o2markit B2B Marketing Challenges 2014! !!!! !!!!!!!!!!!!! consulting ltd What is, or should be, keeping the CMO awake at night these days?!

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1 o2markit consulting ltd B2B Marketing Challenges 2014 What is, or should be, keeping the CMO awake at night these days? In January 2014 Go2Markit Consulting Limited surveyed the views of executives from B2B technology companies of varying sizes to discover which areas of overall marketing activity c a u s e d t h e g r e a t e s t c h a l l e n g e s i n a contemporary world awash with talk about digital and social marketing. It was not a total surprise to discover that, while these new techniques do present problems, they were not the leading challenges being faced - some traditional headaches still remain and need priority attention. Mark Kusionowicz Founder & Director Go2Markit Consulting Ltd February of 8

2 Executive Summary I n J a n u a r y Go2Markit Consulting Limited surveyed the views of marketing, sales and general management executives from B2B technology companies to discover which areas of marketing activity caused the greatest challenges and concerns today. The survey also examined whether companies were using outside help, such as external consultants, to help address these big challenges. Deliver target revenue, profit & market share; Inbound & outbound marketing; Demand generation, lead management; Communications, content marketing; Sales alignment & enablement. Engage with the market Understand the market B2B marketing cycle Go2Markit Consulting Ltd Build the product, solution & services; Value propositions & messaging; Delivery, pricing & commercials; Solution requirements collection & prioritisation, roadmap planning. Define market needs, opportunities, competition; Create strategy target market segmentation, buyer/user personas, go-tomarket strategy; Build business case. Build for the market You can group the activities of the typical marketing team into a continuous cycle of 3 steps - Understand the market, Build for the market, Engage with the market. At this level of detail the 3 steps were quite close in terms of the difficulty they posed to companies, but the practical activities around Build and Engage offered more of a challenge than the strategic Understand. Which is your most challenging step? 43 Understand the Market Build for the Market Engage with the Market Score is a weighted calculation based on respondents ranking of difficulty Within each step the survey showed that the most challenging activities were in fact some of the more traditional problems for Marketing: Understand: Buyer/User Persona and market needs analysis Build: Value proposition creation and messaging Engage: Sales and Marketing alignment 2 of 8

3 Do you use external help? 52.5% Understand the Market Build for the Market Engage with the Market 64% When looking at the answers relating to usage of external help in these marketing activities we see that the step regarded as the most challenging, Build, tends to receive the least help - an indicator that more focus perhaps should be on this area? Indeed, the reason for the high utilisation of external help in the Engage step is likely not to be to address the most problematic activity, that of Sales & Marketing alignment, but the use of PR and marketing agencies in campaigns. A comparison of the views expressed by CEOs/Business Leaders and the other executives, especially the Marketers, indicates a mismatch of understanding for where key challenges lie. Business Leaders seem not to be aware that analysis in detail of target customers and their needs, or the development of market-winning value propositions, are as problematic as others believe them to be. An open exploration of these perceptions is urgently needed in order to enable the correct focus and resourcing. The Go2Markit Consulting Ltd 5-point plan conclusion for senior executives at technology suppliers in B2B sectors is: 1. Carry out an open and frank exploration of where the greatest pressures are being felt on marketing and business development within their specific company. Use this as input to resourcing and skills development needs rather than as a critique of the Marketing team at performance review time. 2. Put a greater focus and effort into defining specifics around target customer personas and solution requirements. This will lead to a greater understanding of development priorities and also contribute to more effective messaging. 3. Spend more time on crafting, testing and refining market leading and sale-winning value propositions tailored to specific target markets. This will mean sales activities, marketing content and demand generation will all be more productive. 4. Provide top level support and direction for a strategic project to align the sales and marketing functions and activities in a way that benefits both teams. They need to be acting as a single well-oiled business development machine to deliver the financial targets. 5. Consider utilising external consultancy help for these projects to bring new viewpoints, complementary skills and extensive experience that will enable a more rapid positive outcome. 3 of 8

4 Understand the Market - being specific is the challenge The survey results for activities related to market understanding and strategy, indicate that companies are not finding as much difficulty with the macro tasks such as selecting target What is the greatest challenge in the Understand the Market step? Target Market segmentation & selection 85 Competitor analysis & position 104 Business Case/Plan development 93 Market needs analysis 119 Buyer/User Persona analysis 120 Score is a weighted calculation based on respondents ranking of difficulty markets, analysing competitors or building business plans and strategies, as they are with the detailed specifics of target client profiles and needs. Even looking at the size of company this spread was quite consistent, although the smallest companies (1-9 employees) had more difficulty with competitor analysis than others. Do you use external help to Understand the Market? Often external 3% Around half of the surveyed companies make use of external resources such as consultants, agencies or freelancers for activities related to Understand. However, this usage is related to company size with only 13% of the smallest companies using external help and 73% of the largest doing so. Occasional external All internal 48% 1-9 employees 13% employees employees 70% 500+ employees 73% 4 of 8

5 While it is understandable that budgets are tighter in a smaller company, it may be worth bringing in external experience to inform the really key decisions and strategies. A well managed and focused project will keep costs under control so that internal resources can then be targeted on activities with the greatest positive impact on revenue and margin. Build for the Market - clear value propositions are required In the Understand step, specific detailing of target prospects and what they require from products and services was identified as the greatest challenge. So it is not surprising that solution requirement prioritisation is a struggle for companies in the Build step. After all, if What is the greatest challenge in the Build for the Market step? Roadmap & solution lifecycle planning Solution requirement prioritisation Solution pricing & commercials 73 Value proposition identification & messaging 93 Sales & Marketing collateral creation 51 Score is a weighted calculation based on respondents ranking of difficulty you are not clear about what they need how can you prioritise developments? However, more concerning for the whole company should be the fact that the identification of clear value propositions and the resultant Do you use external help to Build for the Market? All outsourced 4% Often external 4% messaging was identified as the top challenge out of the activities related to Build. This messaging is the basis for all sales and marketing activity that leads to revenue and margin. The two activities, value propositions and requirements prioritisation, were Occasional external 42% All internal 1-9 employees employees employees 71% 67% 500+ employees 22% 5 of 8

6 consistently the top challenges across all company sizes. As with the Understand step, half of the companies surveyed use external help with Build. In this step however, the largest companies were the ones who use the least, at 22% of respondents. Often the reason for the difficulty found by Marketing teams in creating winning value propositions is that they are too close to the detail of the products and services to be able to stand back and understand how to express their unique benefits. In this step an external person can often be the best way of facilitating the identification of the key selling messages. An external consultant with experience of product management can also help put in place processes to make development prioritisation a more structured and smooth process. Engage with the Market - aligned sales & marketing is key Understandably, the activities of demand generation and digital marketing are viewed as highly challenging because they are designed to directly impact sales pipeline. However, the greatest challenge in this step was identified as the alignment of the sales and marketing functions. Without the integration of the two teams into a single revenue earning engine, it What is the greatest challenge in the Engage with the Market step? Marketing content creation Marketing communications & PR Digital & Social Marketing Demand Generation, events, campaigns Sales & Marketing alignment 89 Score is a weighted calculation based on respondents ranking of difficulty is likely that focus or increased effort in other areas of the Engage step will not have the desired effect. There is a much higher utilisation of external resources in the Engage step of the marketing cycle, especially within the largest companies. This is most likely to be the contracting of services from PR, communications and marketing creative agencies for campaign delivery rather than any help with the critical sales and marketing alignment challenge. However, that issue also lends itself to benefiting from external help. Someone not immersed in the day to day interpersonal and political differences between sales and marketing teams can often help to create an integration of processes and measures that highlight the value contribution of each, while driving toward a common goal. This integration cannot be ignored, as increasingly it is the marketing function that is involved in the early stages of the sales cycle, 6 of 8

7 Do you use external help to Engage with the Market? as customers do more investigation of potential purchases through published marketing material and social media channels prior to the involvement of any sales executive. Often external 20% All internal 36% 1-9 employees employees 71% Occasional external 44% employees 500+ employees 88% Do business leaders recognise the challenges? 33% Although the spread of roles responding to the survey did not allow for a detailed role by role comparison of views, there were some worrying inconsistencies between the views of those holding CEO/Business Leader positions and the rest, especially the Marketers themselves. This is particularly striking in the Understand and Build steps of the marketing cycle. Where most respondents felt that defining the persona profiles and detailed needs of target customers were the biggest challenges in Understand, Business Leaders rated these as lower level problems with the understanding of competitors at the top. Likewise, most respondents identified value proposition development as most challenging in the Build step, whereas Business Leaders felt this was not so problematic. Interestingly, in the Engage step of the cycle there was more of an agreement about the key issues. The conclusion here is not so much who is right and who is wrong, but more that there is a mismatch in understanding of the challenges between the marketing practitioners and the senior executives which needs to be explored openly. An external facilitator for these discussions may well be an advantage in allowing for greater free expression and collaboration. 7 of 8

8 Survey Facts The survey was carried out using an online survey tool during January 2014 and had 50 respondents, not all of whom answered every question completely. The demographic splits of respondents and their companies were: Respondent Role Company Size Other 20% CEO/Business Leader 26% 500+ employees 30% 1-9 employees 18% Sales 18% Marketing 36% Geography RoW USA 4% 13% employees 28% employees 24% Rest of Europe 23% UK 60% About Go2Markit Consulting Limited Whether you are a startup company needing help to develop your marketing strategy but without the resources to recruit a seasoned Marketing Director; an established company with an overloaded marketing team that cannot get everything done; or anyone with a dysfunctional sales and marketing family that wants to create an integrated revenue generation machine we can help. Go2Markit Consulting Limited was founded by Mark Kusionowicz to provide clients with the benefits of an extensive experience gained from leading Business to Business Marketing (B2B Marketing) for technology companies ranging from the largest, such as IBM and BMC, down to VC funded startups. Go2Markit Consulting Limited is Registered in England & Wales, Registration Number Terms & Conditions You may freely copy and print this document for internal use. You may also excerpt material from this document, provided that you add the following notice: Copyright Go2Markit Consulting Ltd. Used with the permission of the copyright holder Additional reproduction of this publication in any format without written permission is forbidden. For information on allowed usage info@go2markitconsulting.com. While the information in this report is based on best available resources, Go2Markit Consulting Ltd disclaims all warranties as to the accuracy, completeness or adequacy of such information. Go2Markit Consulting Ltd shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. Opinions reflect judgement at the time and are subject to change. All trademarks appearing in this report are trademarks of their respective owners. 8 of 8