I Predicted Marketing Automation and it Changed Everything – Here’s My Next Big Prediction

October 1, 2019 Jon Miller

I Predicted Marketing Automation and it Changed Everything – Here’s My Next Big Prediction

In the 13 years since I co-founded Marketo, the way companies buy B2B products has changed a lot. Yet, the way most marketers (and their tools) operate hasn’t evolved nearly enough to keep up.

As a result, the B2B marketing that you know today is heading towards a shipwreck in 2020 and beyond. It’s time for marketers to adjust the sails.

Chapter One: Marketing’s First Shift

In the first chapter of marketing technology (2000 – 2015) marketing departments became a strategic part of the revenue engine. As I like to say, Marketing evolved from being the department that throws parties and prints color brochures to becoming a real driver of pipeline and revenue.

In this era, Marketing began to own the top of the funnel, using marketing automation tools to send emails, capture and nurture leads, and pass them to Sales who, in turn, owned the deal close and post-sale growth. Marketing was the “owner” of email, controlling the keys to customer communication. This was exciting, and really helped Marketing build credibility and respect.

At many B2B firms today, Marketing is still focused on sending top-of-funnel emails, generating new business leads, and handing them to Sales like a baton pass — in fact, it’s what many teams are measured on. But as we will see, this model is looking increasingly outdated in the face of modern B2B buying.

The Next Chapter Looks Very Different

Over the last few years, we’ve seen new trends that are forcing a fundamental rethink about our core B2B Marketing beliefs. Each of these would be enough to force change, but together, they represent a fundamental disruption to the marketing status quo:

  1. Marketing is no longer the sole owner of top-of-funnel activity. New privacy regulations like GDPR and the rise of sales engagement tools like Outreach and Salesloft mean that many Sales teams send more emails than Marketing.
  2. Marketing is playing a bigger role at the bottom of the funnel. Larger buying committees (1216 people) mean that sales reps can’t possibly be talking to every stakeholder 1:1 during a sales cycle — yet talking with multiple personas is exactly what Marketing is good at. (In fact, Gartner research found that 83% of customers accessed digital channels even in the late purchasing stages.)
  3. Non-linear buying breaks the “baton handoff” model. The buying process is increasingly non-linear, making the traditional handoff between Sales and Marketing ineffective in serving today’s highly complex B2B buying journey.
  4. Increased focus on post-sale revenue. Most marketers are exclusively focused on generating new business, yet the rise of recurring revenue models and increased importance of expansion revenue mean the vast majority of revenue is generated after the initial sale. This is a fundamental mismatch that needs to be resolved.
  5. Rise of Account Based Marketing (ABM). B2B organizations are realizing it makes no sense for Marketing to focus on leads while Sales focuses on Accounts. Companies are now increasingly focused on winning larger deals at accounts in their ideal customer profile (ICP). These firms are adopting ABM to drive growth, even as results from inbound marketing have flattened due to competition and noise.
  6. Need for multi-channel orchestration. This explosion in marketing noise has made it more difficult to reach buyers through digital channels, making it more important than ever to orchestrate human and digital touches. A human, personalized touch is often more trustworthy, and thereby more effective.

Together, these trends are driving a fundamental redefinition of how Marketing and Sales work to create and win new business and drive account growth at scale.

If you think your job is to send emails and find leads for the sales team; wake up. The ground is shifting. Your role is changing.

What is the New Role of B2B Marketing?

Given these changes, ask yourself: What role will your Marketing play in the future?

CHANGE #1: Help Sales Own the Top of the Funnel

Today, sales reps and SDRs are taking on a much larger role at the top of the funnel, due to a few factors:

  1. GDPR and privacy laws have reduced the number of marketing emails sent in affected countries. Some companies are shifting their plans to send personal emails from a salesperson, instead of HTML emails from marketing.
  2. More tools are available to accelerate Sales email. Many reps are adopting tools like Outreach, SalesLoft, and Yesware, and by some estimates, these high-velocity sales reps can send 1000+ emails per month each using these platforms.
  3. Companies with smaller marketable databases can find new buyers using sales prospecting tools to fuel faster growth.
  4. Personalized emails are often more effective. Buyers are more likely to engage with a great cold email that has been customized for them over a generic HTML email from Marketing.

That means Sales is working on the activities that used to “belong” to Marketing, such as sourcing email addresses, prospecting new leads, emailing prospects, and leveraging social media. In this new environment, Marketing has a new job. To be successful, they must influence and guide their revenue team on how to create relevance for each customer, not just execute campaigns.

“Marketing needs to act in a consultative role that really showcases the profession, coming to the table to say, ‘Hey, this is what we know our buyers prefer and here’s what I recommend we do with this account to meet the goals that you told me you have.’ ”
– Megan Heuer, VP Research, SiriusDecisons

CHANGE #2: More Integrated, More Orchestrated with Sales

Marketers, how you evolve to work with sellers is the most important factor in your success.

Your role is becoming less about pushing campaigns to leads, and more about creating meaningful interactions for different members of an account’s buying group — often in conjunction with Sales and SDRs. It’s about supporting sales cycles, accelerating deal velocity, and working more efficiently together with Sales.

In short; more integrated and more orchestrated.

It’s synchronized and simultaneous, not sequential.

Rather than a hand-off baton pass, great Marketing and Sales teams operate as a soccer team, working together to pass the ball back and forth down the field to create and win new business and drive account growth.

“The traditional model of linear deal progression, with a handoff from marketing to sales, won’t work for complex modern B2B buying.”– Brent Adamson, Distinguished Vice President, Advisory, Gartner

This is B2B marketing orchestration, an ongoing and coordinated process throughout the entire customer journey. To support this new go-to-market motion, Sales and Marketing must look at the same data (see our guide to ABM analytics) and proactively share insights relative to each account and engagement tactics. (Hint: ABM standups help!)

According to TOPO’s 2019 Account Based Benchmark report, the #1 indicator of account-based success is the coordination between marketing and sales. TOPO’s 2017 Marketing and Sales Development Orchestration research also shows organizations currently executing marketing-SDR orchestrated campaigns typically realize a 30-50% lift in ‘meetings set’ at target accounts, with some organizations reporting a 100% increase.

CHANGE #3: Focus Marketing Beyond New Business (Post-Sale)

Marketing’s focus must shift away from just new business to thinking about all kinds of revenue; new business, expansion, even retention. Modern B2B marketers will focus on the entire account journey.

This is important because as much as 80% of the revenue companies earn is generated after the initial sale. And The Pacific Crest SaaS Survey (now KeyBank SaaS Survey) found that the fastest-growing companies get disproportionately more of their new annual contract value (ACV) from upsells.

There are four ways marketers can change to support this new revenue process:

  1. Expand demand gen to include expansion — Demand gen teams should think about their role differently, adding campaigns, content, and contacts to drive pipeline for expansion business, not just net-new activity. Consider where various buying centers are in different parts of the journey against products, and note that this means possibly talking to new personas that historically have not been in your database.
  2. New measurement — rather than just net-new leads and pipeline creation, Marketing should also be measured by expansion pipeline and revenue, customer engagement, and other metrics that allow them to track and manage their impact on post-sale revenue.
  3. Help drive adoption and value — Some may say product adoption and value is a job only for the Customer Success team, but that’s like saying only Sales drives revenue. In both cases, Marketing can and should help. Marketing can support adoption by contributing what we do best — creating content, automating processes, nurturing contacts, etc.
  4. Brand affiliation — Our current use of customer advocacy is often limited to serve Marketing’s purpose e.g. using customers to generate a case study or a reference. Instead, Marketing should evolve from pure customer advocacy to creating a true connection with customers that drives a deeper level of brand affiliation — think of the loyalty of a Harley Davidson customer.

By the way, this is not just relevant for SaaS firms. Telecom, healthcare, distribution, banking, and large capital businesses such as jet engines are all thinking about recurring revenue past the initial sale.

CHANGE #4: Market to Accounts and People

It’s not enough to market to either leads or accounts. While traditional marketing automation is built around the lead, not the account, buyers are part of a committee, and marketers must be able to target them in the context of their broader account journey. This is a core principle behind the rise of account-based marketing.

However, at the same time, marketing is almost always directed at a person. You send a package to a person; you invite a person to an event; you have a meeting with a person. That’s why marketers need to address the needs of both accounts and people, taking into account the multiple dimensions of a deal including persona, account, behavioral history, intent, journey stage, and more.

CHANGE #5: Orchestrate Plays Across Channels

No marketing channel alone is effective enough to get your message through. According to InfoTrends, email-only campaigns have a 7.9% response rate, while account-based advertising has its own limitations:

  • Average CTR of display ads is 0.1%
  • Over 30% of US internet users have an ad blocker enabled
  • B2B match rates can be as low as 20%

Instead of single-channel engagement, savvy marketers are finding success building more orchestrated plays across channels that combine both digital and non-digital tactics in a seamless way. For example, following up on direct mail with an SDR call, or an event invitation with a personal follow-up from an executive.

“Marketing orchestration is an approach to marketing that focuses not on delivering standalone campaigns, but instead on optimizing a set of related cross-channel interactions that, when added together, make up an individualized customer experience.”
Forrester Consulting

CHANGE #6: Measure Marketing and Sales Impact On Long Revenue Cycles

The nature of B2B deals are long and complex. The way we measure the impact of Sales and Marketing needs to adjust in three ways to this reality:

  1. Include non-campaign touches. Traditional multi-touch attribution looks only at campaign successes to show ROI, but that misses the impact of everything else: web visits, email opens, clicks, and more. Consider the impact every touch has on the customer journey to truly understand what works and what doesn’t.
  2. Focus on Marketing and Sales touches. A non-digital phone call from Sales may impact pipeline just as much as a campaign response from Marketing. Given the team-based nature of modern B2B sales and marketing, ROI attribution today requires you to include Sales and SDR interactions as much as marketing touches. Perhaps the best way to drive more pipeline is to do fewer marketing campaigns and hire another SDR!
  3. Measure leading indicators of revenue. With such long sales cycles in B2B, you must look for leading indicators of account progression, not just pipeline and revenue. By the time you look at pipeline and revenue, it’s too late.

     “You can’t wait a year to see results [in ABM].” – Megan Heuer, VP Research, SiriusDecisons

  4. Focus on quality not quantity. Marketing needs to create influence with the people who matter in B2B deals, no longer on lead quantity. Which would the sales rep value more — 20 random low-level professionals downloading your white paper, or one meaningful conversation with a decision-maker at one of her target accounts?

B2B teams must be able to answer the question: Are the right people at the right accounts spending time with our company, and is that engagement going up over time? We need to start focusing on how we’re creating and deepening relationships, and how that engagement increases over time.

You Can’t Get There From Here — Existing Martech Tools Are Holding You Back

OK, so you understand that buying has changed and that you must adapt to the new realities of how marketing and sales need to work together. You want to work as a team to generate pipeline and revenue at every stage of the customer journey. You want to focus on quality, not just quantity. You want to focus on accounts and people. But you can’t. Your existing marketing technology is holding you back. Trust me, I should know — I was instrumental in building them.

The current marketing platforms were designed with a specific marketing process in mind: Marketing generates leads for new business, nurtures them, and passes them to Sales when they’re ready. And they are very good at this process. But they were not built to handle what’s needed today: navigating across accounts, people and buying centers; expanding existing customer relationships by cross-selling additional products; and supporting a dynamic, synchronized process where marketing and sales work as a team.

Put simply, you won’t be able to deliver on B2B Marketing today and for the next decade using technology that was built more than a decade ago. Trying to do so results in the pains many of you are so familiar with today: struggling to create enough pipeline, poor marketing and sales alignment, difficulty moving upmarket, slugging expansion revenue.

Current marketing technology prevents teams from embracing true B2B, account-based growth due to three major gaps:

  1. Fragmented data prevents teamwork. In standard, existing marketing technology infrastructure, the data you need about people and accounts are scattered and fragmented. Sales is often operating in an account-based mindset, while much of Marketing is lead-based — the two teams are working in different systems and looking at different data. There’s no comprehensive view of people, accounts, and buying centers, there’s no single source of truth.Because of this, Sales can’t see what Marketing is doing with their accounts and Marketing doesn’t know what Sales is doing (because we all know reps never log their activities, right?).Your teams can’t work together if they can’t even see what the other team is doing.
  2. “Lead-only” systems create unnecessary complexity. Traditional marketing automation (MAP) is built around the person, not the account.This affects the customer/prospect experience. Lead-only systems struggle to make sense of where the broader account is in the buying journey, which makes it hard to deliver the right experience for each persona and buying stage.Some companies respond by converting all leads to contacts, but this can be manual and expensive (we know of one company who estimated they spend $78,000 a year on this!). And even then, marketers still end up building complex networks of campaigns to ensure people get the right interactions. Marketing operations professionals are familiar with the resulting mess we call “spaghetti campaigns”. These are often so confusing that when an admin moves to another company, nobody understands how to manage the custom system left behind.
  3. Quantity-focused metrics measure the wrong things. We all know you can’t manage what you can’t measure, but the analytics built into existing marketing platforms technology focus on counting things (# leads, # responses, # opportunities, etc.) and not measuring the quality or value of each relationship. They also only measure marketing touches, ignoring critical sales interactions. What’s more, they focus only on the impact of Marketing on the initial sale, not beyond (expansion, retention, etc.).The result is that marketers struggle to show the value of their account-based marketing efforts and spend hours in spreadsheets to demonstrate the impact of their efforts.

The Path Forward – and Benefits of Change

Adjusting your Sales and Marketing for this new era of B2B, while truly getting these two teams to work together, is the single most important, impactful thing you can do to help your company grow. When Sales and Marketing teams are aligned, their companies see an average of 19% faster revenue growth and 15% higher profitability.

This is exactly why I founded Engagio. Our goal is to make the existing martech stack better with B2B marketing engagement software that delivers the modern capabilities you need to help Marketing and Sales to work as a team at every stage of the account journey.

With the right B2B marketing engagement solution, you can:

  1. Work with Sales as a team, not a baton handoff
  2. Focus on the entire account journey
  3. Market to accounts AND people
  4. Orchestrate plays across channels and departments
  5. Measure the impact of marketing and sales on long revenue cycles

I know all this sounds hard. But you know what else was hard? Back in 2008 when people were adopting marketing automation for the first time, they thought that was hard too. But it became essential for success over the last decade, just as making these changes today will be essential for the next decade.

Fortunately, there are small (but impactful) steps you can take to get started.

You can implement Lead-to-Account Matching (L2A) technology and create a data foundation so Marketing and Sales are looking at the same data. You can start sharing key account insights with Sales, letting them know about things such as engagement from key executives at target accounts, new web visits from accounts they care about, when cold accounts heat back up, or when any of their open opportunities stall out. And you can orchestrate simple plays such as sending a direct mail package, activating LinkedIn ads, and then following up with an SDR outreach.

The benefits of getting started are obvious:

  • More pipeline from “warm” prospecting powered by account insights
  • Time savings by automating manual processes and analytics
  • Better scalability of your ABM programs
  • Reduction in spending on ineffective programs based on ROI analytics
  • Better results from marketing spend with better targeting
  • Align and bridge the gap between Sales and Marketing

What Happens if Marketing Fails to Shift?

When I co-founded Marketo over a decade years ago, B2B marketing teams needed a path to earn a strategic role at the revenue table. That era’s tools gave them a way to own the communication with the customer. But, today, things are changing yet again, and marketers need to change with it to be seen as a valuable, strategic part of a company’s growth plan.

After all, you don’t get multiple shots at building, and maintaining, credibility with Sales and the rest of the organization.

Doing more of the same is… well, insanity.

Most marketers today find themselves in a continual struggle to create enough pipeline. It’s a top challenge at a majority of B2B organizations. The traditional model of digital lead generation followed by a linear handoff from marketing to sales no longer generates enough opportunities, or does enough to move accounts through the pipeline to close and beyond. As a result, many companies are missing their pipeline and revenue goals.

But, their solution is often, simply, to do more of the same. We all know that the definition of insanity is doing the same things over and over again while expecting a different result. Running more ads, crafting more campaigns, and sending more emails is not the antidote to fixing what’s broken.

That’s like trying to take a voyage on a shipwreck.

As we look ahead to the next decade, I’m more confident than ever that it’s time for the next change in B2B — we need different processes, skills, and technology to win. That’s why I founded Engagio, in order to address a NEW dynamic between marketing and sales who sell to target accounts.

It’s time to change the conversation around B2B marketing. The future of B2B is dependent on our ability as marketers to work with sales as a team at every stage of the account journey. Will you adapt?

The post I Predicted Marketing Automation and it Changed Everything – Here’s My Next Big Prediction appeared first on Engagio.

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