After surveying more than 6,000 marketers from around the globe—the majority from businesses employing 25 people or fewer—Hubspot has released its annual report on inbound marketing for 2017. In today's post, we'll take a look at some of the findings which are relevant to business owners trying to market their small to medium size business. The report shifts focus between marketing and sales, then examines how the two work together, for better or for worse.
Priorities for Marketing Teams
The top priorities for marketers this year are not surprising: conversion, driving traffic and upselling current customers. In other words, marketers want to attract more leads, turn those leads into customers then turn them into repeat customers. These basically sum up the whole point of marketing.
Of those surveyed, 61 percent are specifically concerned with making themselves easy to find. This means increasing their ranking in organic search is top priority, followed by creating blog posts and distributing/amplifying content.
Less than a majority (39 percent) prioritize proving the ROI of their marketing efforts. While it's possible most of those surveyed have mastered the science of proving ROI, this isn't the most likely conclusion. We often hear from business owners and leaders that they are struggling to know what kind of impact their marketing efforts are having. It's more likely the respondents aren't sure how to prove ROI but are certain they need more blog content. Or they figure growth in the business will be proof enough their efforts are paying off. We'll see later on, however, that the struggle to prove effectiveness is a serious pain point. (If you're struggling to measure the effectiveness of your marketing, check out last week's post from marketing expert Gregg Makuch.)
A total of 71 percent of respondents focus their marketing primarily on inbound (when you narrow that down to North American marketers it rises to 76 percent), with 32 percent also calling paid advertising is the most overrated use of a marketing budget. Other overrated marketing methods include:
• Organic social media (13 percent)
• Online paid advertising (11 percent)
• Email marketing (10 percent)
It's not surprising that these numbers represent a minority of responses. There's been a great deal of emphasis on social, paid digital and email marketing. However, there's a lot of frustration around the constantly changing landscape of different social media platforms, some of which (ahem, Facebook) favor individual connections over the efforts of businesses to connect organically with their target markets en masse.
Priorities for Sales Teams
On the sales side of the equation, the top priority for 71 percent is closing more deals, followed by improving the efficiency of the sales funnel (44 percent). Fewer than half want to focus on social selling, training the sales team, reducing the length of the sales cycle and/or improving existing sales technologies. Only 14 percent prioritized investing in a CRM.
Further down in the report we see issues that feed into these. Closing more deals may have to do more with the quality of the leads salepeople are getting while the lack of interest in a CRM may be due, in part, to the horror stories sales teams hear about the time required to enter data.
Top Challenges for Marketing Teams
The top challenges facing marketers are
• Generating traffic and leads (63 percent)
• Proving ROI of marketing activities (40 percent)
• Securing enough budget (28 percent)
Here's where proving ROI shows itself as the Achilles heel of marketing. Without the right metrics, you don't know how much traffic you're driving and how many leads you're creating. You just know you want more. But if you can't prove your efforts are effective, you'll be hesitant to invest more money into something that may or may not be yielding results. Plus, without good reporting in place, marketers can't adjust their efforts based on what's actually working and what's not.
Training the marketing team was stated as a priority for only 19 percent of respondents, but training may be exactly what's in order, specifically training teams in proving ROI. This would go a long way toward alleviating the other top challenges. Once you start measuring ROI, you can fix what's not working while enhancing what is, which generates more leads. And when growth is demonstrably a direct result of your marketing, you're more likely to get the budget you need.
Small business owners will relate to some of the write-in responses from marketers to the question, "What is your greatest challenge?" such as “having the time to do our own marketing,” and being “overwhelmed by the responsibilities expected per team member.” Without budget increases these marketers aren't going to find relief, but until they can prove ROI it's not likely their budget will grow.
Top Challenges for Sales Teams
On the sales side, the top challenge was getting a response from prospects, followed by closing deals and identifying/prospecting good leads. Since marketing is responsible for qualifying leads and sending them to sales, this may be an indicator of misaligned teams. If your marketing department could send your sales team higher quality leads, all of these challenges could be minimized.
The report states, “Sales teams need help qualifying leads, whether it’s with more robust lead scoring or for marketing to use better lead-qualifying actions to ensure salespeople are given accounts that are most likely to convert into customers.”
The Time Trap: Manual Data Entry
While CRMs have been touted as the great time-saver of the century, salespeople are spending more time on data entry than they care to: 32 percent spend up to an hour per day while 19 percent spend up to two hours daily manually typing in information. This is time your salespeople are not engaging prospects. This may explain why 23 percent of respondents called manual data entry the biggest challenge in using their CRM. This was followed by 18 percent who said they didn’t know or the question wasn’t applicable—an indication they either didn’t have a CRM or were not familiar with it—and 17 percent citing lack of integration with other tools.
That lack of integration may be part of the root of the issue. With proper integration, the need for manual entry declines because every digital action can be automatically tracked and entered into your CRM. Only analog actions (phone calls, meetings, presentations, etc.) need be entered by hand. However, fully integrated software is expensive while patching together various pieces of separate software is complicated and, again, time-consuming.
The Disconnect Between Senior Executives and Individual Contributors
Justifying the cost of integrated software may be difficult partly due to the apparent disconnect between C-level executives' view of the matter vs. their salespeople's view. Breaking down the manual data entry question further, 34 percent of C-level executives expect it to take their sales team 30 minutes per day, tops. Individual contributors (the people likely doing the data entry) disagree—55 percent said this task takes between 31 and 120 minutes daily.
And despite our modern day reliance on digital, 36 percent of respondents said the phone was their most successful tool for connecting with prospects. But the phone is more highly valued by individual contributors than C-levels, as the figure below shows.
While the majority of respondents (61 percent) said their marketing is effective, breaking that positive response down by seniority reveals another disconnect where 69 percent of C-levels say their marketing strategy is effective, but only 55 percent of individual contributors agree. This prompted the authors of the report to observe, “This will evolve into a larger business problem if it’s not properly addressed. Clearer communication between leaders and staff is necessary in both scenarios.” The report suggests this disconnect could be due to senior executives seeing benefits but not sharing them, or having a blind spot to their marketing department’s failure to meet goals. Either way, both sides need clearer communication.
Marketing and Sales Should Be Friends
Last year's State of Inbound emphasized the importance of alignment between sales and marketing. This year 44 percent of those surveyed said their two teams were generally aligned while 22 percent reported tight alignment with a formal service level agreement (SLA) in place. And while 44 percent of individual contributors and 45 percent of senior executives agreed their teams were generally aligned, the C-levels were still more optimistic: 31 percent said their teams were tightly aligned with an SLA in place. Among individual contributors this number dropped to 17 percent.
The importance of the SLA remains clear: “Marketing respondents whose organizations have a service level agreement (SLA) in place are three times more likely to say their strategy is effective compared to those in misaligned organizations.” Of those tightly aligned companies, 81 percent consider their strategy effective and 70 percent said their sales team is growing. Compare that to those from misaligned companies, where only 27 percent called their marketing strategy effective and 50 percent reported growing sales teams.
The effect of an SLA is multifaceted. For one thing, it establishes an understanding between the two teams, establishes a feedback loop to facilitate effective communication and accountability, and provides visibility for each team to actually see what the other is doing.
Sales teams are generally skeptical of their marketing counterparts to provide high quality leads. In fact, 71 percent said the top source of sales come from leads sourced from sales and referrals. Only 25 percent said leads from marketing—the department whose one job is to source high quality leads—were the best source. When you break these numbers down to compare companies with tightly aligned teams to companies with misaligned teams, these numbers flip. Salespeople on teams in tightly aligned companies claim marketing provides the best leads. Companies with any other level of alignment (generally aligned, rarely aligned and misaligned) all considered the sales team their best source.
C-levels were more inclined to favor referrals while individual contributors favored sales.
The skepticism around leads sourced by the marketing department could be due to a lack of clear expectations/what qualifies a lead. Or it could simply be that salespeople aren't aware how many deals they close with leads that originated with the marketing team. Whatever the issue, a formal, written alignment is one of the best tools to make the marketing aspect of your funnel more effective.
ROI = Marketing Budgets
Marketers struggle to prove ROI. Not only does this cripple a marketer’s ability to prove the effectiveness of their methods, it eliminates one of the greatest hallmarks of inbound marketing: the ability to strategically change tactics to increase ROI.
The inability to prove the impact of your marketing also means limited budgets. If marketers can’t prove their impact, their budget will remain or shrink because nobody wants to throw money into a black hole. In Hubspot's report, 43 percent of respondents said they will spend $25,000—less than the salary of a single full-time person—on marketing over the next year. Less than 5 percent will spend $500,000 or more.
Never-Ending Content Creation
On par with last year’s report, video is the focal point for content creators, with artificial intelligence, virtual reality and augmented reality looming on the horizon. Currently, technology for consuming content created for VR and AR is not widely available, but marketers are keeping it in mind as they march toward the future and push for more video content.
Social media, with it’s rapidly changing algorithms, features and metrics, represents a pain point for marketers. New platforms emerge and demand consideration. The chosen ones require legwork to establish a presence and maintain it, which can be difficult to justify because constant fluctuations make proving ROI difficult.
Messaging apps are making up an increasing portion of social media marketing and some marketers see apps like WeChat and WhatsApp as contenders with email.
Bonus: How to Talk to Prospects
Hubspot asked its respondents about how they prefer to communicate for business purposes. If your business focuses on B2B products and services, this could help inform your own marketing strategy for how to find and talk to your target audience online.
When it comes to social media, LinkedIn is still the predominate platform for professionals, but barely: 78 percent use LinkedIn and 74 percent use Facebook for professional purposes. Professional outweighs personal use on only three platforms: LinkedIn, Google+ and—surprise—Twitter. While 56 percent of respondents cited Twitter for personal use, 59 percent said they also use it for professional purposes.
For business purposes, communication preferences differ somewhat by seniority level. While everybody prefers email (more than 80 percent across C-level, VP/directors, managers and individual contributors), 44 percent of C-levels prefer video conferencing and 37 percent prefer messenger apps. Compare this to individual contributors: only 32 percent prefer video conferencing and 25 percent messenger apps.
This trend differs depending on geography. While 15 percent of respondents in North America prefer using messenger apps and 29 percent social media, these percentages rise, respectively, to 37 percent and 39 percent in Asia, and 45 percent and 39 percent in Latin America.
Marketing can be an overwhelming subject for busy business owners, but with the right technologies, formal alignment between your teams and consistent tracking of your ROI, you can be more strategic—and ultimately more effective—in your efforts.