For Chief Marketing Officers in B2B companies, there has never been a better way to show a direct impact on the business. Yet, at the same time, we often see how difficult it is for even very seasoned marketing leaders to follow through on the needed transformation of marketing. While there is much written about the “why” and the “what” of turning marketing into a revenue-contributing function, we believe that there is a lack of insights on “how” to handle the transformation. This article will cover those topics and hopefully provide some guidance on how marketing leaders can maximize the probability of succeeding with the often much-needed revamp of their function.
But first, let’s take a look at the current state of marketing and how things could be different.
A new buying reality has created a perfect storm for marketing
There is much written about how changing buying behavior and new technological possibilities create the need for a new B2B marketing playbook:
- Customers rely on digital touchpoints to complete buying jobs
- COVID-19 accelerates the drive towards having more virtual interactions, e-commerce, and self-serve
- More data about customer behavior is available than ever before
- The rise of social media and other digital platforms provide unique opportunities to reach customers and build your brand
- New tools and technologies available than ever before that can supercharge sales & marketing performance
While these factors should lead CEOs and commercial leaders to reconsider all parts of the “go-to-market” functions, the function that often needs the biggest overhaul is undoubtedly marketing. Yet, many marketing leaders still struggle to get the buy-in and mandate to make the best of these developments, as peers in the C-suite and board at the outset see marketing as a support function and cost-center. Some of the symptoms of this situation:
- Marketing has no mandate towards the business and is seen as an internal production agency
- Sales/marketing spend ratio of 80/20 or 70/30 split, leaving little money left for marketing to do great stuff
- CFO and CEO mistakenly see marketing as OPEX that needs to be reduced similar to rent and cleaning
- Marketing teams are populated with low paid project managers that are too far from the business and the customer
- Marketing is very rarely one of the top priority functions for star performers and talents – instead, they go into general management, strategy, digital transformation, or strategic sales
In sum, it is not a strategic transformation (where-to-play and how-to-play choices) but rather an organizational one: Making sure that the capabilities, mandates, and operating procedures are in place to make marketing a strategic powerhouse and revenue-contributing function.
The transformation requirements
While this article won’t dive too much into the “why” and “what” of what a typical transformation of B2B marketing function entails (you can read more in our 90-page guide on how to turn marketing into a revenue-generating powerhouse), there is a need to understand some of the high-level change requirements:
- New mandate: Marketing responsibilities are often spread thinly across several commercial leaders, and the CMO is not reporting to the CEO. This needs to change. marketing needs a strong leader, C-suite representation, and board exposure.
- New capabilities: Much more digital and analytical, content creation and distribution, more strategic and business-savvy senior people that can become experts on customer needs, understand all aspects of the portfolio, and work seamlessly with sales and product teams to develop top-notch full-funnel programs.
- More capacity: Generally, there will be a need for more people, that are paid more.
- More funding: from spending 2-4 % of revenues on marketing to spending 5-10 %.
While it is easy to agree on the needed change with stakeholders within the marketing function, it is much more difficult for the CMO to succeed with transformation as it requires strong alignment and support from stakeholders outside the marketing function. Having worked alongside CMOs and other commercial leaders for several decades we want to share some of the actors that at least maximize the probability of (but unfortunately don’t guarantee) success.
Eight pointers on how to increase the probability of succeeding a marketing transformation
1) Be truthful about the current state: Be as frank and transparent about the current state. Don’t try to create a glossy picture of the outset, it will haunt you once you start to pull the lever and be asked to create results. Also, be frank about the timeline: Often, sustainable results won’t materialize before 6-9 months into the program.
2) Create the case for change: This can never be presented as a cost positive or neutral transformation – it is an investment in future returns. This simple trade-off where CEOs would need to sacrifice short-term returns for the sake of even higher long-term ones – a tradeoff that they aren’t always willing to take. Understand where your CEO and board are – if this way of thinking is largely never applied – don’t start the transformation and, to be frank, consider leaving the company for a more progressive alternative. In this type of company, the marketing function will never be anything else than a cost center.
3) Be frank about the trade-offs: Commencing this transformation will also come at a cost. You will probably need to scale down your company´s event and trade fair presence, trade media presence, sponsorships, and even reducing the salesforce to fund more digitally enabled programs. This change is a cornerstone in the transformation, and some of your partners in the business, which is more “traditional” in terms of their understanding of marketing, will probably fight it. You can’t have your cake and eat it – so put the trade-offs on the table early.
4) Work the long and the short term at the same time – and avoid conflating the two: Launch small pilot programs very early (distinct hypotheses to be tested in a small part of the business) while also engaging on the more slow-moving and long terms transformation (new technology and new people, rewiring of processes). Here the pitfall is to conflate these two: especially making pilots too extensive (adding more markets and segments, expanding the scope of the program). Suddenly the time horizon expands, complexity goes up, and the needed investment increases. These elements defeat the purpose of the pilot programs, as the pilots begin to “compete” with the long-term transformation. The result can be that neither the pilots nor the long-term plan will succeed.
5) Centrally “developed”, locally “done”: A major pitfall is to make it a central ambition that never reaches the outer rings of the company. While this type of transformation most definitely will entail a centralization of certain activities, much of the action will still take part “out in the business”. To avoid this: have representation from the business and markets in the program governance setup, make sure that it is not just imposed “top-down”, but has a strong anchor at the regional or BU level. Create a regional business partner that will liaise between central and local teams, including providing bi-directional feedback and following through whether and how the tools, content, and methods are applied in the field. And in terms of marketing leadership, the CMO and other marketing leaders should really spend much time in the field with customers, local marketing teams, and salespeople to understand requirements and build rapport with local teams.
6) No bang without the buck: Some CEOs will ask whether you can’t do small tweaks and get the same effect? The answer is “no”. Many B2B companies (except SaaS that is digital by design) are fairly immature in terms of marketing, and the transformation required is usually quite extensive. Belittling the scope of the transformation and need investment will be counterproductive. There is no “transformation light”.
7) Don’t put the technology in front of the wagon: While the transformation is underpinned by buyers´ move to digital channels and the possibilities offered by technology and new media. The transformation is largely a people transformation. The amount of marketing and sales technology that either lays dormant or is heavily underutilized is staggering. Instead: create a distinct, ambitious, and progressive culture inside the team. Blend experience and talent. Pay more than the market. Create career paths. Invest in new capabilities and more capacity. MVP the technology at the beginning and mature the technology along the way. Do not start this as a CMS, marketing automation, and CRM implementation project. Tools are important but keep the suite light and focus on a few use cases at the initial phases to ensure that tools a probably adopted and utilized before scaling.
8) Mistaking it as a marketing-only transformation: This transformation affects the whole go-to-market engine, including sales and service/customer success. Sales will need to be better at using digital channels to engage customers, adopt new tools and improve analytical capabilities stop become more efficient and effective. Sales will also need to play a part in content creation and think more like micro-marketers. Not all salespeople are fit for this reality and there are new dependencies and requirements to sales and service colleagues that need to be clearly articulated and agreed upon.
What’s next?
While it might seem like many nicely placed arrows and workstreams will do the job, the hard truth is that the transformation is hard work and will entail many setbacks and sudden windfalls. Many interdependent levers need to be pulled simultaneously, and the transformation depends on factors that are somewhat outside of your control, including C-suite support, the overall trajectory of the business, and much more. That being said, there are a few first steps that you can control and plan ahead:
- Conduct assessment of current state how are you performing across key dimension be it digital & data, strategic capabilities, brand & creative – compared to the competition and be inspired by companies outside your industry
- Share assessment with CEO and highlight why this is a problem from a business perspective, including key focus areas to fix
- Create a new ideal blueprint for marketing function – focusing on operating model considerations (organization, technology, process) and the mandate and funding needed to deliver against that role
- Hire leadership team to set the team that needs to drive the transformation
- Start to pull other transformation levers in a set frequency. Manage the transformation through a small PMO that tracks key workstreams, reports and progress
Happy transformation!
