The Decline of B2B Sales and Marketing: Breaking Free from ABM

Summary 

In today's fast-paced business world, many B2B companies are struggling to keep up with changing customer behaviors and digital marketing trends. Traditional sales and marketing strategies, such as cold calling and ABM, are no longer as effective as they once were. In this article, we explore the challenges facing B2B sales and marketing, including the decline of traditional processes and the rise of digital transformation. We also discuss alternative strategies that can help businesses achieve greater exposure and scalability in the digital era, and ultimately, succeed at digital selling.

Contents

1. Introduction
2. The Big Problem with Sales
3. Digital Transformation Challenge
4. Is One-to-One B2B Sales Dying!
5. Account Based Marketing & Experience (ABM/ABX)
6. The Push-Back!
7. Key Takeaways
8. FAQs
9. Conclusion

1. Introduction

I came across four pieces of information/articles that firmly made me realise and solidified our position as being ahead of the curve in terms of new business strategies and understanding the problems between sales and marketing.

The content items I am going to reference are as follows:

1. The Sales & Marketing Expense Ratio by Dave Kellogg – 27^th February 2022
2. Traditional B2B Sales & Marketing are Becoming Obsolete by Brent Adamson – 1^st February 2022
3. The Clear & Complete Guide to Account-Based Experience – By Jon Miller
4. Traditional B2B Sales is Dead, Long Live the UCE? By Dave Kellogg – 6^th March 2022

At salesXchange, we have spent our time deciphering the problems between prospects, marketing, sales and customers, in that order.

We identified that traditional digital sales and marketing was not fit for purpose.  There are lots of reasons why, but I won’t go into any depth here because I’ve explained them in great detail throughout this website, but the encapsulate the problem, too many businesses go bust because they keep doing the same thing over and over and expect a different result.

When you have a picture in your minds-eye, it can be difficult to explain it to others unless you have supporting evidence or documentation.  What happened this weekend was the publication of a few articles that will help you visualise what it is we’ve been saying all along.

2. The Big Problem with Sales

Traditional digital marketing and the plethora of Martech platforms all marketers are expected to use, along with the expectation to include demand and lead generation strategies blended with ABM do not work!

With this constantly on my mind, I read a post on LinkedIn that was recommended by Jon Miller, the CMO of Demandbase and formerly the CEO of Engagio an Account Based Marketing SaaS company and prior to that CMO at Marketo.  I had also read the ABM/ABX playbook Jon had recently published.

The post titled ‘The Sales & Marketing Expense Ratio’, published by Dave Kellogg on 27^th February 2022.

Dave Kellogg identifies that there is an imbalance in the costs attributed to sales and marketing teams because of the ineffectiveness of marketing.

Because of this ongoing failure, Chief Revenue Officers are forced to employ more and more BDRs and or SDRs, thereby increasing the expense of sales vs marketing.  It is now at a 75/25% split.  According to Dave Kellogg, the split should be 50:50. 

Furthermore, Dave has illustrated that the overall cost of sales and marketing (S&M) is reducing every year, yet with a $15m SaaS business growing at 25%, S&M costs around 20%, however, if it’s growing at 75%, the S&M cost rises to 46% of the overall business expenses.

So, here’s the rub; because marketing is consistently failing and cannot get traction through all the MarTech, including ABM (I’ll come on to this in a moment), sales attempts to pick up the slack and the CRO takes on more BDRs and SDRs, thus increasing the cost of sales and forcing an imbalance in the split between sales and marketing, i.e., 75/25.

This situation is further exacerbated by the CMO being made the scapegoat for new business failures, hence the global tenure of CMOs being only 18 months (my comment). Dave goes on to say that the CRO should have the decency to attend the CMO’s leaving party!  

Apart from Dave saying the CMO needs to get the CRO and CFO on side, he doesn’t offer a solution, oh dear – never mind.

3. Digital Transformation Challenge

I want to add this section as part of the roadmap for many businesses, which is Digital Transformation (DT).  I believe this comes about due to the failure of being able to consistently generate new business and maintain a certain level of profitability, so the influencers tell senior players DT is the way forward, to improve operations and possibly include Business Process Management platforms along the way. 

However, as mentioned above, because marketing seems to be in a constant state of failure, sales/CROs step in and employ more staff, forcing up the costs, but without any significant increase in new business.

This keeps happening because most boards of directors are of the opinion that getting new business is cheap and so approve the CROs requests.  It involves cheap telesales and cheap marketing automation software to get leads and when it doesn’t happen, just take on more staff because a 400-1 chance of finding a new prospect via telesales is preferable to entrusting any more budget to marketing.  And the constant churn of CMOs means they’re thought of as ten-a-penny.

What is apparent is the lack of ‘sales and marketing transformation’.   This is where the problem originates.  But the fact that directors, and I’m including myself in this now, believed selling was a piece of cake (and it is) and marketing is as basic as cold calling and saying “do you want to buy this…” it is easy to understand why, on the one hand no one wants to, or even thinks that marketing could be changed or, perish the thought, that the sales people might not be needed.

This is why business owners need to understand the implications of digital selling before a subordinate dismisses it out of hand.  Sales and Marketing Transformation is the long description for digital selling. Perhaps the reason for so many failed DT projects is because the objective was never properly defined in the first place.

It’s a bit like the Pink Panther sketch where Inspector Cluseau says “your dog is biting my leg” and other person says, “it’s not my dog”.

I know large scale DT projects are planned well in advance and require significant sign off.  But if the objective is to streamline the business, make the operations slicker and help customers at whichever touch point they find themselves, what about the experience they had getting to become a customer in the first place. 

If the customers experience was fraught with pestering cold calls and a poor buying experience, then you will never get the customer to become loyal and stay with you if you haven’t got the right attitude from the start. 

And if selling and marketing is mapped out on the back of a cigarette packet, then the outcome, or lack of outcome is no surprise, and the success of DT remains a failure (it’s not my dog!).

4. Is One-to-One B2B Sales Dying?

Is the change starting to happen?  Yesterday, on my Facebook feed, I saw an article published by Harvard Business Review called Traditional B2B Sales & Marketing are Becoming Obsolete written by Brent Adamson – Ex Distinguished Vice President of Gartner and one of their B2B experts.

I simple terms, Brent Adamson stated that traditional digital sales and marketing was failing, and a new strategy needed to be put in place and gave an example of a 1300 person Canadian business in Calgary called SMART, who sold interactive SMART Whiteboards to Schools and businesses.

Before Brent got into what SMART did, he explained how and why businesses were failing to connect with their prospects and highlighted those prospects, people who are exactly like you and I, were happier researching for themselves before getting in touch with, or allowing through, the services of a salesperson.

Brent went on to describe and explain percentages of businesses who preferred digital buying (I say Digital Selling, but I’m not going to split hairs here), the issues that Account-Based Marketing don’t address and what he called a UCE – Unified Commercial Engine – which is what SMART utilised in their business, to break down the typical business structures or silos to better help their prospects and customer along their journeys.

I read Dave and Brent’s articles with immense pleasure and self-satisfaction as I had been working on my B2B strategy for a few years and had recently completed it, ready to present it to the world.  These two articles compounded the fact that I was indeed on the right track and well ahead of the curve, so-to-speak.

5. Account Based Marketing & Experience (ABM/ABX)

Being a person who does not want to be lambasted by anyone for either not researching or publishing an opinion without research, I also read this weekend, The Clear & Complete Guide to Account-Based Experience – By Jon Miller, the CMO of Demandbase.  It had recently been published and so if anyone was going to have a handle on the latest ABM strategies, it was going to be Jon.

I have made no secret throughout my website that I do not believe marketing automation and most MarTech is right for B2B.  It does not work and the reason no one else is banging a drum about it is simply because they have not joined the dots.  However, this will not stop me reading everything I can to make sure I haven’t missed anything!!!

Marketing Automation for new business/demand generation is destructive as it hides content from search engines, behind an email form.  Then, the only way a vendor can connect with a prospect is by telephoning them.

Jon’s publication does not mention the effect the pandemic had on telesales.  Whilst it mentioned not implementing demand generation for every stage of the process, Jon did mention he took a certain amount of pleasure in chastising anyone who sent him a cold email as he wanted to remain anonymous.

Furthermore, Jon believed that video was too expensive for most businesses to adopt in a meaningful way.  He didn’t mention live streaming and podcasting got a mention in one of the diagrams.

One of my pet hates in selling is any kind of under-hand tactic.  Jon confirms that most people, including himself, wanted to remain anonymous.  Yet part of the ABM strategy was to implement reverse IP look-up components, available from Demandbase and others like Lead Forensics and so on, in order to identify the company that has browsed your website, to then hunt down the potential groups of people, through LinkedIn or external databases and to then cold call them or email them.

For me, the final nail in the coffin for ABM was the absolute expectation to adopt a gifting strategy.  We both know offering anything to a prospect at any stage of the negotiating can very quickly lead to prospects expecting there is more to come.  This is why anti-bribery laws exist.

In a nutshell, rather than develop a rounded strategy that caters for the way people want to buy, ABM is an expansion of traditional digital marketing that simply sends out more of the same, hoping for a joined-up result by connecting to all the possible people involved in the decision-making process (Clari Research says for deals of $100k or more, up to 19 people are involved in the purchasing decision).

For me, nothing has changed regarding ABM, even if it is dressed up as ABX.  People have changed over the past thirty years and are quite capable of making decisions for themselves.  B2C strategies focus on people who are buying for themselves. B2B focus on people buying for businesses and as such need to be comfortable about the ROI and keeping their jobs by not making a bad decision, hence their research and not making knee-jerk decisions as with buying a pair of jeans!

6. The Push-Back!

By Sunday night I was felling pretty pleased with myself.  I had read Dave’s Kellblog article, I had my knowledge of Digital Transformation, joined the dots with Brent’s article which confirms marketing is on a downward trajectory.  And finally, Jon Miller’s publication that confirmed nothing had changed with ABM.

And then to my surprise, Dave Kellogg wrote another article, this time seemingly lambasting Brent’s explanation about the decline of the typical sales processes - Traditional B2B Sales is Dead, Long Live the UCE?.  Even though Dave didn’t give an explanation or suggestion as to what these poor marketers are supposed to do except cosy up the CFO and CRO hoping to not get fired in his first article.

So, you can imagine my surprise at such an assassination of Brent’s article, dissecting it paragaph by paragraph.  If Brent was so far off the mark then a simple, no, I disagree would have sufficed…but his penultimate paragraph said it all;  To write 2,200 words and a footnote about a business he exited in 2010 seems a bit over the top to me.  Dave quipped that he trawled through this eight-page article (it would be eight pages if it were copied to word and enlarged to 18 point Calibri!) and it also happened to be 1810 words, unlike Dave's rebuttal of 2,200 words).   

Perhaps Dave has widely promoted his opinion and many are following his advice and Brent’s take on B2B sales and marketing challenges it, I don’t know, you decide.

7. Key Takeaways

1. B2B sales and marketing strategies are evolving rapidly, and traditional approaches are no longer effective. Business owners and CEOs need to be aware of alternative methods to reach potential prospects.

2. The use of MarTech and automation tools can be helpful, but they are not the solution to successful digital selling. A robust strategy that emphasizes genuine customer engagement and minimal human intervention is necessary.

3. Anti-bribery laws and changing customer behaviors mean that underhanded tactics and gifting strategies can lead to negative outcomes for businesses. A focus on genuine customer needs and helping them every step of the way can lead to loyal customers.

4. The importance of exposure and scalability in B2B sales cannot be overstated. Cold-calling, ABM, and marketing automation alone cannot provide the level of exposure that businesses need to reach their full potential.

5. Businesses need to be aware of the statistics surrounding marketing and sales failures and the high rate of business failure in general. A willingness to adapt and explore new approaches is necessary for long-term success.

8. FAQs

What is digital transformation?

Digital transformation refers to the process of using digital technologies to fundamentally change how a business operates and delivers value to customers.

What are some examples of digital transformation?

Examples of digital transformation include implementing cloud computing, adopting artificial intelligence and machine learning, leveraging big data analytics, and incorporating internet of things (IoT) devices.

Why is digital transformation important?

Digital transformation is important because it allows businesses to remain competitive in a rapidly changing digital landscape, improve operational efficiency, and better meet the needs and expectations of customers.

How does digital transformation affect sales and marketing?

Digital transformation affects sales and marketing by enabling businesses to more effectively reach and engage with customers through digital channels, gather and analyze customer data, and automate various sales and marketing processes.

What is account-based marketing (ABM)?

Account-based marketing (ABM) is a targeted marketing approach in which a business focuses on specific accounts or companies, rather than trying to reach a broad audience.

How does ABM fit into a digital transformation strategy?

ABM can be an effective tactic within a digital transformation strategy, as it allows businesses to more precisely target and engage with high-value accounts or customers through digital channels.

What are some common challenges businesses face during digital transformation?

Common challenges businesses face during digital transformation include resistance to change, lack of technological expertise, difficulty integrating new technologies with legacy systems, and data security concerns.

How can businesses overcome these challenges?

Businesses can overcome these challenges by providing training and support to employees, partnering with technology experts or consultants, leveraging cloud-based technologies, and implementing robust cybersecurity measures.

What are some potential benefits of digital transformation for businesses?

Potential benefits of digital transformation for businesses include increased operational efficiency, improved customer engagement and satisfaction, increased agility and flexibility, and greater revenue growth.

How can businesses measure the success of a digital transformation strategy?

Businesses can measure the success of a digital transformation strategy by tracking key performance indicators (KPIs) such as revenue growth, customer satisfaction, employee productivity, and ROI on technology investments.

9. Conclusion

It’s the same as any other issue to do with running a business; If you do what you’ve always done, you’ll get what you’ve always got.  Dave says to not change, he’s done it all before between 2006-2010 and perhaps up to 2019, but the world has been turned on its head since then.  Brent, Gartner’s B2B Expert says B2B sales and marketing is becoming obsolete and proffers an example of a business doing something different in 2022, whose opinion are you going to choose to direct your steps?

Let me help; What does your bank account say, what does your CFO say, how are your sales and marketing teams really doing?  Has anything changed over the past few years that would indicate that things are going south? 

The average turnover per person per annum or annual recurring revenue, full-time-equivilent (ARR-FTE) is between £80k-£140k for SaaS businesses turning over up to $50m.  If your ratio is higher, good for you.  If you want or need more business, then you might need to change! These figures are from the British Institute for Statistics, GP Bullhound and SaaS Capital.

Again, in the UK, 20% of all businesses go bust in the first year.  30% in the second and 50% by the third year, and finally 91% by the tenth year.  Of businesses who have received investment, 40% fail completely, 75% fail to achieve their own targets and 95% fail to achieve an ROI for the investors.  These figures are from the Harvard Business Review and The Financial Times and Sifted.

Cold calling is a 400-1 shot, CMOs are being replaced every eighteen months, CB Insights say that 50% of the reason for business failures are marketing related and Forrester say that less than 1% of prospects that traverse the so-called funnel (irrespectively of recycling marketing qualified leads MQLs) actually become revenue generating customers.

If you want to experience any sort of change, you’ll have to do something about it.  MarTech is not the answer. Any sort of one-to-one selling is ultimately destined to fail because a business cannot get sufficient exposure to a total addressable market and whittle it down to those who are looking.

Every business needs a level of exposure and scalability that cold-calling, marketing automation and ABM can never provide.  It has proven to fail year after year, yet business owners are seemingly forced into adopting all the big tech MarTech advice and strategies because, guess what, everyone else uses it, so how can they all be wrong?  Easy, look at the statistics.

I’m not saying every business owner or CEO is a cheap-skate and opts for the cheapest route to market, but I believe CEOs are not being made aware of any alternative method by CMOs or CROs and so they do what they’ve always done and keep getting what they’ve always got.

Fortunately, we have spent a great deal of time and research developing a robust strategy for B2Bs that is low cost, has jaw-dropping exposure and channels business efforts to succeed at digital selling with the least ‘human’ intervention possible. 

Naturally it will not eradicate people completely from the process, but it will demonstrate to prospects your intention to help them every step of the way which leads on to them becoming loyal customers.

Our strategies and processes are available to learn on our website, with no access restrictions.  We practice what we preach, you can do-it-yourself or call us in to help fast-track digital selling within your business and helping your team along the way.

Current strategies do not work.  Marketing technologies are not to be viewed as the golden goose and golden eggs.  Getting it right is about attitude towards prospects and customers.  It's not about budget either as explained throughout our website, it costs pennies. Using the right type of technology is essential and genuine, entrepreneurial creativity will always prevail.