How businesses sell software to each other is transforming. For many B2B SaaS companies, gone are the days of six-month deal cycles, massive initial ACVs, predominantly human-led sales motions, and broad customer segmentation.
As markets get saturated, cutting through the noise has become a struggle for both prospects and vendors. Prospects feel bombarded with calls and email sequences. Vendors are frustrated that traditional tactics no longer work.
Add to that the continued trend of decentralized decision making in modern companies (where, instead of buying committees, individuals are making decisions about the tools they will use) and you have an entirely new landscape in which to generate pipeline and revenue growth.
Historically, marketing’s largest footprint in B2B companies has been in demand generation/pipeline generation, with some effort put into brand, customer retention, and expansion. This will be dramatically different in the next 3-5 years.
Specifically, marketing will be given a much bigger platform in the revenue engine. It’s a very exciting time for B2B marketers as they will be expected to do jobs they’ve never done before (e.g. drive product usage and expansion $$$) and do current jobs entirely differently (e.g. lead generation via free users alongside traditional content marketing).
Succeeding in this transformation will require re-learning, unlearning, and re-tooling.
The good news is, there’s a wealth of wisdom within consumer marketing that has been perfected over the last 20 years of digital marketing that is highly relevant here.
It behooves B2B marketers to become students of their sister discipline in consumer.
In the old world of B2B marketing, the Ideal Customer Profile (ICP) is typically defined at the company and buyer persona level. It’s qualitative because there isn’t a lot of rich data or large data available to do any more rigorous definition. The output of ICP exercises ends up being 2-5 super-high-level ICPs like “Director of supply chain at retail companies with 500+ employees”.
Consumer marketers don’t think this way. They think of IUPs—Ideal User Profiles.
Ideal user profiles are determined through quantitative analysis of users and their usage behaviors. Then this data is enriched with demographic/firmographic data. The output is 20+ IUPs with very specific behavioral traits like “Engineers who have 10+ contributors in their service accounts, with an API usage profile of X calls per day, with a spike on weekends.”
Personalization has been a highly successful tactic in consumer marketing and books can be written about its positive impact on user engagement and LTV. TLDR: Every user gets the most personalized message, offer, suggestion for next best action to drive usage. In a world of perfect personalization, we would have segments with single users and every user would get a different set of content/messaging/incentives based on their behaviors.
In most B2B contexts, we’re at the opposite end of this spectrum with segments that are coarse, ill defined, and rarely focus based on usage behaviors. All the “personalization” comes through human interaction with sales and customer success teams.
This approach is not scalable in the new user-centric B2B world instead of “account” or company level messaging. So B2B marketing must embrace micro-segmentation and personalization, and that can’t be done at scale/cost effectively without automation and re-tooling.
In order to define IUPs, micro-segments based on all user data (not only marketing activities but most importantly product usage), and automated micro-targeting with personalized messaging, new tools are required. Doing ad hoc analyses, monthly data dumps of usage data, and manual uploads of user lists into HubSpot just isn’t going to cut it.
The new tools must be able to unify marketing, product usage, sales, and customer support data, surface it in user-friendly ways to build segments, and offer automated workflows to push these segments and relevant usage signals to marketing automation platforms.
Furthermore, marketing automation tools need to revise their pricing and capabilities to support outreach to a larger number of users, more personalized campaigns, and other capabilities that will become expected.
We’re all competing for LinkedIn ads, which is driving CAC through the roof. Guess what: As we transition from ICP to IUP, historically consumer channels like Instagram, Snapchat, and direct mail become a lot more interesting. As work and life flexibly intertwine, so must our approach to reaching our target users. Consumer networks are already delivering personalized content, and B2B marketing has a big opportunity to leverage the platforms in compelling ways.
While most companies put some effort into brand marketing, brand is much less a serious and heavily invested area of focus for B2B marketing than consumer. Now, with the consumerization of B2B revenue engines, brand becomes a key differentiator. I, for one, am very excited for boring and bland blue robotic soulless or kitchy/cutesy B2B brands to be replaced with the richness and diversity that’s common in consumer. This will also change the channel mix in favor of traditionally “consumer” channels.
Consumer marketing is light years ahead of B2B marketing in terms of quantitative rigor and analytics techniques. This is a direct consequence of marketing being the primary revenue engine in the consumer world, along with the volume of activities that comes with consumer tactics. As B2B marketing transitions to being more central in revenue generation and retention, the same pressure will be applied here. So, every B2B marketer needs to level up on understanding their data and using new techniques to get actionable signals from it.
A simple example—consumer marketers understand and use cohorts for nearly every metric. Cohorts are batches of users who started their use of the product at the same time and marketers track their health and life cycle in these batches to assess progression, stickiness, health, and future opportunities to increase LTV. This concept is foreign to most B2B marketers and missing in almost every B2B marketing tool. Yikes.
Marketing will be at the center of the transformation of how software is sold from businesses to businesses. This is an incredibly exciting opportunity for marketers with a growth mindset who love data. It’s going to be tough for those that aren’t data driven.
Want more articles like this? Follow Falkon on LinkedIn.