Why Traditional B2B Digital Marketing Fails: A New Strategy for 2024

Contents

1. Executive Summary
2. The Pitfalls of Conventional Digital Marketing in B2B
   • The B2B Failure Statistics
   • The Resources Drain
   • A Skills Mismatch
3. A Call for a New Direction
   • Selling at Scale: The Untapped Potential
   • Business Outcomes vs Business Revenues
4. Conclusion: Ebracing Change for B2B Success
5. Next Steps: Your Path to Digital Mastery
6. Sources:

Executive Summary

In the rapidly evolving digital landscape, B2B businesses are grappling with the effectiveness of their marketing strategies. This article challenges the status quo, arguing that traditional digital marketing and MarTech solutions, designed primarily for B2C businesses, are failing to deliver results in the B2B sector.

I firmly state a radical rethinking of strategies, urging SaaS & PaaS CEOs, business owners and CROs to consider a new approach that aligns more closely with the unique needs and dynamics of B2B sales. I strongly suggest that a change in strategy and direction is necessary for the future success of SaaS & PaaS businesses.

Key points include:

1. Ineffectiveness of Digital Marketing in B2B: Digital marketing has never worked effectively in B2B sales. The MarTech industry and marketers have failed to deliver on their promises, leading to wasted resources and ineffective strategies.
2. Misleading Case Studies: Many case studies for marketing technology claim to be successful in B2B sales, but the businesses they mention are often B2C.
3. Wasted Resources: Businesses are wasting significant resources on MarTech. They are using a large number of tools and not fully utilising their capabilities.
4. Skills Mismatch: There is a growing skills gap in the industry, with the number of MarTech platforms and software growing exponentially.
5. Ineffective Strategies: Tactics like reverse IP look-up and offering gifts to prospects are seen as ineffective and potentially damaging to the business's reputation.
6. Misuse of Budget: Significant portions of the marketing budget are being wasted on ineffective strategies and technologies.
7. Lack of ROI: Digital marketing strategies cannot prove an ROI which is then blamed on sales for poor performance.
8. Need for Change: Businesses need to change their strategies and potentially the leadership of their marketing teams to become more profitable.
9. New Strategy: That involves selling at scale to the total addressable market, using technically aware and outgoing salespeople.

The Pitfalls of Conventional Digital Marketing in B2B

Everyone in B2B sales knows digital marketing does not work.  It never has.  The big problem is no one wants to openly admit it because it exposes individuals who have refused to analyse a process that does not work, and have failed to seek an alternative, which is an essential part of running a department or business.

This problem was instigated by the MarTech industry and marketers.  If you look carefully at most of the case studies for marketing technology, they all profess to sell B2B, but most of the businesses they mention sell to consumers, i.e., banks, insurance, cars, and multi-billion retail ‘genius’ brands.  They’re all big businesses but are not strictly B2B organisations.

New business generation for B2B organisations is the most difficult nut-to-crack because no one has worked out an effortless go-to-market strategy, if they had we’d all be doing it.

Instead, the snake-oil marketers promised the earth and failed to deliver.  And luckily for them, as no alternative was forthcoming, they continued to peddle their technology, persuading business owners to install layer upon layer of SaaS to try and ‘make it work’ even though the digital marketing strategies were designed for and worked successfully for businesses selling to consumers.

Any business owner trying to get the right advice will pay handsomely for using the services of Gartner, Sirius Decisions or Forrester. However, B2Bs need to have their radar active to work out which businesses are B2C and who the consultancy process really benefits. 

Vendors on the other hand who want to appear on the Gartner Quadrant will also pay many thousands to be included in the MarTech ‘club’, which demonstrates it is pay-to-play and not unbiased recommendations.

But here’s the ‘rub’; business owners (B2B) seek advice from large consultancies.  These large organisations proffer strategies that incorporate marketing technology, promoting the platforms on their respective quadrants, for which they’re being paid many thousands by the MarTech manufacturers.  However, those same consultancies also providing advice about B2B sales and buyer behaviour show that the correlation, and effectiveness of marketing technology, is poles apart.

Technology and SaaS businesses cannot pay thousands to appear on a quadrant with their own products, then simply ignore the same consultancies when it comes to sales effectiveness statements.

The B2B Failure Statistics

That said, here are some of the most significant anti-B2B Marketing statistics freely available from Gartner and other authoritative sources.  The failure statistics below are painful to read.

To get a feel for how businesses are really doing, we must look at their respective success rates for both self-funded and invested companies as well as the performance relating to turnover per employee and tenure: -

• Every year in the UK, approx. 700k business start-up and 500k go bust ^[1]
• 90% of business will fail within the first three years ^[2]
• 30% of businesses fail in the first year ^[3]
• 50% of businesses fail by the second year ^[3]
• 70% of businesses fail by the third year ^[3]
• 91% of businesses fail by the 10th year – The sum of the above!
• 40% of Invested Business Fail ^[4]
• 80% of Invested Business Fail to achieve their own targets ^[4]
• 95% of Invested business Fail to achieve an ROI for Investors ^[4]
• 50% of all business’s failure reasons, are marketing related ^[5]
• 1 in 300 Cold call success rates ^[6]
• £100k turnover per person per annum is the average ^[7]
• Average tenure of CMOs in UK & USA is 18 months ^[8]

The Resources Drain

Of the Gartner described ‘genius’ brands, the highest digital marketing performance levels were achieved by utilising 73 different marketing tools, whereas the average company uses 37 different tools ^[9].  Gartner do not however define what constitutes ‘high digital marketing performance’?

Gartner say businesses who use 70% of their MarTech capability in 2022 will achieve 20% ‘better’ ROI than their peers ^[10], yet this contradicts that buyers increasingly want to remain anonymous ^[11], therefore rendering more usage irrelevant.

It seems Gartner are helping the MarTech companies double-down and want to encourage B2Bs to use more SaaS and more capacity, even though they have also stated B2B buyers will not engage with the technology.

More concerning is CMOs confirm they only used 42% of their MarTech’s capability in 2022, down from 58% in 2020 ^[12], making the above incongruent with driving a B2B forward.  this alone confirms a significant drain on resources

A Skills Gap Mismatch

Most businesses are unable to confidently define their complete marketing eco-system as best-of-breed technology is not available from one single vendor, but many, making the selection of multiple providers an unwanted, but necessary, activity.

Gartner, Marketing Week and Forbes magazine highlight the growing skills gap ^[13], which is unsurprising considering that MarTech platforms and software has grown from 150 products in 2008 to 11,500 in 2023 ^[14].  Naturally it has become more difficult to find staff who know the 40-70 MarTech platforms when recruiting.

Whilst there is clearly a skills mismatch, both Gartner and McKinsey are very much aware of the sentiment brewing with B2Bs.  As you can see from their responses below, the expectations of vendors are clear, but vendors have not, to date, embraced them: -

• 83% Research digitally before engaging with a salesman ^[15]
• 76% prefer video to phone ^[16]
• 89% believe in sustainable digital GTM Strategy ^[17]
• 41% want more video conferencing ^[18]
• 23% want more online CHAT ^[19]

A Call for a New Direction

Selling at Scale: The Untapped Potential

Very few CEOs have ever heard of selling at scale as an actual strategy, rather it's simply wishful thinking directed at their sales people.

In 2022, marketing accounted for 9.5% of the annual budget ^[20], marketing technology i.e., MarTech, accounted for 25.4% of the entire marketing budget ^[21]

Most businesses are aware of the marketing funnel illustration to visualise the journey of a prospect to become a customer, however, according to Forrester less than 1% of businesses who traverse the 'funnel' create revenue. ^[22] 

B2B vendor 6Sense.com stated in 2014, that 97% of B2Bs ‘hate’ completing email forms for content ^[23]. 

Putting this into perspective, using pay-per-click on Google or LinkedIn for demand generation and lead generation means 97% of the total budget is wasted, as all banners link to landing pages with lead capture forms integrated to marketing automation platforms (MAPs).

In a recent survey conducted by 6sense Research, respondents reported that on average, only 3.5% of their web visitors filled out forms.

This number is consistent with findings from other researchers:

• Digital marketing software provider Unbounce found that the median conversion to form-fill rates among their customers was 3%
• As far back as 2014, search engine news website Searchengineland.com reported similar rates, and was still finding a 3% to 5% form-fill rate as of 2022
• Digital marketing technology provider Wordstream studied Google ads customers and found a unique visitor to form-fill rate of 2.4%
• (While Wordstream notes that some organisations experience much higher conversion rates, the median conversion rate cited remains at 3%.)

Furthermore, whilst personalisation is currently a popular subject and strategy, by 2025, 80% of marketers who have invested in it will abandon their efforts due to a lack of ROI, the perils of customer data management, or both. ^[24]  

Business buyers are motivated by an ROI for their business and are not driven by an emotional response to a purchase.  This indicates an increased reduction of tech usage and wasted budget for personalisation tech. 

With the above in mind, marketers have adopted a variety of practices to trap buyers, the first of which is reverse IP look-up.  This software matches the IP address against external data to identify the company.  Secondly, it cross-references IP data obtained via consumer transactions to identify a web browser and then notifies a BDR or telesales agent of the match for them to contact the browser - a practice virtually every B2B recipient hates. ^[25]

The next tactic is when businesses attempt to ingratiate themselves with new prospects by offering gifts.  This very dubious approach at the very least makes the vendor look cheap and/or desperate but also has the potential to expose the buyer and the seller to other illegal activities! ^[26]

There is no end of excuses or justification for more SaaS or associated services, however, the underlying metric must be the ROI based upon honourable engagement.

The bottom line; businesses need to ensure their strategies create more leads than they have salespeople.  The ratios of marketing to salespeople needs to be reevaluated.  It makes no sense to have a large marketing team and yet fail to keep every saleperson rushed off their feet.

Our strategies for selling at scale are unlike any other marketing or new business development organisation in the world - this should not be the case.  every business should be embracing new strategies and methods to generate new business as it is the life-blood of every organisation.

Business Outcomes vs Business Revenues

Gartner evidence refers to a proprietary ranking methodology for digital performance, evaluating companies against four key dimensions of digital competency.  A selection of data points that feed into these dimensions include:

1. Website: site technology, traffic and web authority, search and navigation, guided selling and content, customer service, loyalty, mobile apps
2. Digital marketing channels: Google Search, web advertising (static and video), email marketing
3. Social media: Impressions, engagement, and community size on Facebook, YouTube, Instagram, and Twitter
4. Path to purchase: E-commerce links, store locator and drive to store, account management, product pages ^[27]

The above metrics are focused on B2C and consumer engagement, not B2B, hence LinkedIn not being a data point.

Unfortunately referencing Gartner for B2B Marketing Technology has become increasingly difficult because they seem to be moving towards referencing B2C focused companies rather than B2B. 

In Gartner’s report ‘The State of Marketing Budget & Strategy in 2023’ it says, CMOs must identify the most relevant multichannel KPIs that clearly connect to business outcomes. ^[28] 

Personally, I believe that the expression “business outcomes” should not have been used.  This is what has caused the problems in the first place.  CMOs have focused on outcomes and not revenue, which has enabled them to point the finger at sales for not performing, whilst not have equal revenue targets. 

Former Senior VP of Gartner, Brent Adamson wrote in his penultimate Gartner article for Harvard Business Review, that business marketing technology did not work for B2Bs, who instead needed to become open access providers of educational information upon which buyers could make informed decisions and buy digitally.  He had seen this work successfully in certain businesses the USA. ^[29]

In addition, Account Based Marketing (ABM) strategies and all the integrated technology available does not make any difference for B2B buyers.  According to Demandbase nearly 100% of buyers want to self-educate, up from 87% in 2021^[30] and according to Gartner 72% of buyers would prefer a seller-free experience. ^[31]

Finally, vendors underestimate the extent to which buyers already have made their decisions prior to engaging with a sales rep as buyers have a strong preference for digital sources, while vendors overstate the importance of in-person forums ^[32]

Conclusion: Embracing Change for B2B Success

It appears to me that Gartner et al are siding with the MarTech vendors to sell, what seems to be, increasingly indefensible technology to B2Bs!  However, it is not the buyers who pay Gartner, it is the vendors who want to appear on the Gartner Quadrants. So, Caveat Emptor!

Businesses have been forced down a path by marketing technology providers, that promised effortless business opportunities and more revenue.  After twenty years this has been proven not to be the case, especially for the B2B market sector.

No amount of technology can replace the logic of a business owner wanting to identify and learn about whether a new product will make their business more money.

This is the state-of-play: -

• Marketing is demanding approximately 10% of the total company budget
• MarTech is costing 27% of the total marketing budget
• Budget is funding up to 70 different digital technologies
• Only 40% of the software capability is being used
• 97% of pay per click budget is being wasted
• Less than 1% of prospects traversing the funnel make you any money
• Most activities are for demand generation

I believe marketers are misleading B2B boards of directors by refusing to research more effective ways of generating new business.  Until now they have simply told CEOs, “If you want more sales, you need more technology.”  A claim that is supported, and yet contradicted, by Gartner, as it cannot be financially proven for B2Bs.

Now you know the statistics surrounding digital marketing and its failure to succeed within B2B markets, what you do with this information will determine the future of your business.

In many cases making a change in strategy and direction can be a daunting process; however, in this case, it is more akin to ceasing a set of activities that are damaging the business, in favour of activities everyone involved wants to be part of.  It is very different.

To turn your business around and become more profitable, you may also need to be prepared to address the leadership and attitude of your marketing team in order to find a better solution. 

Next Steps: you Path to Digital Mastery

Your new strategy needs to engage, connect, and sell at scale to your total addressable market, without prohibitive costs, using people who are technically aware, gregarious, and able to entertain your audience, i.e., your salespeople.

Over the past ten years we have analysed, researched, and tested every B2B new business development approach and have developed a strategy that will change the trajectory of your business. 

Read this follow up article called: - Unveiling the B2B Blindspot: Learn Why CEOs & Investors Must Rethink Their Strategies

• Read online or Download PDF: - How to Master B2B Growth Through Digital Selling

If you prefer to contact me direct to talk about my research and findings or to see what the possibilities could be for your business, please call 07547 187383 or email This email address is being protected from spambots. You need JavaScript enabled to view it.  

Sources:

1. Business Start-up & Failure Rate – Companies House - https://www.gov.uk/government/statistics/companies-register-activities-statistical-release-2021-to-2022/companies-register-activities-2021-to-2022
2. 9/10 Business Fail in First Year – Sifted / Financial Times https://sifted.eu/articles/startup-van-garage-members-club
3. 30%, 50%, 70% Will Fail in 1^st, 2^nd, 3^rd Year – Fundera.com - https://www.fundera.com/blog/what-percentage-of-small-businesses-fail
4. Of Invested companies, 40% will fail, 75% will fail to achieve own targets, 95% fail to achieve ROI for investors – Harvard Business Review - https://hbswk.hbs.edu/item/why-companies-failand-how-their-founders-can-bounce-back
5. Top 20 Reasons Why start-ups Fail – CB Insights - https://www.cbinsights.com/research/report/startup-failure-reasons-top/
6. Cold Calling Statistics – 100 names x 8 calls to connect x 5 calls to convert from prospect to lead = 100 x 13 calls = 1300 calls / 2 warm leads =, 650 calls to one interested party - Cognism - https://www.cognism.com/blog/cold-calling-success-rates
7. Average turnover per employee per annum – Business Population Estimates BEIS - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1106039/2022_Business_Population_Estimates_for_the_UK_and_regions_Statistical_Release.pdf
8. Tenure of CMOs

• 2016 Marketing Week - https://www.marketingweek.com/why-cmo-tenure-is-falling/
• 2017 Mediatel - 2017/03/27/taking-the-short-term-view-has-consequences/
• 2018 Adage - https://adage.com/article/cmo-strategy/cmo-tenures-grow-longer-study/315994
• 2019 Campaign Live https://www.campaignlive.co.uk/article/future-cmo-certain-death-rebirth/1582585
• 2020 Seth Godin on YouTube London Live - https://youtu.be/bHubyKHmP-U
• 2021 Forbes – Nine month - https://www.forbes.com/sites/ericaseidel/2020/08/18/why-cmos-of-growth-stage-companies-can-have-short-tenures/?sh=7a4d807e6257
• 2022 Forbes – Nine months - https://www.forbes.com/sites/ericaseidel/2020/08/18/why-cmos-of-growth-stage-companies-can-have-short-tenures/?sh=7a4d807e6257

9. B2Bs using 73 different tools - Gartner Marketing Vendor Essentials Guide 2022 - https://www.gartner.com/en/documents/3992783
10. Using 70% of capability to increase marketing ROI - Marketing Technology Drivers of Genius Brand Performance - https://www.gartner.com/en/marketing/research/marketing-technology-drivers-of-genius-brand-performance
11. LinkedIn states 75% of B2B buyers want to remain anonymous - https://business.linkedin.com/marketing-solutions/technology-marketing/tech-insights/the-tech-buying-revolution-will-be-anonymous
12. Gartner Survey Finds Marketers Utilize Just 42% of Their MarTech Stack Capabilities - https://www.gartner.com/en/newsroom/press-releases/2022-10-03-gartner-survey-finds-marketers-utilize-just-42-percent-of-their-martech-stack-capabilities
13. Skills Gap

• https://www.forbes.com/sites/tomokoyokoi/2022/03/18/filling-digital-marketings-skills-gap/?sh=129edffa3d0f
• https://www.marketingweek.com/marketings-digital-skills-proficiency-declines/

14. Marketing technology platforms increase from 150 – 11,500 - https://chiefmartec.com/2023/05/2023-marketing-technology-landscape-supergraphic-11038-solutions-searchable-on-martechmap-com/
15. 83% research digitally before engaging with sales - https://www.gartner.com/en/newsroom/press-releases/2022-06-22-gartner-sales-survey-finbds-b2b-buyers-prefer-ordering-paying-through--digital-commerce
16. 76% prefer video to phone - https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/b2b-sales-omnichannel-everywhere-every-time
17. 89% believe in sustainable digital GTM – Gartner - https://www.gartner.com/en/newsroom/press-releases/2022-10-19-gartner-says-89-percent-of-board-directors-say-digital-is-embedded-in-all-business-growth-strategies
18. 41% of buyers want more videoconferencing - https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/these-eight-charts-show-how-covid-19-has-changed-b2b-sales-forever
19. 23% buyers want more online Chat - https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/these-eight-charts-show-how-covid-19-has-changed-b2b-sales-forever
20. Marketing budget 2022 - https://www.gartner.com/en/newsroom/press-releases/gartner-survey-reveals-marketing-budgets-have-increased-to-9-5--
21. Marketing Technology budget 2022 - https://www.marketingcharts.com/business-of-marketing/marketing-budgets-226083
22. Less than 1% of prospects through funnel become revenue - https://www.inc.com/sangram-vajre/forget-about-leads-this-is-what-you-need-to-focus-on-to-boost-sales.html
23. 97% of businesses hate filling online forms - https://6sense.com/blog/only-3-of-web-visitors-fill-out-on-site-forms-heres-how-the-other-97-can-reveal-where-your-next-deals-are/
24. 80% B2B will abandon personalisation - https://www.forbes.com/sites/forbescommunicationscouncil/2021/08/20/stop-the-roi-obsession-why-marketers-should-measure-return-on-objectives-for-strategic-initiatives/?sh=78a51a98546a
25. Reverse IP Look Up & Consumer Data - https://www.cognism.com/blog/bombora-intent-data-press-release
26. Gifting - https://reachdesk.com/
27. Gartner focusing on B2C - Gartner Marketing Vendor Essentials Guide 2022 - https://www.gartner.com/en/documents/3992783
28. The State of Marketing Budget & Strategy in 2023 - https://emt.gartnerweb.com/ngw/globalassets/en/marketing/documents/state-of-marketing-budget-and-strategy-2023.pdf
29. Ex VP Gartner - Brent Adamson Article - https://hbr.org/2022/02/traditional-b2b-sales-and-marketing-are-becoming-obsolete
30. Almost 100% of buyers want to self-serve, up from 87% in 2021 - https://www.demandbase.com/blog/the-rise-of-the-self-serve-buyer/
31. Buyers want a sell-free experience - https://www.gartner.com/en/newsroom/press-releases/gartner-says-b2b-sales-organizations-need-to-give-customers-a-se
32. Vendors underestimate the extent to which buyers have already made a decision and overstate the importance of in-person forums - https://www.bain.com/insights/virtual-selling-has-become-simply-selling/