Strategic business-to-business (B2B) marketing has the power to make a tangible impact on your bottom line. It’s important for marketing to be viewed not as an expense to be minimized but instead as an investment toward achieving sales objectives. Yet marketing shouldn’t be viewed as merely a support function of sales. Instead, marketing and sales should be symbiotic — both working in harmony with a company’s business objectives. The benefits of B2B marketing can only be realized when marketing leadership and investment work together.
Let’s take a look at evidence that marketing can generate a positive return on investment (ROI) and some data that will help you both defend and grow your B2B marketing budget.
First, it’s important to note that, when done well, marketing adds real value throughout the entire customer journey.
During the discovery phase, marketing creates the necessary awareness to help position your company as top-of-mind among prospective customers. It can anticipate common questions or objections, helping to positively predispose and inform prospects about your products and services, and make your sales force more efficient. Finally, strategic marketing can make company solutions easier to find for intended target audiences.
To measure whether your B2B marketing is effective in the discovery phase, look for the following indicators:
As customers move into the consideration phase of their journey, marketing is what helps position your company as relevant to your target market and different from the competition. Marketing provides needed tools and content during your prospects’ research phase and can generate leads for the sales team’s follow up.
These indicators will show how effective your marketing is in the consideration phase:
Even during the purchase phase, marketing is key for supporting successful new customer onboarding through useful content. Marketing can be key to positioning your support team as relevant and helpful.
Look at the following metrics to indicate whether your purchase phase marketing is successful:
Marketing can help penetrate your current customer base with new, related services or products. Positive, supportive brand communication and promotion after a purchase will help to validate the customer’s choice.
One indication your marketing is working during the retention phase is an increased rate in sales per customer.
At the end of the journey, creating true advocates for your products or services is a job marketing can help with by leveraging your existing customer base for case studies, testimonials and reviews.
Measuring your B2B marketing effectiveness in the advocacy phase looks like the following:
As we consider the benefits of B2B marketing, there are three terms you need to know: share of voice, share of market and excess share of voice.
A company whose SOV is greater than its SOM is more likely to gain market share. In other words, there’s a direct correlation between marketing investment and marketing leadership. A study from Nielsen and the IPA dataBANK indicates that a 10-point difference between SOV and SOM leads to 0.5% of extra market share growth, on average. This study analyzed 123 brands across 30 different categories of “typical” marketing (i.e. not award-winning campaigns) and is the most recent study of this scale. Here’s what the study cites as the biggest drivers of growth:
As you can see, SOV is directly tied to a company’s success and should not be devalued. Consistent, quality marketing initiatives can help you achieve and maintain your presence — and your growth.
Moving beyond SOV and SOM alone, many marketing initiatives can be tracked, helping calculate the benefits of B2B marketing. There’s a simple formula you can use to help you calculate ROI:
(Sales Growth – Marketing Cost) / Marketing Cost = ROI
Outside of this formula, however, there are many ways you can measure the effectiveness of your marketing initiatives to help you defend and grow your marketing budget.
Example: cost per lead
If you know the value of a lead to your company, one major way to measure lead generation initiatives is to place a value on the leads generated through various efforts. If you’re not sure what a lead is valued at, consider the average cost spent on a trade show and the average number of leads generated to help you calculate the value of a lead.
According to a recent CMO study, the average marketing spending is 6.6% of a B2B company’s annual revenues.
Here’s how that spending breaks down.
And here’s how B2B companies are allocating their budgets by channel. (Note this study was done pre-COVID, so exhibiting budgets have been reallocated during this time.)
For B2B companies to see long-term success, budgeting for marketing support must be a thoughtful balancing of needs, opportunity and resources. The benefits of B2B marketing are directly attributable to bottom line growth, and demonstrable evidence that shows marketing generates a positive ROI when done well.