More and more B2B companies are looking for ways to leverage marketing technology (martech) to enhance their go-to-market activities. Our experience with recent projects has shown that companies that implement demand centers and successfully integrate their marketing, sales, and service functions generate better leads more efficiently, improve conversion rates, and achieve a higher return on their marketing investments.
These efforts ensure that targeted, personalized messages always reach the right people at the right time. (See Figure 1.) By automating the generation of qualified leads, demand centers free up salespeople to focus on value-added activities such as sales calls and conversions.
But for many B2B companies, the demand center and its integration with sales and marketing functions remain an abstract concept, not a cornerstone of revenue generation. Despite the proven benefits of martech, especially during challenging economic times, executives were not willing to devote time and resources to the necessary transformation. They were reluctant to change the status quo and remained confident in their company’s ability to weather uncertain times until the next recovery.
In other words, leaders only saw a smoldering platform for change, not a flaming one. Instead of orchestrating marketing and sales as a continuous process, executives viewed digital marketing and lead generation deliverables as separate from sales execution. In this perspective, B2B marketing is relegated to the role of generating awareness, whether through digital campaigns or analog channels such as trade shows and brochures. These companies have yet to transition this function to digital, automated lead generation, nurturing, and scoring.
A BCG study uncovered several reasons why companies hesitate to adopt technology platforms like demand centers, even when they recognize the positive opportunities of the platform and the negative risks of waiting. These reasons include a lack of talent, a “technology first” mentality, and outdated ways of working.
Suboptimal marketing and sales processes increase the costs of identifying, qualifying, and converting leads. They also reduce profitability for companies that serve certain customer segments, especially those that may be underserved, such as SMB customers. A fragmented tools and data landscape exacerbates this problem, as salespeople lack a comprehensive overview of up-sell and cross-sell opportunities and increased risk of churn in their customer base.
But management’s reluctance to create demand centers, including functional integration, will have broader implications in time. Maintaining traditional sales approaches and siloed relationships between marketing and sales hinders B2B companies’ ability to respond quickly and proactively to profound changes in the market.
Three Changes That Justify a New Role for B2B Marketing
Our recent experience shows us that there is a platform on fire. The consumerization of the B2B buying process, the growing importance of parts and service, and the potential efficiencies brought about by generative artificial intelligence (GenAI) are creating opportunities for the next wave of fast adopters to gain market share, deepen customer relationships, and reap the benefits. Increased efficiency will benefit from lead generation, qualification, and conversion. The “consumerization” of B2B purchasing
Advances in martech and the growing role of millennials and Gen Z in business decision-making mean that the buying process for B2B customers is increasingly similar to what consumers are accustomed to, with an omnichannel presence, intuitive interfaces, and positive user experiences. According to a 2023 report from Forrester, these generational cohorts will make up 64% of business buyers, and their “digital literacy” will lead them to seek information from a variety of third parties rather than self-service transaction channels and sellers. The scale and impact of these changes are so far-reaching that B2B companies need to embrace them as known, not as a new or passing trend.
The consumerization of B2B marketing and sales requires the marketing function to upgrade from simply generating awareness to a role as co-owner and primary driver of the entire sales conversion funnel. This requires a new marketing and sales operating model that covers the entire sales channel, with the demand center as the new function for lead generation, qualification, and nurturing. (See Figure 3)
The fluid nature of sales relationships with customers
Economic uncertainty and higher quality products have made customers more likely than ever to postpone major purchases to extend the life of their existing devices. This trend, combined with widespread consumer biases, has caused sales interactions across many industries to evolve from a series of discrete transactions to a continuous stream of opportunities that flow as needs arise. After-sales parts and service, as well as up-sell and cross-sell opportunities, now play a much larger role in generating revenue and meeting customer needs. As individual transactions tend to be less valuable, companies must focus on identifying, qualifying, and converting leads in more efficient and cost-effective ways.
Tools to efficiently generate and communicate ideas
Applying Martech and GenAI to lead generation and enrichment can improve marketing efficiency and account engagement by creating highly personalized marketing content, including visuals. For B2C applications, some companies have reduced the lead time for creating new marketing content and campaigns from over six weeks to less than six hours. For B2B companies, GenAI opens up many possibilities, including the ability to draw inspiration and insights from the extensive and diverse data they already collect about their customer base. This helps sales and marketing teams understand what a compelling offer should look like. It can also provide better business case and story recommendations that help teams reshape the decision-making process for individual buyers. This is especially helpful for new salespeople.
Given these three distinct changes, B2B companies can’t afford to miss out on the opportunities presented by a strong marketing function integrated with their sales and demand centers.
Three Steps to Strengthen Your Marketing Function
To take advantage of this changing environment, companies must align marketing and sales roles and responsibilities to ensure a seamless customer journey, including clearly defined collaboration and handoff points, and tight integration between the two functions.
In our experience, companies that have undertaken this transformation and achieved the benefits highlighted in Figure 1 have built such connections, adopted new marketing technologies and tools to gain more insights from existing data, and optimized and improved processes across the funnel shown in Figure 4. They also made complex transformations less intimidating by breaking them down into smaller integrated initiatives.
The primary deliverable of a demand center is the marketing qualified lead (MQL). Each should contain required and optional qualitative elements that enable the sales team to efficiently convert these leads into sales qualified leads or SQLs. An automated demand center in the funnel in Figure 4 uses available data to qualify and evaluate potential new business and prospects from existing business (upsell and cross-sell opportunities and churn risk). The highest priority leads are sent to sales for further qualification and eventual conversion, while others are given lower priority and sent back to the nurturing process or demoted. Demand Center’s GenAI module can incorporate a wide range of contextual data to scale and personalize lead generation and enrichment while accelerating the process.
To realize the full potential of demand centers, B2B companies should focus on three steps:
Build a connection between marketing and sales.
Spending resources on improving marketing or sales alone is like having a car with cutting-edge wheels but no axles or transmission. Strength and momentum come from full integration. This means not only breaking down organizational silos, but also the thinking behind them.
A feedback loop between marketing and sales triggers a flow of data and information, such as buyer archetypes and behaviors and their impact on conversion rates, allowing marketing to improve the quality of lead generation. A unified dashboard linked to a CRM platform gives companies a consistent and systematic way to track KPIs between marketing and sales. This connection also allows marketing and sales to develop a consistent strategy for prioritizing and winning accounts. Regular meetings include market monitoring, goal setting, planning ideal customer profiles, and strategizing customer-based marketing. Perhaps more importantly for internal working relationships, these connections change the perception of marketing from a quality, nice-to-have feature to a true co-owner and critical function of the sales conversion pipeline. The existence of MQLs creates a quantifiable connection between inbound leads and revenue generation, transforming marketing from a message generation tool to a targeted engine for tracking specific leads that can generate higher-value sales. This makes marketing activities measurable and easier to understand.
This connection also adds greater meaning to the end-to-end customer journey. An integrated go-to-market strategic plan between marketing and sales ensures leadership and oversight of all pipeline activities that run in parallel with this customer journey. Increase data usage.
Marketing must leverage big data and cutting-edge martech to personalize customer journeys and increase conversion rates. This greater use of data empowers marketing to generate leads with higher business value, higher propensity to buy, and supporting information that helps sales qualify them. Bundling all lead data in one place ensures a holistic overview and standardized lead qualification. This not only lays the foundation for scalable lead generation, but also ensures systematic lead enrichment and nurturing to hand over high-priority leads to sales. MQLs derived from this rich data set improve resource allocation by freeing salespeople from spending time on non-sales activities such as lead generation and initial qualification. They also create opportunities to pursue leads from underserved segments that salespeople have historically ignored because it is generally safer and more cost-effective to deal with existing customers.
Optimize the process.
Marketing teams are responsible for generating leads, nurturing and enhancing leads, and creating content to qualify marketing-qualified leads. Optimizing this process is necessary because too many or too few leads can kill sales efforts. To optimize the activity of the sales team, it is important to manage two parameters: the number of MQLs per week or month and the associated potential estimated SQL volume. With a weak MQL flow, there is a risk that the sales team will be underutilized and sales targets will be compromised. With an excess of MQLs, there is a risk that leads will be wasted or become stale if the sales team does not have enough capacity to contact all leads in a certain time.
Generating SQL is the first important activity of the sales team that processes MQLs. While the generation, maintenance and evaluation of MQLs are usually highly automated in the demand center, converting them to SQL often requires an initial detailed one-to-one interaction with the prospect.
Finally, companies need to enter into clearly defined and specific service level agreements between marketing and sales. This includes underlying KPIs and goals along the entire funnel or process. Clear service level agreements between demand center and sales ensure uniform certification of SQL and division of responsibilities. This typically requires investments in marketing and sales technology stacks such as CRM and marketing automation systems. But more importantly, definition of services and process elements.
Despite technological advances and fundamental changes in how customers buy products and services, many B2B companies still view technological change as a smoldering platform rather than a flaming platform. The combined force of these fundamental changes – the consumerization of B2B buying, the fluidity of customer relationships, and the emergence of new tools – has brought B2B companies to a tipping point. Companies that invest in platforms like demand centers and integrate their marketing and sales functions are better able to optimize their marketing investments, convert leads more efficiently, and deepen customer relationships.
