Sunday, December 30, 2018

Our Most Popular Posts of 2018

This will be my last post of 2018, and I want to thank everyone who has spent some of his or her valuable time reading this blog. My goal for this blog has always been to provide content that readers will find to be informative, thought-provoking, and useful, and I've been immensely gratified by the attention and engagement this blog has received.

For the past few years, I've used my last post of the year to share which posts have been most widely read. Like last year, I'm only considering posts that were published in 2018. I've ranked the posts based on cumulative total reads, and therefore posts published early in the year have an advantage.

So, in case you missed any of them, here are our five most popular posts for 2018:
  1. Why Brand Building Still Matters in B2B
  2. Six Questions You Must Answer to Create Compelling Value Propositions
  3. How Marketers Can Nurture Buyer Trust, and Why That Matters
  4. Use the 70-20-10 Formula for Better B2B Marketing
  5. New Insights from The CMO Survey on Major Marketing Trends
Happy New Year, everyone!

Image courtesy of Republic of Korea via Flickr CC.

Sunday, December 16, 2018

Research Demonstrates the Financial Impact of Trust

Astute business leaders have long recognized that trust is a vital element of competitive success. But traditionally, trust has been viewed as a "soft" issue - one of those things we know is important, but find difficult to measure. New research by Accenture Strategy quantifies the impact of trust on both revenue and earnings.

So far this year, I've published seven posts here that have addressed some aspect of trust. I've devoted this must attention to trust because it has a significant impact on virtually all aspects of marketing. Trust lies at the heart of all business relationships, and back in January, I argued that widespread buyer skepticism of vendor-provided information was one of those elephant-in-the-room issues for B2B marketers.

Lack of trust produces a major drag on marketing performance. If buyers don't trust what you say, they won't give you credit for understanding their needs, or for providing relevant, personalized, and engaging content and experiences. It's no coincidence that most companies aspire to be seen as a "trusted advisor" by their customers and prospects.

Most business leaders instinctively understand that earning and maintaining the trust of existing and potential customers is essential for success. But because trust is intangible, its economic and financial impacts are difficult to measure and quantify. A recent analysis by Accenture Strategy has now established a clear and measurable link between trust and both revenue and earnings.

The Accenture Strategy "Competitive Agility Index" is a measure of a company's competitiveness that is based on three equally-weighted components:

  • Growth - Year-over-year enterprise value growth and revenue growth
  • Profitability - Multi-year views of return on invested capital, net debt, and EBITDA margin
  • Sustainability and Trust - A quantitative view of environmental, social, and governance factors, including the United Nations Global Compact principles, and a proprietary measure of trust based on publicly available data
In this research, Accenture Strategy used more than four million data points to calculate index scores for over 7,000 companies operating in 127 discrete industries. The index is designed to measure overall competitive agility, not specifically the impact of trust. But Accenture found that trust factors had a disproportionate effect on the overall index score - and on both revenue and earnings (EBITDA).
The Accenture analysis also makes the importance of trust abundantly clear. The authors of the study report wrote:  "Our 2018 analysis revealed that more than half (54 percent) of the companies we examined experienced a material drop in trust at some point during the past two and a half years. . . Across the 54 percent of companies in our sample that experienced a drop in trust, revenues at stake conservatively equate to at least US$180 billion, based on available data."
Based on this analysis, Accenture Strategy argues that companies must make trust a strategic priority. The study report states:  "Your leadership team must embrace trust as a core element of business strategy. All teams - at every level - must walk the talk. The choices they make every day need to support trust as a key element of their corporate business strategy."
The analysis by Accenture provides compelling evidence that trust has a significant impact on corporate financial performance. Therefore, it's important for marketers to make enhancing trustworthiness a key objective for all of their programs.

Illustration courtesy of chuks mbata via Flickr CC.

Sunday, December 9, 2018

The Unfinished Business of Sales-Marketing Alignment

Since launching this blog in 2010, I've written about various aspects of sales-marketing alignment 26 times. And I certainly wasn't the first person to address this topic. For more than a decade, most B2B marketing and sales professionals have recognized the need to forge a more productive relationship between marketing and sales, and many B2B companies have been working on sales-marketing alignment for several years.

Yet, sales-marketing alignment remains a hot topic and an ongoing challenge for marketing and sales leaders. Yesterday, I performed a Google search using the term "sales and marketing alignment." My search produced 320,000 results. When I limited the search to the previous year, Google still returned 22 pages of results.

So, as we near the end of 2018, it seems appropriate to ask how much progress has been made toward achieving effective sales-marketing alignment.

Given the continuing interest, it shouldn't be surprising that several research studies performed in 2018 address the topic of sales-marketing alignment. The research indicates that some companies have made meaningful progress in improving the quality of the marketing-sales relationship.

Earlier this year, for example, InsideView published The State of Sales & Marketing Alignment in 2018, which was based on a survey of more than 500 sales and marketing professionals. In this survey, 75% of marketing respondents, and 68% of sales respondents reported having a good or excellent relationship with their counterparts.

Overall, however, the 2018 research shows that many companies still have work to do to turn their marketing and sales organizations into a cohesive, high-performing demand generation team.

In the InsideView survey discussed above, respondents rated their sales-marketing relationship as weak or very weak on several important demand generation activities, including:

  • Defining and executing field programs;
  • Sharing knowledge about customer buying processes; and
  • Reporting results of joint activity.
In the 2018 State of Pipeline Marketing study by Bizible (and other firms), only 31.2% of survey respondents characterized the sales-marketing relationship in their company as aligned. Another 56.1% of respondents described their sales and marketing teams as being somewhat aligned.
In the 2019 Data-Driven Marketing & Advertising Outlook study conducted by Adweek Branded on behalf of Dun & Bradstreet, only 25% of surveyed B2B marketers said they and their sales counterparts share a full definition of who constitutes a qualified lead. Another 56% of the survey respondents said they and sales have agreed on a limited definition of a qualified lead, but they have no formal documentation of that definition in place.
The growing use of account-based marketing has elevated the importance of - and focused more attention on - building and sustaining a collaborative relationship between sales and marketing. But in the 2018 ABM Benchmark Survey by Demand Gen Report, respondents identified sales and marketing alignment as their second biggest ABM-related challenge (39% of respondents), trailing only proving ROI/attribution (40% of respondents).

Where Do We Stand?

So, where do we really stand with sales-marketing alignment as 2018 draws to a close? Many of the current "best practices" for improving sales-marketing alignment focus on two primary objectives:
  1. Creating a shared understanding among marketing and sales team members regarding the key elements of the company's go-to-market strategy, including the definition of the target market, core value propositions, and customer buying processes; and
  2. Establishing an agreed-upon lead management process (lead stage definitions, lead scoring criteria, etc.).
These objectives are important, but they aren't sufficient to create the level of alignment - or, more accurately, operational integration - that's required for high-performing demand generation in today's business environment.
Over three years ago, Scott Brinker described the situation eloquently when he wrote that the conventional methods for improving sales-marketing alignment weren't "so much a breakthrough in alignment as much as a negotiated peace settlement between two separate countries who share a common border. Trade policy and border control were established, facilitating commerce between them, but they were not one nation under a common flag."

What's Needed in 2019?

To take sales-marketing alignment to the next level in 2019, marketing and sales leaders need to focus on two additional objectives:
Recognized Interdependence - Effective sales-marketing alignment requires a widespread recognition by members of the marketing and sales teams that they need each other, and that an integrated approach to demand generation is essential for success. Therefore, marketing and sales leaders must constantly communicate and reinforce the importance of having marketing and sales work together seamlessly and function as a cohesive team.
Ongoing Collaboration - Effective alignment also requires marketing and sales to work collaboratively on an ongoing basis, and collaboration needs to occur naturally and spontaneously, whenever and wherever it's needed. Therefore, marketing and sales leaders must constantly communicate that informal, self-directed collaboration among marketing and sales team members is not only acceptable, but expected.

Image courtesy of m01229 via Flickr CC.

Sunday, December 2, 2018

The Most Critical Skill for Tomorrow's CMO

A recent article at the Harvard Business Review website argues that many chief marketing officers are at a career crossroads and face four possible futures, some more attractive than others.

The authors contend that customer expectations have risen to exceptionally high levels, and that meeting those expectations requires companies to achieve an unprecedented level of coordination across the business. Many CEOs have responded to this need by creating new C-level roles with responsibilities that span traditional business functions.

These new roles come in several "flavors" with titles such as chief revenue officer, chief growth officer, chief customer officer, or chief digital officer. The growing use of these new senior leadership positions obviously raises questions about the future role of the CMO.

Not surprisingly, the article's authors describe four possible "pathways" for today's chief marketing officers:

  1. Up - The CMO is promoted into a new role and given broader responsibilities for leading growth and customer experience functions.
  2. Over - The CMO keeps the same title, but his or her role is expanded to encompass new growth and customer experience responsibilities.
  3. Down - The CMO's role and responsibilities are downgraded, and the "head of marketing" may no longer be a member of the senior executive team.
  4. Out - The CMO leaves the company, either voluntarily or involuntarily.
If CMOs (or other top marketing executives regardless of title) want to move up or over instead of down or out, they need to demonstrate a new set of skills and capabilities. And there's no shortage of advice regarding what those skills and capabilities should be. Dozens of recent articles have weighed in on the skills and capabilities that the "modern chief marketing officer" should possess.
An article published earlier this year in the Deloitte Review provides an outstanding analysis of how the CMO role needs to change and offers concrete suggestions for how CMOs can earn the trust and confidence of CEOs and other members of the senior management team. The article is based in part on research jointly conducted by Deloitte and the CMO Council.
The Deloitte/CMO Council research revealed that the three most important drivers of CMO success are:
  • Knowing how to use customer data and analytics
  • Having an enterprise-wide business mind-set
  • Being the voice of the customer at the leadership table
In the Deloitte article, the authors recommend that CMOs should begin redefining their role by focusing on three key behaviors.
Relentlessly pursue customer expertise - Marketing is uniquely positioned to be the voice of the customer, and CMOs should constantly strive to improve their understanding of customers and demonstrate their customer expertise to other senior leaders. CMOs need to leverage data-driven insights to understand the whole customer journey, including those parts that don't directly involve the marketing function. They also need to build partnerships with other organizational leaders to deliver better end-to-end customer experiences and support the achievement of other strategic business objectives.
Make marketing make sense - CMOs should "speak the language" of other senior leaders and be ready to translate marketing concepts into terms that align with the objectives of those leaders. In other words, the CMO's goal should be to explain how marketing activities and programs will help other senior leaders achieve their objectives. Obviously, this will often require the CMO to quantitatively connect marketing initiatives with financial outcomes.
Establish a "center-brain" mentality - CMOs must balance the "right-brain" creative aspects of marketing with the "left-brain" analytical/data-driven aspects of marketing. Going forward, successful marketing will demand both strong analytics and inspired creativity.
The need for CMOs to acquire and demonstrate new skills and capabilities is also being driven by broader business management issues. Another recent article at the Harvard Business Review website observed that the average size of the senior executive team at large firms has ballooned in recent years. 
Although these larger teams provide some benefits, they also come with downsides. For one thing, many CEOs increasingly find themselves refereeing conflicts between senior executives. And even when outright conflicts do not erupt, there is a danger that each C-level executive will bring an overly narrow perspective about how to achieve enterprise-wide business objectives.
What CEOs really need are senior leaders who combine a broad and deep understanding of the business, functional expertise, and perhaps most importantly, sound business judgement. So the most desirable skill for "tomorrow's CMO" to demonstrate is the ability to understand how the business works economically and competitively, and how the marketing function can effectively support and advance the company's strategic agenda.

Image courtesy of cykocurt via Flickr CC.