New research shows B2B companies are on par with their B2C counterparts and should look to B2B digital leaders for best practices.

The online world is full of warnings that B2B companies have fallen behind B2C companies when it comes to digital transformation. However, our new report, The 2020 State of Digital Transformation in B2B, clearly shows that B2B companies are on par with their B2C counterparts across five stages of digital maturity. This work is based on a comparison of 170 B2B companies with 238 B2C organizations and 160 B2B2C firms based on a survey conducted by the industry analysts at Altimeter, a Prophet company.

Five Stages of Digital Maturity

Digital maturity was determined by evaluating the relative adoption of digital practices across twenty-six criteria grouped into five areas: Leadership and culture, customer experience, marketing and sales, technology and innovation, and data and artificial intelligence. To understand the impact of digital transformation maturity, we grouped all of the respondents into one of five transformation stages based on their maturity scores (see Figure 1). Click here to see a deeper exploration of digital maturity in the full report.

Sixty-nine percent of all companies (B2B, B2C and B2B2C) have moved past the initial stages of digital transformation maturity and are investing in digital technology and data to accelerate growth and improve productivity. Two-thirds of these more mature companies are in stage three where they are focused on operationalizing the use of platforms and data at scale and putting them to work to drive growth. The most mature companies, 25 percent of total respondents in stages four and five, are characterized by efforts in integrating operations to deliver more personalized experiences and using emerging technologies such as AI to redesign customer experiences and offer digital services to accelerate growth. Time is running out for the laggards in steps one and two while those companies in stage three must turn their efforts into impact so they can justify their investment and continue to accelerate progress.

Digital Maturity is a Better Predictor of Capabilities and Plans Than Customer Type

Our study revealed that stages of digital maturity are better predictors of digital capability building, investment in technologies or utilization of advanced digital platforms and data. Differences between B2B and B2C companies on a broad range of digital transformation plans and practices become small once responses are controlled for the level of digital maturity.

“The most mature is taking a more opportunistic approach compared to those who are still struggling to put in place basic digital capabilities.”

B2B2C companies are more likely to be more digitally mature (41% in stages 4 and 5) than either B2B or B2C companies; probably because they must build capabilities to address both business and consumer audiences.

Digital Maturity Matters

Organizations that are furthest down the path of digital transformation are best able to turn uncertainty into a competitive advantage. Their response to the pandemic is illustrative. The most mature are taking a more opportunistic approach compared to those who are still struggling to put in place basic digital capabilities. While eighty-two percent of stage one through four organizations are continuing or pivoting their transformation efforts, seventy percent of the most digitally mature companies are accelerating their digital transformation efforts (see Figure 3). They recognize that disruption is a time to step forward not back and have the confidence in their digital capabilities to capitalize on the situation.

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While Scaling Personalized Content, CMOs are Transforming their Companies

I joined Prophet just about nine months ago after leading the marketing services practice at one of the largest interactive agencies in the world. I thought I knew a lot about marketing transformation. I now work with CMOs who are responsible for leading their own transformation agendas. Altimeter’s State of Digital Marketing 2020 only reinforces how much of a marketing transformation is now focused on driving more personalized customer interactions and achieving the scale of operations required to support it.

The CMO Transformation Agenda is Focused on Personalized Experiences

Digital transformation, a term du jour, is often used to articulate the need to modernize an organization. Transition to the cloud, which my prior firm often spoke to, isn’t transformation; rather, it’s a means to modernize capabilities, streamline costs, and improve outcomes. In recent work, it has become clear that true transformation is anchored on becoming either a truly data-centric or customer-centric company. These are not mutually exclusive targeted outcomes but can be a different lens for defining and prioritizing company priorities. For the CMO, this marketing transformation agenda often translates into the ability to deliver a more personalized series of interactions to their most important customers who will have the most impact on their business performance. In fact, 52 percent of respondents chose personalization as their top capability to improve, while 37 percent prioritized improving segmentation—a direct input into personalization (Altimeter’s State of Digital Marketing 2020). The effort to generate more personalization requires both data-centric and customer-centric marketing transformation capabilities and measured outcomes.

Source: Altimeter’s State of Digital Marketing 2020

Measuring Performance

CMOs have been modernizing their capabilities with digital for years, with added sophistication in finding and reaching audiences through additional digital marketing channels. Another priority is improving performance on existing digital channels (42%), while investing in new ones (34%) (Altimeter’s State of Digital Marketing 2020). What is reinforced here is how the growing demands on new channels go together with the need for more personalization. Finding new or existing customers in new channels requires cross-channel understanding and insights to drive personalized interactions. The relevance and timeliness of these interactions will ultimately directly impact marketing performance going forward. Experiences are increasingly instrumented and performance understanding requires data to be captured, measured, organized and given back at the speed marketing works to be effective.

Scaling Technology

These large amounts of marketing performance data must now deliver insights that are integrated with the marketing technology platforms to enrich more real-time interactions in acquisition and conversions.

The top challenge, however, remains purchasing and integrating the right Martech platforms with 52 percent of those interviewed stating that purchasing or integrating the right marketing technology platform was their biggest obstacle (Altimeter’s State of Digital Marketing 2020). For most organizations, these investments in content management, customer relationship management, and marketing automation have been underway for years. There is still an ever-increasing need to connect more core marketing capabilities into these platforms. These integrations enable core capabilities that marketing now deploys to drive personalization, as well as the ability to measure and optimize based on desired business outcomes. The race is in reaching scale in efficiency and effectiveness of these new capabilities.

Source: Altimeter’s State of Digital Marketing 2020

Scaling Processes and Workflows

What is also apparent in working with leading CMOs on their marketing transformations is that most of the challenges they face are underpinned by the need to embed new ways of working. Forty-nine percent of digital marketers said scaling best practices across business units and geographies were their biggest challenge (Altimeter’s State of Digital Marketing 2020). Marketing budgets are not increasing to meet the needs of providing more unique and personal content to more people. Despite what many friends in technology will say, in practice, no platform alone will close this gap without fundamentally rethinking what new skills are needed, how teams are structured and how to best integrate their workflows to streamline and gain efficiency.

Source: Altimeter’s State of Digital Marketing 2020

Scaling Content

How a company presents itself in advertising, messages, on its website, in its mobile applications, etc. will matter greatly in terms of how CMOs build relevance and depth of relationship with customers. Content matters. Content matters a lot. While marketing budgets aren’t wildly increasing and growing segmentation increases demand further, the delivery of needed templates, images, copy and offers will not scale to support that demand. In order to deliver this marketing transformation, CMOs will need to turn to AI and machine learning to deliver Intelligent Content systems that tie together their marketing performance data, segmentation intelligence, content management and marketing automation tools to dynamically create personalized advertising, email, web, and mobile messages in real-time. Creating this system of “intelligent content” is a major success factor for advanced personalization, and it makes it much easier to introduce AI-assisted enhancements once a robust system has been built. Ninety-five percent of companies are able to personalize messaging and experiences in some form based on customer data, with almost a fifth utilizing AI-driven predictive analytics to do so (Altimeter’s State of Digital Marketing 2020).  This growth in the need to leverage automation to deliver the scale necessary will only increase over time.

“The new CMO agenda is about personalizing customer interactions and achieving the scale of operations required to support it.”

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Prophet releases marketing and sales trends to watch every year, with advice on acting on them. Given the chaotic and unpredictable events of last year, we’re focusing on what trends from 2020 we believe are here to stay and our hopes for carrying over some good aspects from the Zoom-based year we enjoyed with clients and colleagues.

Instead, we want to talk about four established trends that we’re thrilled to see are still gathering steam. Even before the pandemic, these four marketing tactics were gaining new importance for sales and marketing organizations, but the need for digital transformation tipped them over the edge. We believe accelerating these efforts can lead organizations to be more customer-centric and deliver uncommon growth in the months ahead.

Marketing Learnings to Carry into 2021

Empathetic Marketing and Sales Strategies

Everyone knows that companies aren’t human, but this is the year we became intensely aware that the decision-makers who run them are. This heightened human-centricity will continue to shape the best marketing and sales strategies in the year ahead.

“Even before the pandemic, these four marketing tactics were gaining new importance for sales and marketing organizations, but the need for digital transformation tipped them over the edge.”

Whether it’s in terms of messaging, content, digital experiences or sales materials, it’s time to keep the empathy flowing. That means appreciating what customers are going through–and acknowledging their struggles–is more crucial than ever. It’s not just the right thing to do. It’s the best business policy and ensures companies are delivering on their brand purpose. Responding quickly and connecting through empathetic content that shares your values and says we get you are proven ways for brands to stay relevant and build deeper relationships.

Some favorite examples? As soon as the U.S. declared a National Emergency due to the pandemic, Hyundai and Ford introduced new job-loss protection programs for new owners. And IKEA and LEGO understood how worried parents are about stuck-at-home kids, quickly creating blueprints for blanket forts and reassuring videos.

Data-Driven Decisioning

Businesses that make data-driven decisions can move more effectively, leading to better customer and business outcomes. And while plenty of marketers have that level of data, too few also have the processes in place to act on it. Those that do, and those with teams assigned to accountability areas, are those that will thrive in the year ahead.

Early in the pandemic, Marcus, Goldman Sachs’ consumer banking platform, used data to gain knowledge on which of their customers needed help, resulting in targeted measures such as the introduction of a temporary hardship program, allowing its customers to postpone making a loan payment for one month at no additional interest. It also used its data to determine how to share the continually changing interest rates. By using data effectively, the platform is now better equipped than most to deal with the banking industry’s new, post-COVID-19 normal.

Fiercer Focus on Relationship-Building

More companies, including Disney and Target, are fueling growth by leaning into loyalty efforts. And they are making sure these efforts have an impact across the entire customer journey into the acquisition phase. They are using loyalty data to improve offers for all existing customers, which often proves to be a smart use of resources. Loyalty programs strengthen relationships and say to customers, “We’ve got your back.” They also help with customer acquisition to increase sales.

Direct-to-Consumer Convenience

Making products and services more convenient is an old idea. But as consumers swarm to e-commerce options, the brands with the most direct relationships with their customers–from DoorDash to Peloton to Glossier–have distinct advantages over much-bigger competitors. More companies, including B2B organizations, should find ways to emulate that closeness and convenience by helping to make convenient decision making for customers, following companies such as Levi Strauss, Lululemon and Nike that are expanding their DTC tactics.

Personal Aspirations for 2021

Just as the past year is reshaping corporate sales and marketing strategies, it’s changed people, too– us included. We’re getting to know colleagues and clients differently. For all its faults, Zoom is introducing us to co-workers in different ways, especially when their kids or pets drop in. We’re gaining a window into people’s lives and a better understanding of who they really are.

Despite occasional irritability, it’s also led to a sense of grace. After decades of expecting everything to go smoothly (remember when connecting to projectors was the most challenging part of the day), we are getting used to messy intrusions. Dogs bark. Delivery people ring doorbells. Babies need to get up and kids need help with school.

As our mental health frayed a little, we’re gaining a fuller understanding of self-care. Not only did we not mind when colleagues joined a meeting while walking outdoors, but it is also inspiring us to do the same. Also, we expressed what is important to us and set boundaries for important activities such as family meals.

Here’s hoping the new year brings us all more grace, empathy and some comfy clothes.

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Today, marketing plays an outsized role in shaping the experiences of customers and prospects. Chief marketing officers are increasingly responsible for delivering on company growth objectives, which means playing a larger part in the selling process. And this trend is intensifying as more customers demand highly-personalized interactions, requiring much deeper marketing and sales alignment.

These shifting dynamics position a CMO as the best tool, ally and salesperson the company may have. Let’s uncover five traits of great salespeople, where many CMOs already excel.

1. They’re hungry.

The best salespeople are eager to take on new accounts— aggressively delivering for the company.

With more digital marketing and measurement in place for most firms, the C-suite now expects marketing to not only contribute to growth objectives but also lead and deliver in a measured way. Increasingly, CEOs expect marketing to drive the bottom-of-funnel demand generation. With availability 24 hours a day, the modern marketing engine is constantly targeting advertising to attract new customers. More targeted marketing leads to more targeted customer-segment success. Both, marketing and sales teams are eager, hungry and incentivized to take on business outcomes by delivering an insightful view into how best to attract, convert, and serve the most desirable customers.

Many marketers are already there. Our Altimeter 2020 State of Digital Marketing report finds that the top objectives for digital marketing are to acquire new customers (40%) and increasing revenue from current customers (39%) are the top objectives for digital marketers.

2. They’re empathic listeners.

Top sellers have to be great listeners. They must understand the customer’s needs and how best to position the company, its products and services to suit them.

Listening to customer needs and delivering insights isn’t a new marketing function or capability. What has changed is the breadth and depth of that involvement for marketing. Marketing is much more involved, using insights to drive segmentation strategies leveraged by many different channels to sense and differentiate experiences based on segment needs.

Emerging self-service and “always-on” digital channels that can initiate interaction and carry it through to a sale are becoming more common, even in complex B2B selling scenarios. As marketing plays a critical role in developing customer experiences, the need for more personalized content, driven by marketing and sales, is also growing. As before, marketing must play a key role in listening to customers in all channels to generate meaningful insights. Marketing is also best positioned to enable more and better interactions, playing back sufficient empathy for customer needs in real-time.

Our research found that 95 percent of companies can personalize messaging and experiences based on customer data, with almost one-fifth using AI-driven predictive analytics to do so. (Altimeter 2020 State of Digital Marketing)

3. They build trust.

Effective selling requires strong relationships built on trust. That includes internal relationships. 

There has been a notable increase in collaboration with sales, with 75 percent of companies in our research said they have stepped up the way the marketing and sales functions work together in the last two years. And 60 percent have increased collaboration between marketing and customer service.

As prospects enter a firm’s funnel, marketing plays a critical role in capturing, quantifying, measuring and reporting more data on behaviors exhibited by different prospect groups. As marketing’s personalized interactions drive interest and affinity, the coordination of sales and marketing efforts highlights opportunities to build trust and loyal relationships with customers.

Just like a good salesperson remembers birthdays and children’s names to build familiarity, marketing is now capturing important details to reinforce important and tailored messages. Marketing can also scale this level of intimacy with existing customers to improve repeat purchases, cross-sell, up-sell and grow advocacy to gain new customer referrals.

There has been a notable increase in collaboration with sales, with 75% of companies increasing collaboration between marketing and sales in the last two years, and a 60% increase in collaboration between marketing and customer service. (Altimeter 2020 State of Digital Marketing)

4. They are prepared to optimize efficiencies.

The best salespeople are always well prepared. For full closed-loop reporting and deep customer insight to be achieved, marketing and sales are linking their data to back-office data.

Stitching together this back-office account information to customer behavior is the next big play for companies. It’s how they can deliver better experiences, improve operating models to focus on business outcomes and enrich overall decision-making.

It’s not surprising that the most desired skills for digital marketing new hires were data analysis (42%) and marketing automation expertise (39%).

Much of this work starts with more alignment of sales and marketing incentives and integration of their processes. This complete view allows the organization to coordinate marketing and sales efforts for greater efficiency. Marketing can then leverage AI/machine learning to automate many processes, delivering both marketing and sales interactions. Marketing can now sense the next customer need. When marketing is fully prepared, sales can show up ready for anything, armed with the right insight and offer at just the right time.

It’s not surprising that the most desired skills for digital marketing new hires were data analysis (42%) and marketing automation expertise (39%). (Altimeter 2020 State of Digital Marketing)

5. They’re polished.

Even the most likable salespeople underperform when they aren’t professional and organized.

While it’s wonderful that so many sales departments are rebuilding Customer Relationship Management systems, Content Management Systems and Campaign Automation technologies, these silos need to be linked together effectively. Whether they are from Microsoft, Adobe, Salesforce or others, they can become vast repositories of disconnected data.

“When marketing is fully prepared, sales can show up ready for anything, armed with the right insight and offer at just the right time.”

Companies can and are stitching these technologies together to drive integrated workflows for both sales and marketing. One central area that highlights this collaboration is demand generation, where marketing and sales integrate information for identifying, scoring and routing marketing leads. This streamlining and automating joint sales and marketing processes drive speed and efficiency, allowing both marketing and sales to show up as thoughtfully coordinated. They can deliver a polished customer experience.

But it isn’t easy. Fifty-two percent of our respondents say that integrating technology in this manner is their top digital marketing challenge. (Altimeter 2020 State of Digital Marketing)

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Digital has become increasingly integrated into who an organization is, what it does and how it grows. As a result, a digital transformation strategy becomes more interwoven in a company’s marketing approach. However, even in these digital times, it would be a mistake to not also plan for digital as its own separate entity.

While all marketing has a digital layer, all-digital encompasses more than just what’s apparent in traditional marketing. For this reason, we’ve put together a complete guide to building a powerful digital marketing strategy in 2020. We’ll cover what digital marketing is, its key elements and how to get started.

What is Digital Marketing Strategy?

Digital marketing strategy defines how a company can achieve its business objectives using digital channels, platforms and thinking. It asserts clear targets, prioritizes audiences, recognizes customer needs and behaviors, and details channel use and platform requirements. Put simply, it sets out how you plan and use digital to remain relentlessly relevant.

“All-digital encompasses more than just what’s apparent in traditional marketing.”

Intersections of digital marketing exist not only within branding and CRM but also in user experience (UX), customer experience (CX) and customer care as well:

• Artificial Intelligence (AI) and the Internet of Things (IoT) embed the brand into our product experience.
• Content strategy includes not only traditional marketing assets, but all content that can be levers for growth.
• Digital innovation is creating new services, products and experiences – things actually worth marketing.

How to Create an Effective Digital Marketing Strategy

In our work with clients across industries and markets, we’ve identified the seven steps needed to form a modern digital marketing strategy.

1. Determine the Potential

The status quo has changed and digital is imperative to be current, competitive and attractive in the market. On which channels are your customers engaging with you? What are your competitors doing to be transformative in digital? How discoverable is your brand and how many inbound leads have been converted to sales? If you don’t know, you’re probably already behind.

2. Define the Role of Digital Marketing

How does digital marketing contribute to the business? This shouldn’t be a laundry list of marketing objectives, but instead a deliberate vision and series of intentional choices that indicates what digital marketing can and should do for the organization.

Ensure that you recognize the relationship digital marketing has with related elements in your ecosystem, which often include: brand, data, marketing, content, CX, UX, CRM, support/customer care, product innovation and media. By simply writing out what is at stake and which opportunities are available, you can quickly clarify your focus. Based on this assessment, you can then develop key performance indicators (KPIs) that clearly communicate to your executive team how digital is impacting the business.

3. Understand Your Target Audiences

Create robust digital profiles (what they want, how they behave, how to engage with them and with whom else they interact), map the customer journey in detail and identify value exchanges all along with it. These profiles often start with traditional segmentation, but you need to go steps further to recognize behaviors, interactions and content, functionality and experience needs.

With many clients, especially in B2B, digital profiles aren’t necessarily built around precisely who the customers are, but rather which objectives the target audience is trying to solve. Goals versus roles. Doing this early on keeps you cognizant of customer needs and allows you to match your objectives to meet them.

4. Take a Multi-Channel Approach

Create a modern channel strategy by taking advantage of and activating key channels like search, web, social and email. Specific platforms and touchpoints may beg for unique ‘channel charters’, identify how to best use them for the brand and the business, and what’s needed internally to pull it off.

• View social as a sales driver, not just a media or customer care channel. How can social be used to meet your business objectives?
• Be clear about search. Can incorporating organic or paid search engine optimization (SEO) help build brand credibility, drive web traffic or fend off competitors?
• Think fresh about web. Is your website positioned to attract, obtain and convert leads?
• Do you nurture former, existing or potential clients effectively using email or marketing automation platforms.

5. Identify the Resources Needed

Use all of the information charted above to determine what you need to execute against this strategy – include headcount, budget and your marketing technology system (platforms, APIs, services and data integration points). As Mayur Gupta of Spotify said, “Technology is the interface of marketing” and “the pipes connecting the different pieces together.”

Governance is crucial – build guidelines and playbooks for people (roles, responsibilities and skills), processes and tools. Many companies don’t pay enough attention to governance, yet it’s needed so people know their role and how they contribute to the success of the program. Plus, if you’re a global or complex organization, you’ll need to establish “market types” to help local leaders see where they are and understand what’s needed to grow in a new direction.

6. Create a Roadmap for Execution

Organize and prioritize initiatives into a roadmap that takes you from strategy to execution, even if it’s paced and phased over six, twelve and 24 months. Don’t be too slow or too cautious, don’t wait for annual planning cycles; be ready and agile with alternative scenarios available. Organizational digital transformation may take time, but marketing should be the nimblest driver and ready to act on available opportunities.

7. Support Your Digital Transformation Strategy

Identify how digital marketing can go beyond doing its day job efficiently and act as a powerful lever in this new era of digital transformation. It could be by using creativity in storytelling, innovating digital services or allowing the customer voice to influence media spend, uncover engagement opportunities and discover new audiences. Embracing digital in your marketing function can serve as a catalyst internally, as your culture becomes more comfortable and emboldened by the opportunities of digital transformation.

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