in March: in coming out of a recession, we need to shift from analyzing pain points to understanding gain points
A 20% Productivity Increase = Millions More in Revenue
Where will this post-recession growth come from? In the webinar, Paul refers to Jim Collins’ book Built to Last to remind us that business performance is ripest for dramatic improvements in the handoffs between functions. In particular, companies looking for revenue growth should look at the where the revenue team, e.g. marketing and sales, comes together.
Most CEOs would agree that the average sales team wastes 45% of its time on inefficient tasks. In such companies, Marketing and Sales operate in separate silos; Marketing generates leads and unloads them onto Sales. For salespeople, this is baffling: what should they do next? Should they educate or nurture these new leads, or move them forward as opportunities? Is it time to close?
Needless to say, inefficiency reigns.
This is a fixable problem. Thanks to revenue performance management strategies powered by marketing automation technology, marketing departments can now do much more in the marketing funnel to ensure they pass only qualified leads and opportunities to Sales. For example, Marketo’s customers experience an average increase in sales and marketing productivity of more than 20% in the first year alone. For a mid-size business, this can translate to millions of dollars in revenue.
‘Always be Closing’ No More
Buyer behaviors are changing as fast as corporations have transformed their business processes. In the past, Sales was the face of a company; they were a potential buyer’s first interaction with the brand. Today, buyers create their own brand preference by conducting research online, particularly within their own social networks, before they even touch base with a sales rep.
Unless companies begin to sell the way their customers want to buy, they might as well write a prescription for their own failure. According to Gartner, by 2020 customers will manage 85% of their relationship with an enterprise without interacting with a person. This means the relationship between and responsibilities of marketing and sales must change: as sales teams focus on the end of the revenue cycle, a highly effective and streamlined marketing machine will become even more critical to successful business function.
The companies that transform the way Marketing and Sales work — and work together — will be the industry leaders of tomorrow. They’ll grow faster and generate more cash. They’ll innovate more often. And they’ll take market share from companies that don’t.
How about your company? What new operational efficiencies have you employed to generate revenue, and how have your B2B marketing processes shifted in response to the recession?