Three Stages of Marketing in a B2B Company

After being a B2B marketing consultant for over 20 years, I have worked with hundreds of different businesses in hundreds of different stages of their growth. One pattern that continually surfaces over and over again in my work is the complications that arise due to the marketing growth stage of the organization. I have identified three stages of growth in the sales & marketing department of a B2B company that generally shape the outcomes of our relationship and the marketing efforts.  In this article, I would like to explore all three stages to allow you to self-identify where you might be and what you can do to prepare yourself to move to the next stage of your company’s growth.

Stage 1: We’ve never really done marketing before.

This is the first stage that I will call the “infancy” stage of a marketing process in an organization. The one key attribute of a B2B company in this stage is the fact that the majority of its sales are coming from referral or relationship-based transactions. What I mean by this is that the large majority of sales come from the personal network of the employees or owners of the business or referrals from existing customers. The business has grown basically on the backs of who you know collectively in the company. This can be a fantastic model for growth in early B2B companies. We have encountered many multi-million dollar businesses that have grown in this way. Yet all of these organizations at some point realize that their growth will be limited if they stay in this stage. It will be limited because they won’t be able to meet enough people to continue to grow or to open up new opportunities for relationships as their pool of relationships is used up.

Challenges with this phase

1. The first challenge for this phase is that your positioning is usually relative. What I mean is that you can explain your company any way you want based on the person or scenario you encounter in the sales process. You are a literal “transformer” molding the attributes and capabilities of your company to each opportunity as it comes to you.  Why is this a challenge? Read on.
2. Second, because of this transforming ability, you are going to have an incredibly hard time working with a marketing firm. The first thing a competent marketing firm is going to want to do is clearly define the company’s unique selling propositions. This means you will no longer be allowed to be a transformer. You will need to determine a) who you are b) what you do and c) who you do it for – very clearly and precisely. This will seem like a big challenge for you, but it is necessary to establish the proper business growth trajectory for stage two.
3. Lastly, the third challenge you will have is the cost of marketing. Being that you’ve never spent a dollar on marketing you’ll now spend many thousands of dollars on marketing probably with some element of tension considering the first point we discussed. You’ll be spending money on a group of professionals that are going to feel like they are limiting and not “getting” your business. This of course is not true, it is simply the tension that exists as you move to the second stage.

Stage 2: Grind it, till you find it.

I name this stage after an old saying, “grind it until you find it”, that was taught to me as I learned to drive a manual many, many years ago now. If you’ve never driven a manual or “stick shift” you will not understand the saying, but if you have, you’ll know that feeling of missing the gear and hearing the grinding noise and the subsequent relief you have in finding the gear. The metaphor rings true for businesses in this stage of growth as well. You are leaving the old ways behind, and the big goal in this stage is to identify the proper unique selling propositions, streamline your product/service, and find the right audience. There will be a lot of gear grinding in the process and there will be times when the campaigns don’t work as you thought. The reason is one simple concern.

You have not cracked the code on why the customer buys. The reasons why people purchased from you were not the reasons you believed. After working with many companies, I can stand confident knowing that many companies in this stage or the stage before don’t truly know why their customers buy. You will say you know. You will pound the desk and decry the marketing team’s efforts, but in the end, the reason is you don’t know the market. In your own fear and doubt, you will cast the blame on the marketing team, but in the end, you would have made the same guesses and the marketing team was taking your input as valid when maybe they shouldn’t have. The point being, is that this is normal and expected in growing companies – don’t overreact.

I work with some amazing companies and leaders. These people are very smart, especially those reading this article. Yet we all suffer from bias. No one in the company can  “read the label from inside the bottle”. You need an outside B2B marketing team who can do research, to help you determine those real reasons people buy. Customers are going to withhold the truth to your face. I’ve just seen it time and time again. Don’t believe me? How many of your customers do you think would tell you that you are charging too little? If they would, you have a good friend in that contact, otherwise, I’ve made my point.

Challenges with this phase:

1. You are going to choke the marketing with your lack of trust. You (the company) will try to shape the marketing too much and neuter the efficacy of the campaigns. Your “insight” can be really helpful, but ultimately you failed to realize that you are not a marketer. You are a CEO, COO, VP, Director, etc – you need to get the best people on the job and give them the resources to make it happen. You will need to give control of the messaging to the marketing team. If you think back to stage one, that is a big challenge for many. The CEOs of Fortune 500 companies are not approving the ad content. They are not picking homepage designs. They have put the right people in place and delegated trust to that team. You should do the same.
2. You will chase the “shiny thing” too often. This is not generally harmful if you have the budget, but many times the latest trend or hot social channel will become your next big obsession. You MUST HAVE that TikTok feed. You NEED that homepage video. You MUST BE on Instagram. There is a time and place for experimentation, but you are better off working channels for ROI than chasing the shiny thing.
3. You will hire and fire multiple B2B marketing firms before you realize it is you that is the problem. I don’t share this much, but one of the most important questions I ask when a new client comes to us, is why and who did you use before. The answer is telling on what we will expect and where you are in the stages of growth.
4. If you don’t fall into all the traps mentioned, the hardest part is enduring. It is seeing the campaigns through. It’s seeing the results and looking for those wins that can be built up.

Stage 3: Market-Based Growth

The third phase and really where everyone is trying to get is a clear and concise understanding of your product, marketing, and customer. When you have all of these in place, you transcend into marketing that can become ROI-based and deliver considerable results. This is where everyone wants to be and thinks they are when they start B2B marketing, but they are not. Because once you get to this place, you will make decisions not based on hypotheses but on historical results and proven unique selling propositions to a client you know very well. Sales and leads become a numbers game because you know what it will take to get the leads in, what messages the customers need to hear, and what challenges you solve. The beauty of this phase is the fact that you’ve figured out your business. It’s not a mystery anymore what messages work, who your customers are, and why your product is good. You’ve spent the money and time validating all of this and you have an advantage in the market. You have the sales to prove it. Yet the race is not over.

Challenges with this phase:

1. The big challenge with this phase is actually from outside threats. You likely have grown to a place where others see you as an industry leader, so you are playing a different game in the market now. You may not be the disrupter anymore, you might be the hunted instead of the hunter. You will need to monitor your competitors who are looking to make a move on your position. You will need to counter those messages and companies either with differentiated marketing or innovation.
2. You may be getting bigger deals and having more success which leads to having a larger marketing team internally. You will need to be careful to use agencies and outside teams to help inject innovation and the cutting edge back into your larger bureaucracy that will tend to be a bit more concerned with losing your position rather than gaining a new one.
3. Similar to the last point, you might also look to outside agencies to help move your B2B marketing at a faster pace, as your internal teams have much more political challenges to overcome simply by being in a large company. Ideas that will “rock the boat” are not generally coming from the in-house team. You’ll need to tap those “counter-cultural misfits” at the agency to put a little bite back into your strategy.

In Closing

These three stages are the generalizations of many engagements and companies I’ve worked with. If you see yourself in them, I hope the article will help you see clearly your position and the challenges and opportunities that lay ahead. If you don’t, that is OK as well, but you might be in a more challenging situation or have a very strange market which is what we do best. Either way, Godspeed in your b2b marketing and moving towards greatness.