Marketing after the watershed: part 1

The world has changed in the last two years, and the one thing everyone agrees on is that it’s not going back to how it was anytime soon. McKinsey has called it “The New Normal” – a fundamentally different business environment.

A combination of economic factors and social phenomena have collided rapidly to reshape the marketing landscape. Where strategies were previously predicated on historical norms and certainty, marketers now need to make change the constant in their planning.

 As Lowell Bryan, a Director of McKinsey has said “…the flaw is trying to think that you can predict the weather—as opposed to designing a boat that is capable of withstanding all sorts of different weather. The objective is not to control things you can’t control but to enable you to be relatively better at delivering results and performance over time, no matter what the weather is. I think that what has been the big wake-up call for people…is because they can’t see the future. And they haven’t got a business model and a strategy designed for an uncertain, unpredictable environment. They’ve got a strategy and business model for smooth sailing.”

The marketing department’s being buffeted by the weather on two fronts – zero budgeting and headcount freezes prompted by the recession are making it harder to put in place teams who can spend time designing the boat (orchestrating major new programmes internally), whilst the sea keeps on getting rougher ( the growing role of participatory media and a decline in trust of traditional media means that when those programmes are executed, they struggle to make an impact in a fast-changing environment.)

Commentators are calling it the “age of reference” as opposed to the previous era of deference. “[We] are now entering the “age of emotional proximity”, says Marketing Week, where peer recommendations surpass all other marketing.” Bell Pottinger echoes this, saying “people prefer to trust people like themselves rather than traditional authority sources.”

Add to that the fact that corporate reputations are in tatters after the events of the last few years, (according to the 2009 Edelman Trust Barometer 62 percent of respondents, across 20 countries, say that they trust corporations less now than they did a year ago) and it adds up to a maelstrom for marketers, who are struggling to respond.

And what impact has this watershed had on B2B marketing? For many, it feels like crisis point. Response rates are stagnant at best, plummeting at worst. Budgets are under threat, and the demand for measurable results is here to stay. You only have to look at marketing’s place in the corporation to see the impact all of this is having. CMOs typically last fewer than two years in their role. Senior marketers hardly ever make it to the board, much less Chief Executive and marketing departments frequently struggle to gain a good reputation for their product understanding and customer intimacy.

Calls for a newly customer-centred CMO are coming thick and fast. In a prescient McKinsey Quarterly 2007 article entitled  “The Evolving Role of the CMO” David Court argues that “Few senior-executive positions will be subject to as much change over the next few years as that of the chief marketing officer…” and suggests that the CMO must assume a larger role as the “voice of the customer” across the company as it responds to significant changes in the marketplace.” This is backed up by Forrester’s research, showing that half of business executives believe customer experience will play a very important role over the next three years. According to the same study, 73 percent of respondents cite a lack of clear experience strategy as a key challenge. In B2B organisations, where the customer relationship traditionally resides with the sales force, this challenge becomes magnified.

The watershed events of the last two years are shining a bigger and bigger spotlight. Companies learned in the last downturn that cutting marketing spend entirely leaves them uncompetitive as the upturn happens. And as boards look to their marketing teams for recessionary marketing strategies, strong leadership, innovative routes to the customer and particularly lead generation… many are left wanting.

Ultimately, in a challenging environment, the corporation focuses on shorter-term returns. Thus lead generation and nurturing requirements are boosted up the ‘ to do’ list. Lead generation programmes  are currently the top priority of 70% of B2B marketers according to recent research by AMR.

Historically, it was seen as the sole preserve of the sales team to bring in the “now” revenue – whilst marketing focused on the future through its research and brand programmes. Over time, this has lead to a belief from many sales teams that marketing are too intellectually focused, and are not interested in revenue generation, and marketers’ belief that sales are selling the wrong thing.

This legacy, however, has meant that up until extremely recently, lead generation was only seen as a tactical and ad hoc activity. As a result, demand generation often follows the cycle of feast or famine, with no continuous marketing campaign process supporting the revenue forecast. ‘Lead generation’ programs are frequently short term initiatives, driven by the need to fill quickly a dwindling sales pipeline. They often have no long-term strategy and no follow-up plan. This results in knee-jerk campaigns, which deliver an oversupply of low quality leads.

The poor quality of the intelligence provided to the sales force leads to low sales productivity and often frustration. What the sales team want and need is a steady stream of high-quality account intelligence; which enables them to focus their prospecting activity on the accounts where potential projects have been identified or they have the greatest chance of success. The delivery of high quality leads is dependent on gathering detailed and sometimes sensitive information from prospective clients (who are bombarded with requests for such information, often from competing marketing departments within the same company). It is increasingly recognised that such information can only be systematically and reliably gathered from an ongoing value exchange, via thoughtful and focused marketing communications.

So we can sum up the four main areas of B2B marketing challenge that present themselves as a result of the watershed: building and maintaining a great reputation, driving a fantastic customer experience, building solid relationships across multiple channels and generating leads that satisfy the business plan. 

Not much new in the challenges themselves then – but the way in which you tackle them has changed for good. Our strong belief is that marketers should start with the end in mind. Lead generation programmes can drive all four of these if designed and executed effectively and with a long-term commitment at heart.) Can deliver leads in the short term, but ultimately work to enhance reputation and relationship as well.

And yet, even when faced with today’s brave new world, B2B marketers seem unable to break out of the rather nostalgic view that lead generation is a “one-off” activity in response to short term need. This is why the watershed moment has been so important – from this point on, lead generation cannot be seen as an emergency programme or non-core activity any more; it’s a central plank to any B2B marketing strategy, and it’s core to the entire business development process. 

Lead generation is no longer the knee-jerk campaign that you give to a telemarketing agency – it’s the ultimate goal of everything you are doing. It’s time for marketing to realise that if you can’t plot the journey of how something contributes to sales then it isn’t worth doing. And if you do plot the journey, then everything becomes more effective.

So how to get started building post-watershed marketing programmes? Our next articles in this Watershed series will cover what’s working now and how to build a framework at the heart of your marketing department that delivers these four watershed priorities, what will work in the future and how to start looking at it now, how to develop the best relationship with sales (you’re going to need it), and how to structure your team to achieve all this.