Similar to consumer brands, B2B marketers are facing challenges in an increasingly congested marketing environment. As digital marketing continues to transform and evolve, the number of platforms, digital elements and medium requirements are scaling and B2B brands are trying to keep up. At the same time business to business brands are faced with the additional burden of increased noise and competition for eyeballs online, making planning, strategy and ultimately marketing budgets are real concern.
B2B Marketing Focus
As digital transformation continues to touch B2B brands, organizations are increasing the expectations of their digital marketing results. In a recent study by CMOSurvey, this is being displayed in the form of priorities of Increased acquisition of new customers, Increased customer purchase volume and Increased purchase of related products & services topping the focus areas. Each of these marketing result priorities were reflected with a greater than 60% response rate by marketing executives, and clearly show an increased expectation of the role of marketing within their B2B organizations.
B2B Competition On The Rise
At the same time B2B marketers are focusing on increase customer acquisition and purchase volume, B2B brands are also expecting increased pressures from competition and pricing. In fact the CMO Survey study reveals that 72% of respondents expect more intense rivalry for customers from the competition and 62% expect additional competitor price-cutting pressures that will complicate the B2B sales and marketing results in the coming year.
The study further shows that 56% of B2B marketers are anticipating new innovation from their competitors, while 48% of respondents predicted the emergence of more new domestic competitors to enter their markets. Both of these indicators seem to be showing that B2B brands will have huge expected barriers from competition and therefore they will need to expect more from their marketing efforts in the future.
Where B2B Sales Come From
Despite the forced digital transformation facing B2B brands and the incredible growth of digital marketing, B2B brands are still lagging way behind in customer acquisition through the internet. In fact an average of only 10.3% of B2B sales come through the internet. I believe this shows just how far B2B brands need to come in order to more effectively bring their sales and marketing digital transformation inline with digital adoption within business. Let’s break down the numbers for the various B2B business segments.
Percentage of B2B sales obtained through the Internet:
Overall Sales via the internet – 10.3%
B2B Product Sales via the internet – 7.3%
B2B Services Sales via the internet – 9.1%
B2C Product Sales via the internet – 10.6%
B2C Services Sales via the internet – 19.8%
B2B marketers need to realize that the costs associated with the standard direct sales model are much higher than an advanced and effective inbound digital marketing customer acquisition model. When lead generation, sales funnel and direct internet sales are utilized properly within a B2B selling environment sales cycles are shortened and the cost of sales can be greatly reduced. Additionally, B2B digital marketing can enable brands to be far more efficient with their sales teams and realize an increase in revenue and profitability.
Additional B2B budget and customer acquisition stats:
Currently sales from domestic markets dominates the revenue stream for B2B brands at 81.2% of sales.
B2B Marketing budget spending on international markets saw a drop from 21.9% of budget to only 17.4% this year.
B2B Marketing Budgets Increasing
There is no way around it. B2B brands are increasing their marketing budgets at a progressive clip. In fact, CMO Survey reveals that over the previous 12 months B2B marketing budgets have increased a total of 6%. Furthermore, the survey respondents indicated that they expect their B2B marketing budget to increase another 7.2% in the next 12 months. These increases are a direct reflection of the digital transformation, increase in competition and pricing pressures that digital marketing is having on the B2B market as a whole and it isn’t expected to slow anytime soon.
Here’s how the B2B marketing budget increase shakes out for various B2B segments:
|Prior 12 months
|Next 12 months
This kind of data really indicates the challenges and opportunities that B2B brands are facing online today. Not only do they need to focus on getting their marketing budgets inline with their competition, B2B marketers also need to step up their digital marketing strategy and execution in order to take advantage of the clear opportunity for increasing sales, revenue and profitability using digital marketing channels.
B2B marketers must step up their digital marketing functions through budget increases, talent acquisition, partners and content marketing. B2B brands should take a deeper look at their digital marketing presence, lead funnels and especially their messaging and build a formal integrated digital marketing strategy that will enable them to do more online sales at lower overall costs and using fewer human resources. Lastly, B2B’s need to invest in social selling training and solutions that will enable their direct sales staff to leverage what is being done with their digital marketing and improve the overall sales process.