Is B2B Brand Marketing Making a Comeback?

Dentsu, the global provider of marketing and agency services, recently published the 2024 update to its Superpowers Index study. Dentsu has conducted this research annually since 2021, and the firm says it now constitutes the "largest ever systematic study of B2B buying behavior globally."

The 2024 update was based on interviews with 3,528 B2B buyers covering 6,539 buying experiences. Over the four years of the study, Dentsu has interviewed over 14,000 B2B buyers about over 25,000 buying experiences.

The Dentsu research had three primary objectives. It sought to identify:

• The drivers behind B2B buying decisions

• Who is involved in the buying process and what makes a difference to buyers at each stage

• How improving the buying experience impacts commercial outcomes

The Resurgence of Brand

One of the most notable findings from the 2024 research is that "personal" decision drivers have become more important to B2B buyers. This led Dentsu to assert that "Brand has never been more important in B2B."

Dentsu provided the interviewed buyers 30 decision drivers and asked them to rank the drivers based on how much influence each driver had on their buying decision. The following table shows the ten most influential decision drivers identified by buyers in 2024 and where each of those drivers ranked in the 2023 research.

As this table shows, "I feel safe signing a contract with them" was the most influential decision driver in both 2024 and 2023.

In 2024, the second and third most influential drivers were "Is known as being a good employer" and "Active thought leaders in their category/sector." Dentsu characterized both of these as "personal" drivers, and both were ranked significantly higher in 2024 than in 2023.

In the paper describing the 2024 research, Dentsu observed that ". . . for the first time since we started Superpowers, we see 'personal' decision drivers outweigh the more functional drivers in their overall importance in the B2B buyer journey."

The resurgence of brand is also reflected in the attitudes of B2B marketers. In the 2024 research, B2B marketers ranked "raising brand awareness/top of funnel performance" as the most important objective for future strategy, up from fifth place in 2023. Meanwhile, "demand generation/driving and converting leads" fell to seventh place in 2024, down from fourth place in 2023.

My Take

The relative importance of brand marketing vs. demand generation marketing (a/k/a "performance marketing") has been the topic of a long-standing debate in the B2B marketing community. A few years ago, Samuel Scott described this divide in marketing as a "cold war." Until recently, the proponents of demand generation marketing were clearly winning the war.

For nearly two decades, most B2B marketers have been primarily focused on using data and technology to improve the performance of their demand generation programs. Not surprisingly, most of the B2B marketing research published over the past two decades has also been focused on demand gen marketing technologies and techniques.

But despite the widespread focus on demand generation marketing, brand building never completely disappeared from the conversation. Throughout this period, a cadre of respected marketing thought leaders continued to stress the importance of brand marketing in B2B, and these thought leaders' views have been consistently supported by credible research.

Here are two other research studies that provide persuasive evidence for the importance and value of B2B brand marketing.

The Bain & Co./Google Survey

In 2022, Bain & Co. and Google surveyed 1,208 people at U.S. companies who were involved in buying several kinds of business products and services. From 80% to 90% of the survey respondents said they had a set of vendors in mind before they did any research. And, 90% of those respondents said they ultimately chose a vendor that was on their day-one list.

In an article about the survey for WSJ/Business, Therese Parkes with Google wrote that this behavior "means brand building and remaining top of mind during this process is essential."

The WSJ Intelligence/B2B International Survey

In a 2021 survey of 1,601 business decision-makers by WSJ Intelligence and B2B International, researchers asked participants to think about a recent purchase and reflect on the vendor that was ultimately selected (the winning vendor) and on a vendor that was considered but not selected (the losing vendor).

The survey found that the mental impressions buyers have about potential vendors before they begin an active buyer process have a significant impact on purchase decisions. Specifically:

• Survey respondents were more than twice as likely (79% vs 37%) to say they were very familiar with the winning vendor versus the losing vendor before their active buying process began.

• Respondents also said they had a higher level of trust (57% vs 37%) and confidence (52% vs. 37%) in the winning vendor versus the losing vendor before they started their buying process.

*****

So, is B2B brand marketing making a comeback? I think the answer to this question is "Yes," but its too soon to tell how much of a comeback. 

Les Binet and Peter Field have argued that B2B companies should spend 46% of their marketing budget on long-term brand-building programs. I suspect few, if any, B2B companies are spending at that level, but I don't doubt that astute B2B marketers are increasing their investment in brand marketing.

Top image courtesy of EdgeThreeSixty via Flickr (CC).

Buyer Insights That Should Guide Your Planning for 2025

With the fourth quarter of 2024 less than two weeks away, many B2B marketing and sales leaders will soon begin planning for 2025. To develop an effective go-to-market plan, it's vital to understand how the decision-makers in your target market(s) prefer to engage with potential suppliers at all stages of the buying process.

Recent research by McKinsey & Company provides several important insights regarding B2B buyer preferences and behaviors that you should consider as you develop your go-to-market plans for next year. McKinsey's 2024 B2B Buyer Pulse Survey produced nearly 4,000 responses from B2B decision-makers across 34 sectors in eight industries from 13 countries.

Here are some of the key findings from the McKinsey survey.

B2B Buyer Archetypes

McKinsey's research identified three distinct archetypes of B2B decision-makers based on their varying preferences and needs.

• Adapters (44% of survey respondents) - These decision-makers are highly relationship-oriented. "While willing to try new channels, they tend to stick with patterns that they are familiar with and are slow to try new experiences, channels, and suppliers . . ."

• Innovators (20% of respondents) - These decision-makers ". . . are on the cutting edge when it comes to newer technologies . . . They are highly likely to be on any and all digital channels."

• Seekers (36% of respondents) - These decision-makers ". . . demand a seamless omnichannel experience. If they don't get it, they are quick to seek out a new supplier."

Planning Consideration - McKinsey found that all three archetypes are "consistently present" across geographies and economic sectors. Therefore, it's likely the potential buyers in your company's target market(s) will include all three archetypes, and your go-to-market strategy will need to contain elements designed to appeal to each buyer archetype.

The "Rule of Thirds"

McKinsey found that B2B decision-makers interact with potential suppliers in multiple ways. In the 2024 survey, respondents reported that on average, they spend about one-third of their "interaction time" engaging with suppliers via each of three types of interaction.

• Traditional - In-person meetings, direct mail, fax, etc.

• Remote - Phone calls, video conference calls, emails, etc.

• Digital self-service - Company websites, e-commerce, chatbots, internet searches, mobile apps, etc.

McKinsey observed that this "rule of thirds" is consistent across all stages of the buying process and that it holds true across all geographies, industries, company sizes, and buying scenarios (new vs. repeat purchases, high-value vs. low-value purchases).

Even more significant, McKinsey found that the "rule of thirds" is generally consistent across all three B2B buyer archetypes. Adapters have a slightly higher preference for Traditional interactions, but the difference is not great.

The most significant departure from the "rule of thirds" relates to buying scenarios. About 40% of the survey respondents tend to prefer Traditional interactions for "high-effort" purchases. High-effort purchases would include first-time purchases, high-cost purchases, purchases of complex products or services, and purchases from new suppliers.

Planning Consideration - The "rule of thirds" is nearly universal. Therefore, your go-to-market approach should include options for all three interaction types.

Omnichannel/E-Commerce

The findings of the McKinsey survey confirmed the importance of providing seamless omnichannel experiences, including robust e-commerce capabilities. Most survey respondents reported using ten or more ways to interact with potential suppliers during their buying process. This was up from five interaction channels in the 2016 edition of the Buyer Pulse survey.

Equally important, more than half of the survey respondents said they were likely to switch suppliers if they didn't have a smooth experience across channels.

The 2024 survey results also made the importance of e-commerce emphatically clear. Seventy-one percent of the respondents said they offer some form of e-commerce, and in those companies, e-commerce sales generate 34% of total revenue, on average.

The survey also confirmed that many B2B buyers are comfortable making larger purchases via e-commerce and other remote interaction channels. The survey asked participants this question:  "What is the maximum order size that you would purchase through end-to-end digital self-service and remote human interactions for a new product or service category?"

Seventy-three of the respondents said $50,000 or more, 39% said $500,000 or more, and 20% said $1 million or more.

Planning Consideration - Unless your company is an outlier, your go-to-market strategy needs to include a major focus on providing seamless omnichannel interaction experiences, and e-commerce should be the centerpiece of your omnichannel strategy.

*****

Every company's competitive environment is unique in some ways. Therefore, not every finding in the McKinsey survey will be literally and precisely applicable to your situation. However, the broad trends identified in the survey should be carefully considered during your planning process.

Image courtesy of Mike Lawrence (CreditDebitPro.com) via Flickr (CC).

Why CMOs Need to Become "T-Shaped" Leaders

(Marketing's role in driving revenue generation and growth at B2B companies has never been more important. However, research continues to show that the influence of most CMOs with their CEO isn't as strong as the importance of marketing suggests it should be. This post describes how CMOs can elevate their standing with the CEO and other senior leaders.) 

The Vital Role of Marketing

Today's business decision-makers have easy access to information about almost every conceivable business issue, challenge, and possible solution. As a result, business buyers are increasingly gathering information and researching solutions via interactions with various forms of content, and the design and development of that content falls squarely in the province of marketing.

A 2023 survey by 6sense found that the average B2B buying cycle requires just under 11 months. The survey also found that on average, the first direct contact with sellers occurs at about the 8-month mark. This means about 70% of the average B2B buying process happens before buyers engage directly with vendor sales reps.

Where CMOs Stand With CEOs

Under these circumstances, it would be logical to think that the CMO's influence with the CEO and other C-level executives has increased substantially as marketing has become more essential to revenue growth. However, the research paints a more mixed picture.

It's clear that CEOs view CMOs more favorably now than they did a few years ago. In 2012, The Fournaise Marketing Group released the findings from interviews with more than 1,200 CEOs in North America, Europe, Asia, and Australia.

Eighty percent of the interviewed CEOs said they did not really trust and were not very impressed by the work done by marketers. Sixty-four percent of the CEOs said they had taken product and pricing powers away from CMOs because those factors are too important for business success to let marketers control them.

Just over a decade later, the picture had improved considerably. In The Third Annual CEO Study on Marketing and the CMO conducted by Boathouse in 2023, nearly half (49%) of the surveyed CEOs rated their marketing performance as "Best in Class," up from 24% in the 2022 edition of the survey.

Twenty-six percent of the CEOs in the Boathouse study gave their CMO a grade of "A" on the overall performance of their role. That was up from 16% in the 2022 survey.

However, the 2023 Boathouse survey also identified areas where CEOs weren't as satisfied with CMO performance. For example, only 22% of the surveyed CEOs gave their CMO a grade of "A" on strategy, and the lowest number of "A" grades given to CMOs was on their "ability to drive company growth."

A CMO's ability to influence the CEO ultimately depends on gaining and keeping the CEO's trust. The current evidence suggests that CEOs place a moderate level of trust in their CMO, but trust other C-level executives more.

The 2023 Boathouse survey asked CEOs about the personal trust they placed in members of their leadership team. CMOs were in fourth place (out of eight C-level roles), behind the chief financial officer, chief operating officer, and chief strategy officer.

How CMOs Can Elevate Their Influence

So, what can CMOs do to increase their influence with the CEO? Recent research by Transmission, a global B2B marketing agency (in association with B2B market research firm NewtonX) provides valuable insights on this question, even though the research was focused on a different issue.

The goal of the Transmission study was to identify the attributes CMOs need to exhibit to increase their chances of being selected to serve on a B2B company's board of directors.

The research for the study consisted of interviews with current and former directors (CMOs and non-CMOs) at public and private B2B boards and a survey of 311 B2B CMOs. Based on the interviews, Transmission and NewtonX developed a "Board-Ready CMO Framework" that described eight skills, capabilities, or behavioral traits a CMO must have to be an attractive director candidate.

While this framework focused on the attributes that will help CMOs become "board-ready," several of the attributes can also help CMOs elevate their standing with their CEO.

When it comes to earning greater trust from the CEO, the most important of these attributes is what Transmission and NewtonX called "T-Shaped skills." As the diagram at the top of this post illustrates, a "T-Shaped CMO" is an individual who has deep marketing expertise and a solid working knowledge of "how the business works" overall.

A T-Shaped CMO understands the company's business model, what drives profits in the business, and what levers company leaders can pull to impact financial performance. He or she is knowledgeable about current economic conditions and trends and has a solid understanding of the competitive dynamics of the markets the company serves.

Perhaps most importantly, a T-Shaped CMO can place marketing in the context of the company's overall business strategy and provide sound, evidence-backed advice that will help the CEO and other senior leaders make the trade-offs that are an inevitable part of running a business in a complex, always-changing environment.

In short, a CMO who wants to have greater influence with the CEO and other members of the C-suite needs to demonstrate that he or she is an astute, well-rounded businessperson who also happens to be an outstanding marketer.

[Research Round-Up] Recent Studies Reveal the State of Revenue Operations

(This month's Research Round-Up discusses the major findings of two recent surveys addressing the current state of revenue operations. Revenue operations, a/k/a "RevOps," is a management system designed to align the activities of a company's customer-facing revenue teams to accelerate growth. The RevOps model has been gaining traction in B2B companies for several years, but it's still a relatively young management approach.)

Source:  Openprise

2024 State of RevOps Survey by Openprise in association with MarketingOps.com and the RevOps Co-op

• The survey produced 152 responses from operations professionals
• 47% of the respondents described their job role as "marketing operations," while 40% said "revenue operations"
• 37% of the respondents were at the "manager/senior professional" level, and 30% were at the "director" level
• Respondents were drawn from over 11 industry verticals; 44% were affiliated with information technology companies
• 47% of the respondents were affiliated with B2B companies, and another 19% worked at hybrid B2B/B2C companies
• 38% of the respondents were with companies having 100-499 employees, and 21% were with companies having 500-999 employees
• The survey report does not indicate when the survey was fielded

This survey explored a wide range of issues relating to revenue operations. Regarding RevOps implementation, 35% of the survey respondents said their company had a formal RevOps department, and 32.5% said their company had a functional RevOps team but not a formal department.

An overwhelming majority (89%) of the revenue operations survey respondents said their RevOps team supported all three of their company's go-to-market teams - marketing, sales, and customer success.

There was less agreement on who the RevOps team reported to. Forty-one percent of the revenue operations survey respondents said they reported to the chief revenue officer, while 21% said the chief financial officer, and 10% said the chief operations officer.

One particularly interesting finding in this survey was that organizations with formal RevOps departments did not experience better alignment among go-to-market teams than the overall average. This finding suggests that having a formal RevOps department won't in itself produce better alignment among revenue teams.

The Openprise survey also produced several interesting findings on other topics related to revenue operations, including how companies are managing data and technology and what skills are in high demand.

Source:  Revenue Operations Alliance

State of Revenue Operations Report 2023 by the Revenue Operations Alliance

• A survey of revenue operations professionals from all seniority and experience levels
• The survey report does not indicate how many responses the survey produced or when the survey was fielded
• Three-fourths (74.3%) of the survey respondents were drawn from two industries - software and technology information (53.6%) and technology and services (20.7%)
• Almost two-thirds (65.9%) of the respondents worked in North America, followed by 28% in the UK and Europe

Like the Openprise research, this survey provides data on a wide range of topics relating to revenue operations.

Six in ten (59.8%) of the organizations represented in the survey have only had a revenue operations function for 1-2 years, and nine in ten (90.3%) have had a revenue operations function for less than five years.

When survey participants were asked to identify the main activities they are responsible for, the top three activities selected were:

• Metrics and KPIs (89%)
• Pipeline strategy (81.7%)
• Tech stack management (79.3%)

Go-to-market strategy was a strong fourth at 78%.

When survey participants were asked which of their activities made the most business impact, the order changed slightly. the top three selections were:

• Metrics and KPIs (65.9%)
• Go-to-market strategy (51.2%)
• Pipeline strategy (43.9%)

Here are some of the other headline findings from the survey.

• Recurring revenue was the metric most frequently used by survey respondents to measure the success of their activities.

• 41.4% of the respondents said their RevOps team consisted of 2-4 individuals, and another 22% said they were the only person working in the revenue operations function.

• Four in ten (40.2%) of the respondents said their RevOps function has no dedicated budget allocation.

• Among the respondents with a dedicated budget, four in five (81.6%) said their budget is mostly spent on software.

• Three in ten (30.4%) of the respondents said they report to their company's chief revenue officer, and 25.6% said they report to their company's CEO.

This survey also produced findings regarding the value and influence of the RevOps function and the skills needed to be successful in revenue operations.