This research came about because, as a business, we noticed a change in the kinds of conversations we’ve been having with B2B marketers over the last couple of years.
Whereas we were expecting companies we met to want to talk about the kinds of topics that are all over the marketing blogs – social, inbound, <insert the latest tactic du jour here> – often, that hasn’t been the case.
Instead, either explicitly or implicitly, the conversations have been focused far more on pipeline and/or revenue than ever before. The marketers we’ve been speaking with appear to be under increasing pressure to demonstrate real numbers with real currency attached. Or else they’re tasked with accelerating the sales cycle, helping sales unlock new opportunities faster.
We wanted to better understand how their world is changing.
We looked around for existing research we could use but, for the most part, the available options didn’t cut it. They were often focused purely on tactics. Or talking to a disproportionately high number of small businesses and their agencies. Or over-indexing in one sector. Or using primarily US-based data.
So, we commissioned our own.
This report is focused on B2B companies in the UK. All 150 respondents work in companies of over £7.5m turnover and there is an even split between the mid-market (<1000 employees) and enterprise (>1000 employees). We have an even number of respondents from tech, professional services, financial services, construction and manufacturing. All are senior-level B2B marketers.
The picture the research paints is of a profession in rapid transition. One that, in broad terms, can see where it needs to get. But one facing real challenges in how to get there.
Rather than simply provide a dry retelling of the data, we wanted to make this report actionable. So, for every section, we’ve outlined the big question we believe B2B marketers should be asking themselves together with three things we suggest you begin doing as a result of the data.
This is, of course, simply our perspective. Every business is unique and you may have a different view. If so, we’d love to hear it. Likewise, if you see something here that you’d like more detail on, we’re happy to help.
You can reach us at firstname.lastname@example.org.
We hope you find The Revenue Rift a useful addition to your thinking and practice as a B2B marketer.
The direction of travel in B2B marketing over the last decade is unmistakable. Today’s marketers are now under more pressure than ever before.
No surprise there.
However, when commentators talk about this, the focus tends to be on the tactical. It’s all the choices and options that cause stress. It’s navigating an ever-changing marketing landscape that’s the main problem.
So we hear about the explosion in media channels, or conversely the threat of the Googlebook duopoly, or social in all its forms, or the bright shiny new world of AI and AR/VR/metaverse. We hear how you must be all in on ABM or inbound or content marketing or, or, or…
In reality, the real issue is more fundamental than this. Put in its most brutal terms: B2B marketers are under more pressure than ever before to deliver bottom-line revenue.
Sometimes this is couched in terms of pipeline. Sometimes it is about closed:won rates. Sometimes it’s about speed of sales cycle.
But the end result is that the C-suite is increasingly looking to marketing to hit numbers that have hard currency attached to them.
Of course, we’re all under pressure to deliver, nothing new there. If you want a stress-free life, B2B marketing probably isn’t for you. But, to be clear, for many, the levels of pressure we’re seeing today are intense.
In our study, 52% of mid-market and enterprise marketers said they are under a lot of pressure to deliver pipeline and revenue. This increases to 56% when we look just at enterprise marketers.
What’s more, it’s increasing.
A massive 86% of respondents say the pressure has become worse in the last 12 to 18 months. Just under half (49%) say it’s increased a lot. In fact, split out the responses by sector and the picture is even more stark.
Professional services has seen the biggest change followed by technology and B2B financial services businesses. This results in 70% of professional services marketers feeling under a lot of pressure with their tech brothers and sisters not far behind on 60%. (The makers of Valium must be laughing.)
Over half of B2B marketers are under pressure to deliver pipeline and revenue. More than 8 in 10 have seen this pressure increase in the last year.
Ok, but maybe this is just the new normal. Maybe we’ve hit a steady state and just need to adapt. Maybe, like new tech on the Gartner Hype Cycle, this will all begin to plateau soon.
We admire your optimism. Sadly, it’s not shared by those we interviewed.
Some 59% of respondents expect the pressure to continue to intensify in the coming year. And you know those professional services and tech marketers we mentioned above? They expect it to intensify the most (70% and 63% respectively).
Seriously, if you know a marketer in either of these sectors, stop reading this and go give them a hug. They need it.
Given the pressure, it’s no wonder that pipeline and revenue are becoming key objectives for the year ahead. Across our respondents, 31% say increasing marketing-driven revenue is a key marketing priority. Again, the bigger you are, the more you’re feeling the pinch. Among enterprise marketers, we see this number increase to 34%.
And it’s not just about professional services and tech marketers. Over half of those in manufacturing businesses are placing revenue in the key priority bucket for the next 12 months too.
There is a truism in business that what matters gets measured. Today, with all the talk about data-driven marketing, B2B marketers are measuring more factors than ever before. The survey’s respondents are no different, tracking a wide range of metrics.
But when we asked them about the number one metric they are using to measure performance, increasing pipeline/revenue came top (just ahead of closed:won rates). 31% say increasing marketing-driven revenue is a key marketing priority.
The need to prove marketing’s value has been an ongoing battle for pretty much as long as B2B marketing has existed as a discipline. While it is patently obvious to everyone in the marketing department that they’re a major business driver, others don’t always agree.
It’s not difficult to see why. While marketers can often point to circumstantial links to increased sales, they have struggled to show straight-line causality between their activities and business performance.
Of course, the discipline has had a tendency to make its life more complicated by adopting various vanity metrics (likes, shares, retweets etc). While this shows some people responding to certain tactics, more often than not, these metrics have no impact on bottom-line revenue. They can also lead to self-fulfilling approaches that simply boost these inconsequential measures even further.
We’ve already seen that marketers are under more pressure than ever to deliver pipeline and revenue, but are they really willing to stand up and be counted on their results?
Across our respondents, just 37% use marketing-generated pipeline as a key metric.
This places it just ahead of ‘social engagement’ metrics at 32% and ROI at 27% but behind tactical measures such as email opens and clicks (40%). And when we asked respondents to name the number one metric in use, while total marketing generated pipeline/revenue came top, this only accounted for 14% of the total.
At first blush, this looks as though B2B marketers will struggle in the face of a CEO or CFO asking them to ‘Show me the numbers’.
B2B marketers are tracking revenue from multiple angles but too few are getting to the core of aligning what they do with bottom-line success.
Looking across the various measures in use, we see a range of options that are de facto synonyms for revenue. For example, 45% of respondents track closed:won sales and 42% measure
On the pipeline side of the equation, half the respondents track the number of qualified leads (the most common measure used) and 39% measure net new leads.
What this shows is that, while just over a third of B2B marketers are willing to explicitly nail their colours to the revenue mast, a significant number are actively tracking sales-related metrics.
The key difference is between those who favour outcome metrics (revenue, closed:won, win rate) and those that err on the side of measures showing an input to sales (qualified leads). We’ll explore this further in the next section.
B2B sales cycles are long. Beyond entry-level SaaS offerings, it’s not uncommon for sales to take 6 to 12 months or more.
This has a significant impact on any marketer tasked with boosting revenue. Whatever they do today will not generally show a return for at least the next two quarters.
Is this just the way it is?
For many of our respondents, the answer appears to be: yes. Under a quarter (23%) of B2B marketers in the survey measure pipeline velocity (ie the length of the sales cycle). This falls to just a fifth for enterprise marketers. It drops even further for professional services with just 17% using this metric. In fact, only manufacturing businesses get over the 25% mark.
To be clear, over half will score leads based on where they are in the buying cycle, they just don’t focus on how fast they’re moving through.
This is curious.
For marketers under pressure to deliver revenue, taking targeted actions to accelerate the sales process is one of the most efficient ways of achieving their objectives.
Importantly, this is not just about being able to pull revenue from next quarter into this one (though that’s certainly a benefit for quarter-to-quarter B2B organisations).
Focusing on pipeline velocity forces marketers to more closely examine each opportunity stage in the sales cycle.
This enables them to spot where points of friction exist that not only slow sales but which often lead to opportunities simply vanishing into perpetual ‘no action’ loops (turning into zombie leads that can skew the overall picture of sales and marketing effectiveness).
It also helps forge better alignment between sales and marketing as both are required for effective analysis and both directly benefit from targeted action.
And, of course, it generates some very specific metrics that are understandable throughout the organisation.
Of course, it’s one thing to believe that what we’re doing is working, it’s another thing to prove it.
Over four-fifths (82%) of respondents say they need to improve the link between marketing activity and increased revenue. A third need dramatic improvement (and this leaps to 57% for professional services).
Yet attribution, to put it mildly, is a mess.
It’s not surprising. With the myriad of touchpoints over an extended sales cycle, determining what delivered revenue is hard. Was it the top-of-funnel content that got someone on your radar? Was it the live demo that provoked a trial? Was it an influencer saying the right thing at just the right time?
We see this confusion when we look at how B2B marketers attempt to prove effectiveness.
Overall, a quarter use no attribution whatsoever. This increases to 40% of those in the construction industry and 30% in financial services. Surprisingly, as they’re normally the early adopters, tech also over indexes with 37% not even trying to attribute success. It is also more likely that there is no attribution in mid-market businesses than those in the enterprise space.
But what about those who are trying to make the link?
Many are using a combination of measures. Most commonly used is when a lead initially converts (ie a contact is created in the database) – employed by 45% of respondents. This is closely followed by last touch (44%) and first touch (37%). Under a third (31%) use any form of multi-touch attribution, whether evenly split or weighted.
Attribution is critical to proving marketing impact on revenue, but most B2B marketers are struggling to deliver meaningful insights.
While this could be seen simply as a sign of B2B marketers just getting started with the easy stuff first, the implications of what you choose are worth further examination.
Once marketing is tied to a particular form of attribution, it will inevitably skew their activity as they try to make the numbers.
If, for example, you select initial conversion as your measure of choice, you will find yourself leaning towards tactics that fill the top of the funnel (or at least prop up the database).
Conversely, select last touch and you will probably focus more on the bottom of the funnel and sales support.
While no measure is perfect, it is only when you get to some form of multi-touch attribution that you can begin to take a more integrated approach, seeing which tactics have had an impact and which haven’t.
Attribution has become another part of the ever-exploding martech stack of course. There are now a range of players who are offering systems and solutions promising to do the heavy lifting for you. Looking across our respondents, almost 60% are using something. However, no system exceeds 10% market share – so it seems like no vendor has nailed it yet either.
All marketing is an investment (even if too many in business still view it as a cost). Whether you are paying third-parties to create content and campaigns or hiring people to run in-house operations, you’ll want to be sure you’re getting good value for your money.
A focus on return on investment is nothing new. Financial management has always asked what the business is getting for ‘all that money we give marketing’. But how this is calculated has important implications for marketing’s effectiveness.
As with so many marketing related calculations, there is no single way of calculating ROI in B2B. You can focus on pipeline, customer lifetime value (CLV), revenue, brand value or pretty much anything that matters to the business.
In our research, we see the full spread.
The most common focus is on the value of pipeline generated (used by 27% of respondents). Just behind, on 24%, is customer lifetime value (CLV) with marketing-generated revenue trailing in third on 18%.
There is some variation by company size (the focus on revenue places second in mid-market companies) and by sector (customer lifetime value is a clear leader in construction and revenue comfortably wins in manufacturing).
What’s interesting here is that some of these measures (as with the pipeline vs revenue split we saw earlier) are fundamentally about input to sales whereas others are about value to the business.
By focusing on pipeline, there is an implicit split between marketing and sales. Marketing generates leads (hopefully well qualified ones) and passes them across to sales (who hopefully agree that they are high enough quality and do something with them). With the right systems and internal SLAs in place, a formal split needn’t be the case, but this still smacks of throwing leads over the wall to sales and moving on to the next.
At best, today’s B2B marketers are hitting their ROI targets under 50% of the time.
The customer lifetime value and revenue approaches are fundamentally about value to the business (either over the short or long term). This revenue will only be realised in the first instance if everyone along the sales and marketing chain plays their part. And measuring and predicting longer term repeat revenue throws more emphasis onto customer satisfaction, retention and cross-sell/upsell initiatives.
So you have a definition of ROI, what kind of levels of return are we talking about?
In our study, we see a pretty even split between marketers aiming for between 1:1 and 2:1 (27%) and those setting a higher benchmark of between 2:1 and 5:1 (28%). But it’s one thing to set a target and another to hit or exceed it.
Across the study, our respondents hit their ROI targets just under 45% of the time. Enterprises fare slightly better than the mid-market and the top sector performer is tech (hitting their targets 53% of the time).
And this is where the rubber meets the road.
So we asked the respondents: Just how confident are you of hitting your revenue and pipeline targets?
Just 23% said they were sure of hitting their targets. This was bolstered by marketers in professional services and tech being the most confident (50% and 40% respectively). However, at the other end of the spectrum, both financial services and manufacturing appear to be having a crisis of confidence with just 3% of marketers sure of hitting their targets.
In this regard, enterprise businesses fare worst. Some 40% of enterprise marketers are either not very confident or not at all confident of hitting their targets.
So what’s causing this? That’s where we go next.
As we’ve seen, today’s B2B marketers are under more pressure to deliver pipeline and revenue than ever before (and this isn’t going to change anytime soon). However, few of them are confident of hitting their numbers.
Why is this?
Well, once we ignore wider macroeconomic factors over which few of us have any control, our respondents cited five main reasons for potential failure:
These five all rank higher than the usual suspects of not enough budget, time and people.
Let’s explore each in a little more depth.
It was tight at the top, but the winner on 23% was ‘Lack of clarity from management’. It’s difficult to know how to hit your targets if the targets themselves are either unclear or in constant motion.
We live in the era of the pivot where many companies (especially in tech) are in a state of constant beta. They are testing not only their positioning but their whole business with the market, trying to find the magic formula for a profitable model (or at least one that delivers the next round of funding or an advantageous exit).
It’s not just about tech and fast moving organisations however. Lack of clarity may reflect uncertain thinking at the top but it’s just as likely to be a result of poor communication between management and marketing. This will be especially so where marketing isn’t represented in the C-suite.
Again, there is a tendency across B2B for marketers to talk in very different terms from the rest of the business. We see this in other studies showing declining levels of CEO confidence in the abilities of their marketing teams.
It is difficult to see how this will improve until everyone involved shares a common language around business success.
The second major barrier, on 22%, is that timeframes are unreasonably short.
In B2B businesses we have the conflicting demands of quarterly-driven targets and multi-quarter sales cycles. More often than not, marketing is an upstream function. As such, anything marketers do today is unlikely to show a result (in revenue terms) during the next quarter.
So is this simply a case of management needing to face up to the basic realities of the market?
Yes and no.
Certainly most top-of-funnel activity takes time to show true pipeline and revenue results (unless you are simply focused on the initial conversion part of the picture). It is one thing to demonstrate you are a thought leader, it is another to show a prospect they have a problem that is both important and urgent, and it is yet another to convince them that your product, solution or service is different and tangibly better.
B2B marketers are no strangers to bottom-of-the-funnel sales support / sales enablement of course. Here we are dealing with a much shorter timeframe, helping sales to close more deals faster. But it is still the case that marketing will tend to put some materials together (the ever-present PowerPoint deck and collateral), make them available to sales, and hope for the best.
What’s missing is a more holistic, more granular view of the entire sales cycle. If like most B2B organisations you use some form of opportunity stage model, you already have the foundations for accelerating both pipeline and revenue. By examining each stage and assessing whether it is underperforming, you can plan more targeted interventions to lessen these points of friction and get things moving again.
This will enable you to deliver results across both the long- and short-term.
It is virtually impossible to consider barriers to B2B success without examining the lack of alignment between sales and marketing. Unsurprisingly, it came third as a key barrier in our research (on 21%).
While some of this is inevitably down to culture and, sometimes, an unfortunate mutual lack of respect, the core of the issue tends to revolve around simply not having a shared vision of success.
Fundamentally, this is about having common goals and a common language. If marketing is talking about engagement objectives and brand development while sales is talking net new revenue and time-to-close, it’s not difficult to spot the disconnect.
This is not to say that each can’t have a different tactical focus based on its particular skillset, but both should ladder up to a shared set of business objectives. And ultimately these will tend to revolve around pipeline and revenue.
It is now easier to create content than ever before – bad content that is.
In joint fourth place on 20%, poor quality content is seen as a key barrier to success by today’s B2B marketers. (This is most acute in financial services where poor content is the most often cited barrier on 41%.)
With the focus in recent years on content, content and (you guessed it) more content, it’s probably unsurprising that quality has taken a back seat to quantity. Most ‘thought leadership’ is anything but. Too many blog posts are little more than empty clickbait. And guides purporting to be about solving customers’ critical business issues simply mask undifferentiated product pitches.
The reality is that, today, content needs to be outstanding to stand out. It needs to be psychopathically focused on the customer and their issues. It needs to be truly insightful, bringing a fresh perspective to the issues that matter. And it needs to be active – focused on the next desired action and with a clear link to achieving your wider objectives.
This sets the bar very high. Too high for many companies. But, what’s a challenge for many is a major opportunity for others.
The last critical barrier to success, in joint fourth place, is underperforming agency partners (also on 20%). Again, some sectors are feeling the pain more than others. Both manufacturing and financial services appear to be suffering the most (rating this issue at 30% and 29% respectively).
Considering that many agencies will view themselves as being at the cutting edge of effective marketing communications, this will come as a shock. But maybe it’s not so surprising.
For many, the default approach has its roots in top-of-funnel awareness, brand building, and creative attention grabbing. However, as we’re seeing, B2B marketers are now under far more pressure to deliver bottom-line results. While the two are in no way incompatible, the traditional agency model will only get them so far.
Agencies are often stretched across a wide range of activities. They feel they need to be able to jump on every bright shiny new thing as soon as it launches (if not before). Content? Check. ABM? No problem. Metaverse? We’re all over it.
The danger with such a rapid turnover of tactics is that few are given the chance to prove or disprove their worth before everyone races on to the next.
Delivering sustainable improvements in pipeline and revenue demands a more systematic approach exploring the entire sales cycle. It means conducting a more thorough diagnosis of the business problem before jumping to a possible marketing solution. And it means taking highly targeted actions to increase the pipeline and unlock greater revenue (however unsexy these may sometimes appear).
Of course, some agencies will be able to do this but many will struggle.
So where do we go from here?
In B2B today, marketers are now reporting higher levels of ever-increasing pressure to deliver tangible bottom-line results – results that will stand up to scrutiny at CEO/CFO level.
The pressure is growing steadily more intense year after year and, as a number of recent studies have shown, C-level faith in marketing is in decline.
For their part, savvy B2B marketers are trying to adapt. They are abandoning vanity metrics and focusing on those more directly related to ultimate business success. This is a laudable first step.
But they know it’s time to draw direct lines between what they do and a revenue uptick – and they are struggling to do this.
Throughout this report, we’ve given you tangible actions you should consider if you are looking to close the revenue rift in your business. But fundamentally, the action points fall into three main areas of focus:
The pressure to deliver revenue is not going away. So it’s imperative that forward-thinking marketers really understand what matters to CEOs and CFOs. Importantly, you need to be able to have constructive conversations about where revenue objectives come from and marketing’s role in delivering them.
B2B marketers are increasingly drowning in data. With the right systems and integrations, you can now measure pretty much anything (albeit imperfectly in a number of cases). But too much of this data has precious little to do with ultimate success. Focus measurement on indicators that point to increases in revenue (whether this is in terms of volume, velocity or tactical effectiveness). In this, it will be critical to get a grip on attribution, moving to a multi-touch approach delivering greater insight into what’s really delivering results.
Yes, everyone talks about ‘alignment’ but it’s about more than this. Alignment simply means that both sales and marketing are heading in the same direction with common goals. While this is critical to success, there’s more to it. Marketing needs to understand what really delivers standout sales success and work to use its unique skillset to deliver a multiplier effect at every stage of the sales cycle. Likewise, sales needs to give marketing the insights from being on the frontline that will help them deliver better leads through more targeted approaches.
It is, of course, no easy task. However, get it right and you could transform marketing’s place in the business for good.
Jason Ball is the founder and managing director at Considered. With a multi-decade career in B2B marketing, he’s worked with world-leading brands such as Adobe, Google, EY and Cisco together with niche specialists in technology, manufacturing and professional services.