By Marie Griffin
David Silke had just been promoted from VP of international marketing to CMO at Mitel when most countries went into lockdown due to the spread of the coronavirus. "We immediately had to adapt to a digital-first approach," he says. "In cases where physical engagement was required, that possibility was removed, literally, in a matter of weeks."
Like almost every company, Mitel scrambled to convert its meetings and events from face-to-face to virtual, and Silke noticed that current virtual trade show, conference, and webcasting technologies are still limited. As B2B events of all sizes and types move to virtual platforms, audience fatigue will set in quickly. Almost without regard to the quality of the content, the sameness of the platforms will make it challenging to attract and engage attendees, negatively affecting outcomes, he predicts.
"Digital experiences must become much more immersive" by integrating artificial reality, virtual reality, and technologies not yet developed, Silke says. "Whatever experience you are trying to create as a marketer has to become more dynamic. It's not enough just to bring someone to a website to read a blog or download a white paper. Never again will it be enough."
For B2B buyers, the already-blurred lines between their consumer and business hats have been obliterated by the experience of working from home, a situation that is likely to continue for many even after offices reopen. Against what increasingly seems like a permanent backdrop, any illusion that B2B marketing should be less digitally enabled than B2C has also vanished.
In their efforts to cultivate a digital-first strategy, B2B organizations continue to play catch up. Ted Schadler, VP and principal analyst at Forrester Research, says an organization's level of digital maturity will determine whether it can adapt to the economic crisis caused by the pandemic — and most companies have a long way to go.
For years, Forrester has been tracking the digital maturity of large enterprises in North America and Europe, based on a comprehensive survey of 1,500 respondents. "We rate only 15 percent to be digitally advanced," Schadler says, adding that 35 percent would be considered intermediate and almost one-half (49 percent) as beginners.
Based on the moves he sees enterprise companies making to accelerate their digital transformation, Schadler expects to see a large portion of the organizations currently at the beginner level of digital maturity shifting to the intermediate stage. He foresees "a smaller, but still a significant, shift from intermediate to advanced," as all organizations work through an unprecedented crisis and brace for what business life will look like on the other end.
"Customers expect to be able to engage with brands in ways that are more attuned to their needs," says Michael McLaren, global CEO of Merkle B2B Group. "This means more digital, more mobile, and a higher degree of marketing personalization. [Each factor] is only going to get more important in a post-COVID world."
UPS CMO Kevin Warren stresses that "the pandemic has only heightened the need for marketing departments to transform and operate differently," and adds that change is necessary because "the digital revolution has allowed new market entrants to leapfrog incumbent players by using next-gen technologies."
UPS is two years into what Warren calls its "new digital imperative," and is implementing "one of the most dramatic and complete transformations of our marketing organization in the company's history," he says. "We are creating new and agile operating models, flexible resource allocation and prioritization processes, tighter alignments between corporate and field marketing, and new centers of excellence in analytics and customer experience."
E-Commerce Takes Center Stage
Although e-commerce was a significant B2B marketing channel prior to the outbreak, companies have become much more dependent on digital transactions in the last few months.
According to a McKinsey & Co. survey involving business professionals who sell online, respondents reported in late April that more than half of their revenue (52 percent) was driven by sales completed online, compared to 40 percent in the months before the virus hit.
Warren says e-commerce has helped many businesses navigate this crisis and will continue to play an outsized role in the post-coronavirus environment. "Customers of all types and sizes are using e-commerce channels and tools now, more than ever, to manage and fulfill changing customer demands and behaviors," he notes.
Blessing in Disguise?
For years, CMOs have lobbied upper management to boost the company's investments in digital marketing. But with the virus forcing most every brand to recalibrate its digital capabilities, CMOs now have an opportunity to help shape their company's future — and increase the overall value of marketing.
"The strengths and value of marketers are being put into focus for sales organizations, the CEO, and CFO," says Tom Stein, chairman and chief client officer of Stein IAS. "The crisis is opening up the narrow perspective that a lot of nonmarketing leaders had about marketing, and they can now see what marketers are delivering in a way that's immediate, that's visceral."
He adds, "Marketing has gone from being seen as a cost center to being seen as a survival center because companies need to communicate during a crisis, and marketing has to do the communicating."
Nonetheless, marketing budgets are getting hammered. According to the McKinsey study, 57 percent of U.S. B2B companies have reduced their marketing spending since the start of the pandemic.
Tiffani Bova, chief growth and innovation evangelist at Salesforce, concedes that CMOs might not have total control of their budgets during such an unprecedented crisis, but they can exert influence through the way they communicate information to other members of the C-suite.
"Let's say the CFO wants to cut your budget by 50 percent," Bova proposes. Assuming the revenue projections have come down, "suggest cutting the marketing budget by 5 percent every two weeks to see how low you can go while optimizing everything. If marketers want to get the CFO's grip loosened a bit, they need to introduce metrics that will make the executive team feel comfortable."
Kyle Rees, director and team manager in Gartner's marketing practice, agrees. "CMOs need to provide very structured decision support to their internal clients — the CFO, the COO, the CEO, the CIO," he says. "A crisis is a time to assess and evaluate your marketing mix. Help identify things to eliminate, to simplify, to standardize or centralize, to automate, or even renegotiate."
Rees recently polled marketing leaders in a webinar at the end of April 2020 to see if they agreed that their organizations were well prepared to respond to the COVID-19 pandemic. Nearly half (46 percent) of the respondents disagreed or strongly disagreed. "Companies are projecting that they're handling this well, but, internally, they're still challenged," he says.
"This crisis has put daylight between those brands that were well prepared to take a massive shock to the system and those that weren't — the ones that didn't have the ability to quickly respond, adapt, plan, or develop different scenarios," Rees adds. "Creativity and innovation aren't inherently tied to digital, but CMOs are kidding themselves if they don't think the solutions to the problems of tomorrow include digital solutions."