Historically, B2B companies have focused primarily on marketing their products through manufacturer’s reps and dealers. In recent years, however, sales reps and marketers have witnessed decreasing returns on these efforts.
Sales organizations report that cold calling, as a tool to drive new business leads, is decreasing dramatically in efficiency.
Decision-makers are too busy to waste time accepting cold calls, and almost any information they need to solve a specific issue is readily available with just a few clicks on Google.
Two decades ago, B2B companies primarily relied on conventional marketing tactics like trade shows, building personal relationships, and print media to attract new business opportunities. Back then, salespeople would treat potential clients to a meal and give them a business card, which directed them to the company's website, usually with product-oriented content.
However, in recent years, the trend has shifted significantly towards digital marketing. According to current statistics, digital marketing spending is predicted to reach $563 billion by 2025, compared to just $120 billion projected in 2017 by Forbes. This spending encompasses various digital marketing strategies, including paid search, display advertising, social media advertising, online video advertising, and email marketing.
Why the shift?
Digital marketing has proven to be more cost-effective than traditional marketing, delivering results at a fraction of the cost. Additionally, digital marketing emphasizes problem-solving rather than just product data and specs, which aligns more with the modern consumer's preferences.
Related Content: Transform Your B2B Company with the Right Business Strategy
According to the latest data from the Fuqua School of Business at Duke University, B2B companies are still allocating a relatively consistent percentage of their total revenue toward marketing, despite the increasing popularity of digital marketing. The current figures show that the average marketing budget for B2B companies is around 11.2% of their total revenue.
Using this benchmark, if a B2B company generates $10 million in annual revenue, it should budget around $1.12 million for marketing expenses. However, it's important to note that these figures may vary depending on the company's specific circumstances, such as its industry, company size, and target audience. Therefore, businesses should carefully evaluate their needs and conduct thorough research to determine the most appropriate marketing budget for their situation.
Based on current statistics, spending on marketing analytics has continued to rise significantly over the past few years, with an increase of over 400% since 2016. This growth can be attributed to the increased utilization of digital marketing and marketing automation software, which allows for easier ROI tracking compared to traditional marketing efforts. As a result, companies can now allocate a higher percentage of their total revenue toward marketing with confidence.
In addition to investing in analytics, building a strong brand and digital presence will require staff and, in many cases, third-party digital marketing services to come alongside your in-house marketing and sales teams.
Many of the skills needed to implement an effective digital strategy are extremely precise approaches, and techniques change rapidly.
Some areas of expertise to consider include:
A third-party service provider with experience in developing and implementing a new digital, B2B business development strategy may be your fastest and most cost-effective approach to helping your company transition from traditional marketing.
Open Path Digital Solutions is a B2B business development agency that recommends a focus on developing a Strategic Marketing Plan as the most cost-effective step to first identifying whether your business and your services or products can benefit from a digital marketing approach.
If your business is a good fit, we can discuss how to move forward. Whether it be only a website redesign or implementing a full-scale marketing program, including marketing automation, Open Path Digital has what you need to tackle new markets and generate warm sales leads.
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Related Article: COVID-19 Shifts Strategic B2B Sales & Marketing Toward Digital
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