The pandemic appears to have sparked a shift to short-termism, despite the evidence for the effectiveness of a long-term strategy. B2B marketers need to focus on the right metrics to strike a balance as we look to the recovery.
For the last two years The Marketing Practice and Marketing Week have conducted research to understand the drivers of effectiveness in B2B. Last year’s survey showed a link between effectiveness and a long-term mindset: those who felt they were outperforming their competition were twice as likely to think long-term.
But this year’s survey shows a lurch towards short-termism. Since 2019, the number of B2B marketers devoting more than 60% of their budget to long-term goals has reduced from 21% to just 9%. Less than a third of B2B marketers follow the advice of researchers Les Binet and Peter Field, who suggest that for B2B the optimum balance is to spend 46% of budget on long-term goals and 54% on short-term sales activation.
Our survey was completed around two months after Covid-19 lockdowns began, so it’s perhaps no surprise to see this shift. But it highlights a key challenge for B2B marketers in the coming months: how to balance long-term approaches with the pressure for results and the uncertainty created by the pandemic.
Long-termism still wins
The research, conducted with over 400 B2B marketers, reinforces the link between long-termism and effectiveness. Leaders (those who claim to have outperformed the competition in the last two years) are more likely to resist the shift to short-termism, with 37% devoting more than 40% of their budget to long-term goals, compared to just 25% of the rest.
Leaders are also likely to see higher conversion rates, with 30% converting more than 10% of their marketing-qualified leads (MQLs) to business, compared to just 16% of the rest. This reinforces the link to effectiveness but also implies a focus on quality over quantity.
The pressure is on in most businesses for results in the near term, and it would be naïve to ignore this. Marketers have a key role to play in adapting to the recession and pandemic fall-out. And, as Antonia Wade, CMO at Capita, pointed out in a recent episode of the ‘Inside B2B’ podcast on Marketing Week, it’s better to anticipate the needs of your business stakeholders than have changes imposed on you.
“The pressure will be to revert to short-termist approaches but that will only undermine results.”
OpenJaw Technologies CMO and Marketing Week columnist Colin Lewis made the case earlier in the year – just before the lockdown kicked off in the UK, in fact – that “the key to effectiveness in B2B marketing is to understand change management”. The argument goes that B2B organisations are far less likely to be marketing-led at the top. So if you start sounding off about salience and distinctive brand assets, you’re likely to come a-cropper. Your first challenge is to get those stakeholders to agree to a remit in which marketing can be effective short- and long-term.
Our research supports this argument: in the last two years the top reason respondents gave when asked why campaigns fail was not the value proposition, or targeting, or a lack of brand consistency. It was “lack of buy-in from the business”.
Finding the right metrics
The evidence tells us that a long-term mindset pays dividends, even in a recession. But trying to make an 18-month-plus business case right now won’t fly. So how do we find the right areas to support the business in the near term, without sacrificing long-term efficacy?
Faced with the need to be accountable, it’s easy to retreat to upstream measures like MQLs. When the pressure is on, we can spend more on content syndication and paid search to create more ‘leads’.
But this would be the wrong approach. Partly because a volume play feels like the wrong strategy in the current climate, when customers are putting more value on relevance. But mainly because leads are only ever a means to an end, and they are likely to be a particularly unreliable measure in the coming months.
“By focusing on pipeline acceleration and conversion, B2B marketers can effectively support the short-term needs of the business.”
With huge pressure on businesses to transform their working practices and operating models, there are likely to be plenty of promising sales conversations. Leads and ‘inflows’ might look very promising. But with smaller budgets, less cash and intense scrutiny on spend, most leads won’t convert. That inflow will turn into lower conversion rates as leads spend longer and longer in the pipeline doldrums.
Instead we should focus further down the funnel on a goal that will loom large as a key challenge for B2B marketers in the next 12 months. We should focus on tackling the challenge of pipeline acceleration, or pipeline progression. Which means a highly targeted approach working hand-in-glove with sales, based on robust business cases.
Differentiation or distinctiveness?
By focusing on pipeline acceleration and conversion, B2B marketers can effectively support the short-term needs of the business. But as you become more targeted at the bottom of the funnel, how do you maintain the right longer-term communications strategy?
There’s a long-running debate around which is the best approach in B2B. Is it better to focus on differentiation (being meaningfully different) or distinctiveness (being meaninglessly distinct)?
Our research suggests leaders are significantly more likely to claim they are well differentiated, with 56% agreeing or strongly agreeing, versus 35% of the rest. Leaders are also more likely to claim they have a distinctive brand, with 54% agreeing or strongly agreeing, versus 40% of the rest.
But it appears it’s not so much one or the other as both together that makes the real difference in B2B. Of those who agree or strongly agree that they have both differentiation and distinctiveness, 78% outperformed their competition over the last two years.
The pressure will be to revert to short-termist approaches but that will only undermine results. We think that leaders will find a way to retain a strong long game and combine it with a nimble short game. They will use the principles of distinctiveness to build salience, and combine that with highly targeted, data-driven activation to win at the bottom of the funnel.