BtoB

GUEST COLUMN: Elana Anderson

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Some industry pundits call for the end of marketing as a standalone department, recommending instead that marketing functions be absorbed into sales, product and corporate groups. While we at Forrester Research believe just the opposite, we know that marketing must improve its value to justify its existence as a centralized function.

B-to-b marketing organizations are ineffective when they are siloed, tactically focused and not held accountable to produce real business results. Instead, a new approach is needed that fosters a partnership with sales, centers on the customer, and is driven by deep quantitative understanding of the target audience.

The role of marketing should focus on two core goals: feeding leads to the sales machine and driving the strategic push to define what corporate strategy should be addressed next. But today, the marketing function in many b-to-b firms is siloed.

Just more than half of b-to-b companies with revenues of more than $1 billion have a CMO. In companies without CMOs, the marketing function is often highly decentralized, with various marketing functions reporting to different organizations-such as sales or product lines-throughout the enterprise. A recent survey that Forrester Research conducted with BtoB found that for companies without CMOs, the biggest challenge is deepening the relationship and value of existing customers. Companies that do have a CMO, on the other hand, struggle to build an effective relationship with sales. What is clear is that the silo approach, whether it favors a centralized or decentralized marketing function, won't work.

B-to-b marketers seeking to elevate their status from corporate bullhorn to driver of their companies' go-to-market strategy have to emphasize quantitative facts over qualitative perceptions-a philosophy that we call left brain marketing. Transforming to a more data-driven approach with a more concrete impact on the business requires:

  • Deep audience knowledge. B-to-b marketers usually rely on qualitative feedback from direct sales and channel partners to determine where to focus their efforts. But smart companies now realize that the more they know about their audience, the better they can develop strategies to target and connect with that audience. As one executive we interviewed put it, "A lot of my peers use the buckshot approach-they rent lists and mail to all of the names. We identify the key firms we want to target and then the titles within those firms. We develop an understanding of who our targets really are and define our plan based on the most effective touch points for that audience."
  • Analytic techniques. Despite the difficulty in changing sales mores, many companies now realize that the data entered into CRM systems by a sales force are a potential gold mine. But the data are worth little without the analysis and mining skills required to discover patterns and trends, profile and segment contacts, and model customer profitability and potential as well as best prospects. For example, over the past year, Microsoft Corp. has been building an advanced analytics team of statisticians that uses SAS to mine sales and promotional history in order to target the most likely responders within key audiences.
  • Closed-loop measurement practices. Although most of the executives we interviewed complained about the challenges associated with tying their efforts to results, the leaders are intensely focused on putting in place the processes, data and tools required to measure results. According to one CMO we interviewed, "It starts with the planning process. In my organization, a program concept won't get past the first hurdle unless the measurement metrics are defined and they align with what the firm has set out to achieve. Then, as we design a program, we make sure that we figure out how we will calculate the metrics and report on them."

Elana Anderson is a principal analyst at Forrester Research. Reach her at eanderson@forrester.com.

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