Manufacturing and other Industrial based companies have historically focused primarily on marketing their products through manufacturers reps and dealers. Recent data forecasts a major shift in how industrial companies plan to implement their B2B business development strategy over the next five years.
What are the Change Drivers?
Sales organizations are reporting 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.
What is the Change in B2B Business Development Strategy?
Industrial companies, fifteen years ago, focused almost entirely on traditional marketing such as trade shows, personal relationships, and print media to support new business development efforts. After a sales person took a potential customer to lunch and gave them a business card, the trip to the website listed on the business card was customary. The content was purely product driven.
According to a study published in Forbes, today’s fast-paced digital world and global competition have eliminated the leisurely business lunch as the primary new business development tool. By 2021 digital marketing expenditures on paid search, display advertising, social media advertising, online video advertising and email marketing will grow to 46% of all advertising spend.
Digital marketing has been widely reported to achieve results at one-third the cost of traditional marketing. Digital is more focused on helping potential customers find solutions to their problems rather than the traditional approach of focusing solely on product data and specs.
Guidelines for Marketing Spend as % of Total Revenue.
The Fuqua School of Business at Duke University, published data on the % spend on marketing by B2B companies. As the trend is shifting toward digital, the actual % of revenue spent is relatively constant in the 7% to 8% of revenue range. For example, if average, a B2B company with $10 million in revenue should be spending $700,000 to $800,000 annually on marketing.
What is your marketing budget as a percentage of your revenue?
Unlike traditional marketing, digital marketing and marketing automation software enables relatively easy ROI feedback on marketing spend. The Duke study forecasts that companies will increase spending on marketing analytics by 375% over the next 3 to 5 years.
Plan your shift toward a Digital B2B Development Strategy.
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 along side your in-house team. 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:
- Marketing strategist and program manager
- Graphic Designer
- Content Creation and management
- Web Developer/Coder
- Search Engine Optimization
- Lead Generation and Sales Team Strategist
- Social Media expertise
Third Party Expertise May be a Good Option
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 help your transition from traditional marketing. Open Path Digital Solutions recommends a focus on developing a Strategic Marketing Plan as the cost effective initial step to identify whether your business and your service or product 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 implementation of a full-scale marketing program including marketing automation, Open Path Digital has what you need to tackle new markets and generate warm sales leads.