The Implications of a New B2B Marketing Framework
B2B marketing trends like the maturation of marketing automation software and the rise of inbound marketing drove notable M&A and VC transactions throughout 2012. Eloqua was acquired for $871 million, Pardot for $96 million, Marketo raised $50million (late 2011) and HubSpot raised $35 million. Operationally, their main consequence was the much-commented alignment between sales and marketing.
What does this mean for CMOs of B2B companies?
1. CMOs should really be called CRCOs – Chief Reach & Conversion Officers.
For B2B marketing guys, reach and conversion are all that matters. Everything they do should either increase the reach of their company, or convert visitors/followers/prospects into qualified leads. Every marketing channel, including traditional ones (like events or PR) can and should be assessed in terms of reach and conversion. Traditional marketing goals such as brand awareness or press coverage mean nothing if they don’t translate measurably into increased reach and conversion.
2. Their role should not be limited to the marketing funnel.
Reachand conversion remain meaningful goals along the entire sales and marketing cycle and beyond. The techniques and support materials that generate prospects and convert them into leads are very relevant to sales and client management processes. For example:
- The case study that convinced a visitor to fill out a form on your website will also help convince the decision maker to trust the influencer you have been selling to.
- The lead nurturing campaign you are using with prospects will become an effective sales acceleration tool when directed to new contacts within a target organization.
- The tutorials you created for marketing will also be useful for onboarding new clients.
A new B2B marketing framework
These two ideas are the basis for the following framework, which classifies reach and conversion activities by phase of the sales and marketing cycle:
Marketing Funnel: Attract visitors, get visitors to share content which (hopefully) goes viral
Sales Funnel/Onboarding: Engage all stakeholders within target companies
Existing Clients: Win social media followers, get reviews and case studies, get users to share content
Marketing Funnel: Get visitors to fill out forms, create prospect engagement
Sales Funnel: Send relevant content based on pipeline stage/persona, accelerate the process with triggered offers
Onboarding/Existing Clients: Explain existing features, maintain engagement
This framework isn’t revolutionary but it brings clarity to the sales and marketing alignment debatefor two reasons:
- Emphasizing that reach and conversion are two sides of a single coin is important. Packaging reach and conversion functionalities in a single tool was the intuition behind the success of HubSpot, and I don’t see how other marketing automation players could remain focused on reach or conversion alone.
- People rarely realize that B2B marketing responsibilities extend beyond the close, onto onboarding new clients and nurturing existing clients. While existing marketing automation tools let you manage client-nurturing campaigns easily, they currently lack onboarding functionalities, which seems like a logical development area for them.
Resulting market developments
Strategically, this framework has two implications.
1. Analytics for the entire sales and marketing cycle
Since this extends beyond the traditional frontier between the marketing and the sales funnels, it makes sense to track “marketing” ROI throughout the sales and marketing cycle.
Best-of-breed marketing automation tools do offer some analytics, but they are limited to traditional marketing funnel stages, and can be unsophisticated, especially regarding forecasting. The legitimate goal is to infer future sales (amount and timing) from current marketing expenses, which may drive increased integration between marketing automation software and sales analysis/forecasting tools.
2. Back office and front office players
Marketing automation processes may have become mainstream, but automating them remains far too complicated for most traditional CRM tools. This should accelerate the consolidation of the CRM software market into two segments:
- Back office software- essentially, CRM-optimized databases and middleware, handling data management and standard CRM workflows.
- Front office software- specialized applications providing the role/sector expertise that back office software lacks.
There can only be that many back office platforms, so I doubt today’s dozens of “small business CRMs” will survive – especially if Google wakes up and takes the simple step of adding “account” and “opportunity” objects to Google Apps for Business.
I also doubt that many large players in the CRM market will succeed in maintaining both a quality back office platform and best-of-breed front office modules. For example, can Salesforce realistically be as good as Zendesk in customer support, Box.com in file management, Zuora in subscription management… while remaining the best back office platform around?
Such a feat has rarely been achieved in other software markets with a similar back office/front office structure (e.g. financial software). But count on Salesforce, Oracle CRM and Microsoft Dynamics to try.