Have we reached a “new normal” for marketing budget growth?
IDC’s findings from its 9th annual Technology Marketing Benchmarks Study show concerning results about the future of marketing budgets. Prior to the start of the recession, marketing budget growth tended to keep pace with revenue growth. In high tech, this looked like 6 – 7% per year on average across a variety of firms, large and small. After everyone hit the reset button in 2009 and slashed budgets into the negative growth range, recovery to pre-recession levels continues to look distant, if not impossible, to achieve. Current marketing budget growth rates are only half of those rates seen previously.
For many marketers, business leaders and financial officers now demand way more efficiency and accountability than was expected 5 years ago. Marketing must build a business case for every program and demonstrate a return on investment. Those marketers who do this well win budget approval for key programs and those that don’t struggle along with shrinking budgets.
Can automation help marketing get more efficient and be more accountable?
Partially. It is almost universally accepted that applying technology to a poor business process only makes the flaws stand out. But process improvement is where the future of business marketing lies. In 2013, successful CMOs will turn their attention to managing change in this new era of marketing budget scrutiny and pressure. In a recent Forbes blog post, David Cooperstein — the leader of Forrester’s CMO & Marketing Leadership practice – outlines 5 areas where CMOs need to get smarter about before having change management conversations with their peers, team members, and agencies. I want to second his advice and add a couple of more points for CMOs who work with Chief Sales Officers in organizations where direct sales is a dominant part of the business.
Besides defining the future state of the organization, mapping process against that and figuring out where technology can help, these CMOS also need to learn more about how to:
1) Evolve the sales process. Today, buyers are more than half-way through the purchase process when they decide to talk to vendor reps for the first time. To get ahead of this, sales execs want account managers to “be more relevant”, to get into the need-identification conversation earlier by introducing buyers to critical, insightful information about their business. They expect reps to go online, mine social network relationships, and target executives with business-relevant information. That’s a long way from a cold call.
2) Shift from messaging to creating relevant conversation. Smart CMOs need to understand how the sales process is changing and partner with CSOs to make it easier for reps to have business-relevant conversations. Developing good marketing content that shares a unique point of view on industry-specific issues is the start. But managing the change needed in the sales process to encourage and reward reps for having business-relevant conversations instead of yakking about features and benefits, is a change management challenge marketing must help sales overcome.
I think David is spot-on when he says that it’s difficult for CMOs to articulated the change management required for marketing to succeed in implementing and making use of the technologies that are now available to them – and that they aren’t going to get much help from vendors like Deloitte, IBM Global Services and Accenture in the meantime. But I think B2B CMOs face a more insidious challenge – that of making marketing a true partner to sales – one that can help reps leverage the power of online, social activity to become a true partner to prospects, not just the organization trying to get them to sign on the dotted line. And to get this done without jeopardizing the brand image and equity many big firms enjoy.