B2B Marketers Are Working Harder Than Necessary. From the perspective of sales making their numbers, and marketing making their numbers (typically tied to sales like a string to a balloon), I guess it makes sense. Gartner Group determined that this ratio applies to most companies, with 80 percent of revenue coming from 20 percent of customers. Further, research from BIA/Kelsey and Manta in 2014 found that current customers spend 67 percent more than new customers, and are of course much less expensive to obtain (because you’ve already done so). This study was of small business, not necessarily B2B, but the thesis remains valid. B2B marketers find themselves caught between what they are being asked to do to satiate sales objectives, and what every piece of research (and common sense) has demonstrated to be true. This is a Ponzi scheme of priorities, and will not end well. The worst possible situation for marketers is to have to spend a ton of time and money to replace previous customers that didn’t renew. In that scenario, all the new customers acquired represent growth, not replacement revenue. But how you spend your marketing dollars is what you care about too, and most B2B companies are caring too much about acquisition, and not enough about retention.
A new study from Corporate Visions of 400 B2B organizations found something that doesn’t really surprise me, but still has me SMH.
This is disheartening, but certainly passes the smell test, as Forrester says that 80 percent of B2B digital budgets are spent on customer acquisition. And maybe that’s just the way it has to be, as B2B marketing organizations are asked to consistently produce more and higher quality leads to satiate their thirsty companions over in the sales department.
From the perspective of sales making their numbers, and marketing making their numbers (typically tied to sales like a string to a balloon), I guess it makes sense. But from the perspective of OVERALL company health, does it?
The 80/20 Pareto Principle was first posited way back in 1906 by Italian economist Vilfredo Pareto, who discovered that 80 percent of the land in Italy was owned by 20 percent of the population. Subsequently, the 80/20 ratio has proven to be present in a great many circumstances, including revenue. Gartner Group determined that this ratio applies to most companies, with 80 percent of revenue coming from 20 percent of customers.
Further, research from BIA/Kelsey and Manta in 2014 found that…
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