Secrets Of The 30%: 5 Rules To Turn B2B Marketing And Sales Into A Growth Engine
If you knew that you had a 70 percent chance of failure before starting something, would you still go ahead and do it? Those are the odds B2B leaders in marketing and sales (M&S) face when they embark on a transformation effort, and they underscore why attempts to raise brand visibility, customer satisfaction, and sales often flounder.
That’s a big problem because an effective M&S transformation drives significant growth. We’ve seen companies increase their operating income by as much as 10 times the cost of the transformation program in its first year.
grow the top line or when the company finds it needs to switch to a new business model to keep up with changes in the industry or with its customers. These transformations need to focus on increasing ROI for the company, improving organic growth, or out-executing competition.
One steel processing company, for example, overhauled its M&S function to stop a steady deterioration of margins. It reorganized the sales organization and built account management, prospecting, and customer segmentation skills across the entire company. The result? Product profitability increased by almost 50 percent within one year, and the company outperformed its peers for the next three years.
The 70% – why they fail
Our survey of 2,300 executives unearthed three key reasons why M&S transformations fail:
No love. Marketing often does not have a seat at the executive table because of a perceived lack of bottom line impact. This issue makes it hard for marketing to get the kind of support from other departments that it needs for the transformation to work.
No discipline. All change efforts take time, but M&S programs take even longer because they tend to be more complex and require more cross-functional cooperation. “Get-it-done-yesterday” pressures undermine the discipline and patience required to see big changes through.
No muscle. Our survey found that 75 percent of companies lack people in M&S groups who are skilled in change leadership.
Joining the 30 percent
So how can you make sure that your company is among the 30 percent that succeed? Here are the five things you need to do:
1. Hold yourself and others accountable. Our survey found that this aspect was the most important influencing skill in up to 52 percent of successful transformations. Leaders need not only to model activities and report results for which they’re responsible, but also to identify issues that slow down the change process. One European telecom company, for example, was trying to improve its customer experience to help avoid churn. The head of sales asked that 25 percent of his variable pay and that of his direct reports be determined by the company’s success in delivering a great customer experience. That accountability sent an unambiguous signal to the organization about how important the transformation was.
2. Reach out across the organization. M&S leaders can’t do it on their own. The IT department, for example, can help develop relevant analytics; product development can work to increase customer satisfaction. While the CEO must encourage cross-departmental collaboration, our data make it clear that ultimately it’s up to M&S leaders themselves. We recommend holding regular “marketing summits” with members from relevant departments to discuss progress and concerns. Make sure that everyone understands their individual and team role in the transformation, and is responsible for specific assignments.
3. Monitor project performance AND health. It’s critical to focus on performance during a transformation, of course, but 63 percent of successful M&S transformations balance team health with performance. Morale can flag and transformations run out of steam, especially when it can take more than a quarter or two to put numbers on the books. So it’s crucial to have a balanced scorecard that measures both performance (e.g. How have we generated more revenue?) and health (e.g. Are people building their capabilities?) to track how everyone involved is doing. When signs of flagging surface, you need intervene quickly with more training, for example, or better progress communications.
4. CEO: Step up and step in. Yes, change starts at the top. But for an M&S transformation, the CEO has to really step up to make it happen because M&S often lacks the support across the organization. We’ve seen two areas where the CEO can really help: i) being intimately involved in both planning and process. For example, the CEO of one industrial company demanded the project have discrete, measurable, carefully-sequenced initiatives so that sales could “ring the cash register” quickly to win over skeptics within the organization; ii). acting as a “Communicator-in-Chief.” The CEO/ needs to use simple, clear language to inform the organization about goals, successes, and progress. This is much more than sending the occasional email. CEOs need to consider, for example, regular internal webcasts, internal blogging, and visiting local offices to talk with leadership and employees.
5. Promote trickle-down leadership. More than 60 percent of our survey respondents said that having committed change leaders across the organization was ‘extremely important’ to the transformation effort. Companies that succeed install strong change leaders who lead by example, help people maintain their energy and focus, and constantly measure progress. They also celebrate wins, evangelize the transformation, and reward and promote people who successfully build new capabilities.
While these five lessons are critical to make an M&S transformation succeed, the actual design of the program has must take into account specific needs of the company, such as short-term financial impact. With customer behaviors and technologies changing rapidly, M&S transformation is not so much a choice as a necessity. When done well, it can drive significant growth.