Transcript
What is up, everyone? I’m Stuart P. Turner, this is the Flow State podcast. I want to thank whatever deity or spirit animal is your preference—it’s finally stopped raining in New South Wales after what feels like a biblical proportions amount of water has fallen on us all. I’m just happy to be dry and that it’s Friday. It is just me today, so you know, look, that’s what you’ve got. Sorry, not sorry, there you go.
What I thought I would do today is have a little chat through a few things that are coming up in some market research we are running now. If you are one of my recent new friends from our outreach, you may be familiar with some of the things I’m about to talk through. If you have not heard my recent ramblings about what we’re trying to dig into in Flow State and where the business is going, let today be your exciting introduction to that topic, I guess. So, without further ado, since jumping ship from B2C into B2B—what I believe was around maybe even eight years ago now—one thing has continued to surprise me.
I think the biggest difference between the two disciplines is the sort of misalignment gap, or playful differences in opinion if you like, between marketing and sales functions in B2B brands. As you well know, if you are familiar with both sides of the fence in B2C land, often more often than not, there is no sales function. There’s no separate sort of marketing function even; marketing effectively does the entire job. Obviously, that’s quite easy if you’re selling something that people need, like, you know, shoes or socks or whatever, right? The job is not that hard; you’re just in a shit fight with everyone else who’s trying to push shoes in your face. If you’re selling a more considered purchase, the process is very similar, but again, marketing does kind of the whole job, right? It’s marketing and sales, it’s not just marketing. However, as I discovered when I moved over to B2B land, that’s different on the other side.
Marketing does a very different job to sales in B2B. In the spaces that we operate in, which are typically with brands that are selling very complex products that are not just a pick up and have a go type solution, the process is long, a lot of people are involved, you know, the journey is a long one. That was a real eye opener for me because it’s been a lot of fun, but it’s also been the source of a fair bit of frustration, which I feel like a lot of people in those roles also share, whether you love or hate your friends that you stare at on the opposite sides of the office or wherever you are.
So, what I wanted to dig into today, and the reason for that little recap, is we are conducting some market research at present, my friends and I at Flow State. We read the same stuff that everybody else is reading that comes out from the big consultancies—our friends at McKinsey, Gartner, those types of people. We’re getting the top-level stuff that’s happening across the market. We obviously know that’s validated because a lot of that is produced from interviews and real interactions with people in roles in the companies that are dealing with them. What we’re keen to do right now is kind of pull that down to our specific relationships here in Australia and across APAC with our particular client base and flavor of brand that we’re trying to work with. We want to join those things together because it’s very useful to know that there are these big top-level challenges. Obviously, we’ve been talking about that quite a lot on the podcast, like the big issues that are looming over us all the time, just waiting to drop the hammer on you. But most of us are like, “Okay great, well that’s fun to think about, but what does that mean in like my specific day-to-day job?”. As you will know if you know me or have listened to me in the past, I’m a practically minded guy when it suits.
Today, I want to dig into the practical side. In a few recent conversations, two things keep cropping up, and what I want to sort of zoom in on is these two fundamental errors that I continue to have conversations about. I continue to find this very interesting just talking to people in their different experiences and interpretations of these things that are limiting the growth potential of B2B brands specifically. Where we’re dealing with this, we’ve done some of our own research in the other business, Catalysis, on this. There is a huge global problem here, and again, I just want to zoom in on the sort of the local aspects of that in the damage that these two issues are doing to growth potential. There’s like trillions of dollars going down the toilet or being left on the table because of the impact of these issues.
That’s what I want to talk about today. What keeps coming up, and what led me to this point, is that in these recent conversations I’ve been having, and even conversations with the team as we’ve been rebuilding our outreach campaigns to sort of bring some more people into our research, there are three subjects that people still love to talk about.
- Attribution. Going back to my time in B2C, I spent a lot of time chasing the attribution dragon, I’m sure that you have as well in one form or another. Marketing people and digital people love this; it’s like catnip for them for some reason. Now I’ve gone full circle on attribution; I think it’s a total waste of time now because I think whatever model you choose just tells you what you already know after a huge amount of time, effort, and investment. I’m happy to be challenged on that, but from my own experience trying to deploy attribution models, they’re great, they produce a lot of interesting stuff, but they didn’t ever tell me anything that I couldn’t have just off the cuff told you from a brand I was working with or a business I was in. The reason I wanted to talk about attribution is because I think it essentially distracts everyone from the core, more useful objective or goal of actually trying to define impact on revenue or commercial outcomes in a business. That doesn’t require a huge attribution model; it just requires some sensible thinking and an agreed measurement framework that doesn’t need an all-singing, all-dancing, huge attribution thing and data people and charts and blah blah blah. That was number one, because I’m still talking about that now, and people are still either dealing with it or they’re still talking about it, or some people are just starting the journey—good luck to you if you are, you’ll come around to my way of thinking eventually.
- Misalignment between sales and marketing. Yes, it’s still there, yes, it’s still happening. What I’ve come to realize from my voyaging into the deep seas of B2B is that I’ve predominantly worked with marketing people over the course of my time. It’s only over the past kind of four years with Flow State and the few preceding that that I’ve started to do a lot more hands-on work with people in sales functions. Weirdly, everyone’s aimed in the same direction—everyone’s trying to make money for the company they work for. But often, it’s not the fault of the people in these teams; it’s the fault of the fundamental structure of a company that the two functions are set at loggerheads because their objectives and structure and remuneration and everything is just fundamentally not aligned. That is obviously stupid, and that is the fault of the C-suite, I would say, and how they’re structuring the business. I’m not saying that’s happening everywhere, but I still see people talk about that. If you talk to a salesperson, they’ll be like, “Marketing are doing loads of stuff, they’re telling us they’re generating a billion impressions and people are clicking stuff and whatever, but they’re like, how does that relate to me in my job? Like, it doesn’t, like at all”. The stuff that they do and need is so different and so far away, and that is not at all to say that marketing is not doing an effective job, it’s just that the understanding of the connection is not there. Marketing, equally, if you’re on the other side of the fence, will be like, “Well, you know, sales people are just mysteriously generating all their own leads, they’re claiming all the credit, you know, like they’re building off-brand assets—what are you doing, salespeople?”. That conversation is still going on; it was happening when I first started in B2B, and it’s still happening now.
- The third thing is that winning—and in like Winning Friends and Influencing People (shout out to Dale Carnegie)—is what still wins in businesses. What I keep hearing from people that I’m talking to, both on this show and in the market research discussions I’ve been having, is that when you step outside of highfalutin and/or big chunky projects like attribution, or you step outside of your on-paper function as a marketer or a salesperson, people are actually just making friends with each other. They’re actually talking to each other about what they need in their day-to-day jobs, they’re getting that done. In the brands that I’m talking to that are doing this successfully, that’s where just human stuff is delivering the goods basically. This has been a recurring theme in our discussions about AI and the implications of AI: that this current obsession with the tools and process diminishes our human instincts and impact on what essentially in these two functions is a very human-centered job. If you just know how to do your job and you do it well, and you ignore all the bullshit, you can still do a great job, and that is still really valuable, and there’s no way tools are going to replace that.
Those three areas just brought all this to a head. I’m going to run through the two issues I want to talk about today.
I know what you’re thinking, “Steve, what the hell are these two issues? Just get on with it and how can I fix them?”.
Fundamental Issue Number One: Poor Data
The first one, which will be very familiar, is very poor data—garbage in equals garbage out. This is still happening, and it’s even worse now, to be honest, because there’s so much more data available. If you are not spending a huge amount of your time qualifying, checking, organizing your data before you start to activate against it or execute against it, you are literally falling over the first hurdle.
The four things that keep coming up in conversations I’m having here are:
- Lists. There’s just lists of crap everywhere. You’re never going to get away from dealing with lists, but the provenance and quality of those lists is questionable at best. If you’re using B2B databases, LinkedIn, or deep inside your company’s CRM, trying to work out how to actually see anything useful, the level of diligence around all of that data varies so much. You have to do a fair bit of work on your own just to qualify and assess how useful all that is against your own objectives and criteria. AI is proving problematic here because it’s much easier to pull a list of 10,000, 20,000, 100,000 people, just bang out some stuff to them, and deliver a really horrible experience that nobody’s going to thank you for. You end up looking like an idiot because you’re doing loads of work that’s not having any impact whatsoever, and you’re actually actively damaging your brand in market, as well as your own personal brand if you’re a salesperson. Marketing and sales are in a unique position to come together with a very powerful voice to look at the data and say, “This is garbage, this is good,” and address these fundamental challenges.
- Exploding, still disconnected data sources. Pre-AI, great work was done in process automation and integrations to connect these data sources (data lakes, data warehouses, CDPs, DMPs, etc.). With the advent of AI, connecting data is now easier than ever, but there are also more data sources than ever. We are big proponents of less is more here. There is a danger that you’ve just got so much available and it all seems useful on the surface that you skip the assessment and analysis and just go straight to doing stuff. In B2B, the pressure is always on generating leads and demonstrating impact on revenue. That’s where the rush comes in, and the thinking gets damaged.
- Mismatch data points everywhere. For example, leads is a classic example. Marketing and sales have very different ideas about what a lead is. A lot of what are considered marketing qualified leads just get dumped in a bin and don’t even make it to sales. A simple example is when Marketing generates 200 leads, and Sales only uses two, saying the rest were garbage. This is a mismatch in the pipeline. Fixing this is easy through a “people talking to people approach,” but in bigger businesses with a focus on process, that problem becomes bigger and bigger. This is where a lot of money is left on the table because opportunities are being burned.
- Thoughtless automation. There are millions of “grifters” pitching complex processes on LinkedIn. Automating away all the leg work is an admirable goal, but as my colleague/friend Ross always says, you need the human in the loop to guide this stuff. This process should be about internalizing and doing in house because nobody will understand the fundamental details of the process better than you and your team. You can bring people in to assist, but never to dictate how that should work.
To summarize, garbage data in means even if you think you have a strong handle on the quality and guardrails around your data, there is data coming into your growth function that breaks the rules. This is muddying the waters at best, really damaging your ability to grow at worst. I am a big advocate of building your own first-party data and maintaining it yourself. As Melinda supposedly said in a past conversation, “data is the new oil“. Garbage in, garbage out—that’s what you get, be very careful. Point number one, that’s a fundamental issue number one.
Fundamental Issue Number Two: Sales and Marketing Misalignment
Fundamental issue number two is just diving back to our friends in sales and marketing, characterized by fundamentally different approaches that all claim credit for all the rewards.
Marketing Issues
If you’re in marketing, you are probably thinking you’re doing a great job talking to everybody in the world about your brand, sharing grandiose statements about how you can solve every problem and address everything. You’re probably booking a lot of events. For some reason, in the minds of C-suite B2B people, if you book an event and pay for that list of people to come to your stand and you get a load of email addresses, that is a gold standard of something that works in B2B. Events are important, but they are not a guaranteed font of amazingly qualified leads; they are just one touch point in a long journey. Marketing is a function that is going to claim as much credit as it can.
Where marketing is often very disconnected from the pointy end of things is demonstrating effort towards key accounts and key people in the buying groups. Marketing often misses the layer below general digital presence—the direct one-to-one, one-to-many within accounts work that I don’t see marketing doing huge amounts of in some brands. Many marketing teams invest in expensive, complicated platforms like Six Sense or Demandbase and feel like they are ticking that box, but they are not, because these tools cost a ton of time and money to run and are often not deployed effectively. Tools are getting shoved in to sort of do the job of people, where people are not being enabled or don’t have the confidence to just turn around and say no.
Sales Issues
The sales issue is very different. Sales are constantly whipped to convert stuff, generate leads, and generate revenue. These are very pressure-filled roles. The challenge sales have is that often a lot of their conversations hang off one person, but in B2B, we know that we’re selling to a committee or a buying group. That group can involve quite a lot of people over a 12, 18, or 24-month period. Sales naturally zoom in on key decision makers or key influencers or champions because it would be impossible to keep all those conversations going at a one-to-one level.
When a B2B brand is doing this really well (running ABM or highly targeted marketing), you will have beautiful harmony. Sales teams are feeding back those conversations at the coal face (potentially with note-taking AI to interrogate this stuff rapidly), and then the marketing team is elevating that back up a little bit to be everywhere for those customers, not to be everywhere for everyone. You just need to be everywhere for the proportion of the market you’re trying to talk to.
The second fundamental challenge with salespeople is that they will just ignore everything from marketing. Good sales people often feel they don’t really need marketing beyond making people aware that their brand exists. They think, “I can just create whatever I need, I’ll just get on the phone, I’ll get some meetings done, you know, I’ll just carry the conversation forward and I’ll just do the doing and convert it”. However, that creates a big disconnected customer experience between sales engaging at a personal one-to-one level and everyone else you need to be talking to. This is where a lot of frustration emerges, as sales are off-brand.
If I were to give one piece of useful advice, it would be for sales and marketing to meet in the middle on an account-to-account basis and draw down all the marketing’s motherhood stuff that is everything for everyone, and make it really specific to the individual person and their role in the target corporation. This is how you get in the zone in growth. This is why we talk about growth and don’t talk about sales and marketing. It should be a harmonious combination of both. Drawing on B2C thinking, you should forget sales and marketing and just think about the growth journey of the business and the customer journey and how you bring those two together.
Addressing the Fundamental Issues
So, the two big issues are garbage in, garbage out and the fundamentally different approaches of sales and marketing. The reason I’ve raised both of those is because they’re both relatively easy to start addressing, and the way to start addressing those things is just to start some more fundamentally aligned conversations inside your businesses.
- Marketers should take your mates in sales out for lunch, have a chat to them, go sit with them and see what they’re doing, and go out to meetings with them. Great B2B marketers spend a lot of their time ditching their marketing colleagues and sitting with sales to see what is actually happening at the pointy end of all these conversations and how they can support them more effectively.
- Salespeople should try to ignore marketing less and go and tell them more specifically what you actually want. Marketers are not the fluffy, airheaded people that you might think they are; they can do loads of great stuff.
The impact of all this stuff is massive, particularly as teams and scale get bigger. The three big directly attributable issues to these problems are:
- Missing lead opportunities at the very start, which means leaving money on the table that could be coming into the business.
- Dropping leads all the way through the funnel. The whole funnel is not managed as tightly as the sales pipeline. If the same diligence applied to the entire customer journey that is only applied to the sales pipeline (from opportunities to sales qualified leads onwards), you would bring a lot more leads right the way through.
- Subpar conversion. If the customer experience is disjointed or confusing, that affects conversion. Gartner still produce research that supports this; we make buying hard in B2B. The latest studies from Gartner reaffirmed this: buying stuff from B2B brands is hard work. The information is confusing, pricing is confusing, and you’re always having to talk to different people. Businesses need to start thinking about how they can make buying easier for their customers.
The dollar impact of all of this globally, or just in North America, is massive—it’s in the trillions of dollars that are getting left on the table or wasted. A similar figure for Australia would likely be in the millions or hundreds of millions of dollars worth of potential growth being left on the table or wasted. This data has been validated through due diligence and research done at Catalysis.
I’m keen to talk about these things in your role, either privately or on the podcast. If you have fundamentally disagreed with everything I’ve said, I would like to talk to you even more, because it’s fun to disagree and have some productive conversations. That was the Flow State podcast, and I have once again been Stuart P. Turner.