Why marketers lose influence as B2B brands grow

Customers are obviously essential to business success and, whether business-to-business (B2B) or business-to-consumer (B2C), the process of acquiring and retaining them is undoubtedly the responsibility of the marketing department. In recent times, the focus has fallen on the ideal of ‘customer centricity’, embedding marketing deeper in the heart of business strategy.

However the latest research by Marketing Week, in partnership with B2B agency Omobono, would suggest that as B2B businesses grow, their regard for the power of marketing actually drops. The first part of the research found that overall marketing is seen as important but, delving deeper, there is a worrying trend towards a decrease in marketing influence in larger businesses.

The research segments UK B2B respondents into companies with turnover below £1m, £1m-£9.9m, £10m-£49m, £50m-£499.9m and £500m-plus. It covers a range of marketing issues but asks specifically how marketing is viewed in the organisation, how influential it is, what its priorities are and where the greatest challenges come from.

Getting marketing to be accountable to the wider business has helped us overcome the challenge of influence.

Carl Reader, d&t

In the smallest organisations, marketing is given the highest importance, as 69% find it very important. Marketing’s stock begins to fall with medium-sized enterprises though, as 49% of respondents rate it the same in organisations with turnover of £1m-£9.9m.

In the £10-£49.9m segment, only 40% state marketing is very important and 13% feel it isn’t important, more than double the number of the next smallest category. In the biggest companies, marketing’s importance continues to drop, with only 37% and 30% stating it is very important in the £50m-£499.9m and £500m-plus categories, respectively.

Much of this may be down to the changing nature of B2B marketing, both as a discipline as it has moved into a digital age and also within companies themselves as they evolve.

“I broadly agree with the research,” says Ben Alexander, marketing director at insurance startup Digital Risks. “Marketing’s focus changes significantly as businesses mature. When you’re working in startups, capitalisation and cash flow are king. The fundamental challenge is, can you acquire customers at the right price?”

He adds: “During your first year you’re focusing all the immediate return on investment (ROI) on marketing activities. By year three when you’re well capitalised and willing to change how much you spend on acquiring customers, you begin to look at customer lifetime value instead.”

“Marketing’s function changes over time,” agrees Heidi Birkin, EMEA marketing lead for Deputy.com, an employee management tool used by 60,000 businesses globally. “Our relationships tend to be quite long and involve repeat business. We invest as much in retaining as acquiring.”

READ MORE: Why are marketers still under pressure to prove their value?

Perceptions of marketing

Neither Alexander nor Birkin feel marketing has, in their experience, waned as their businesses have grown, but Alexander can understand why respondents to the survey might indicate the contrary.

“Over time, marketing can be perceived as less important as the business starts investing in new markets, sales processes, partnerships, technology and so on, Alexander warns. “One of the challenges businesses have is they need to stay entrepreneurial but that gets lost over time and if they don’t keep investing in agility and technology, they can get stale. And if all of this isn’t underpinned by understanding what’s important to customers, then ultimately, it will fail.”

Sometimes, the shift away from marketing can come less from a conscious decision to ignore it than from an over-reliance on the sales channel to bring in the money. But immediate sales upticks can sometimes be incompatible with long-term growth, particularly in B2B environments.

Carl Reader, CEO of 60-strong accountancy firm d&t, says: “Accountancy is a long-term business and a typical customer will be with us for 10 years. There’s a conflict between salespeople’s motivations – immediate reward – and the needs of a business with long customer relationships.”  As a result, he says: “We have combined the sales role with relationship management.”

Birkin agrees. “Sales and marketing should work hand in glove,” she insists. “They both have to be really clear about what marketing is delivering against.”

Achieving tangible targets is a bone of contention. Marketers understand the need to quantify their value, but as around half of marketers cite doing so as a challenge even in larger companies, the difficulty of it could partly be behind the survey’s findings that marketers lose influence as companies grow.

In the smallest enterprises, 60% state marketing is very influential and 22% fairly influential, but as companies reach the £10m-£49.9m mark, influence begins to wane. In these companies, 25% say it is very influential and 39% fairly influential, while more than a fifth (21%) say it is not very or not at all influential.

Above £500m turnover, respondents become increasingly lukewarm about marketing’s contribution to business decisions. Only 12% say it is very influential, with a over a third of respondents each stating it is either only fairly influential (38%) or somewhat influential (34%), although only 16% say it is not very or not at all influential.

READ MORE: Meet the $30bn brand trying to ‘consumerise’ B2B

Birkin says: “Marketing’s influence depends on both the business’s objectives as well as the power and impact of the CMO.”

Elaine Roberts, CMO at Lloyd’s Register, agrees, noting that her role was created specifically to take on the marketing challenge at an influential level: “We’d never had a CMO before so marketing was very fragmented. Part of the brief for taking on that role was about being influential in strategy and having the gravitas to operate at senior level.”

Sales and marketing should work hand in glove. They both have to be really clear about what marketing is delivering against.

Heidi Birkin, Deputy.com

At the marketing helm of Lloyd’s Register, Roberts is tasked with bringing one of the most established B2B brands into the 21st century. While its need to introduce the CMO role for the first time might have been an indication of what she was up against, she admits she didn’t fully anticipate the size of the challenge to start with.

“We gained a new CEO in 2015, who realised our strategy needed to evolve. It started with looking at our website – which was shocking – but it opened up a Pandora’s box,” Roberts reveals.

“We were thinking we were looking at a navigational project but we needed a much bigger rebrand – a better tone of voice, repositioning to recognise the 260 years’ heritage but also about being fit for the future.” This involved Roberts bringing agency Rufus Leonard in to help bring the vision to fruition. “Most people don’t know what Lloyd’s Register is, which is germane to why we did the rebrand.”

Getting the message across

It’s clear from the Lloyd’s Register example that large companies can find themselves coasting without the steering influence of senior marketers. It’s therefore frustrating to learn from Marketing Week’s survey that so many feel getting the message across at senior level is one of their biggest challenges.

As marketing influence dwindles, internal buy-in seems to become more and more important to marketers. In the £500m-plus revenue group, 52% state this is one of their biggest priorities, putting it second behind business strategy and well ahead of creative impact (29%) and managing websites (27%), for example.

Meanwhile, 32% of marketers at companies of this size also find internal buy-in to be their greatest challenge, which places it well ahead of all other issues. Even in £10m-£49.9m turnover companies, where marketing is seen as relatively important, internal buy-in is also their biggest challenge.

At d&t, Reader is focused as CEO on using marketing as a key growth driver. “Marketing has to be accountable. Marketing should be at the table. You can’t track every £300 of spend and [attribute winning a specific client to it], but reporting at the bigger-picture level and getting marketing to be accountable to the wider business has helped us overcome the challenge of influence.”