Article

B2B In Q4

Advertising b2b Consumer Behavior Data Economic Analysis Marketing

September 11, 2023

I wanted to complete the “Q4” series I began last week, while addressing a question I received from multiple readers over the last month: how should B2B marketers approach Q4?

Before We Dive In: The State of Things

Let’s start with the painful truth: Q4 2023 will be one of the most challenging for marketers of all stripes – and especially B2B – in the past decade. There’s a unique confluence of factors driving this, but the “starting five” are:

Multiple + Earnings Contraction – Over the past 24 months, we’ve seen both multiple + earnings contraction across the economic spectrum, from start-up/early-stage companies to more mature businesses. Part of this is rising interest rates (which puts downward pressure on valuations); part of this is demand evaporation as organizations shift priorities and plan for an economic downturn. The result of this is smaller fundraising rounds, longer sales cycles, and more scrutinized procurement processes – all things which pose challenges for B2B marketers.
The Collapse of Consumer Spending – While today’s issue is squarely focused on B2B, it is impossible to think about B2B marketing without considering the state of the consumer economy. The combination of soaring home prices, sky-high credit card debt, the return of student loans & the evaporation of pandemic excess savings have combined to crush consumer discretionary spending, which in turn reduces the funds available for those companies to use on their own strategic initiatives – whether that’s customer acquisition or (in our case) hiring service + support providers.
Economic Headwinds – It is no secret that we’re likely headed toward an economic slowdown or recession in the next 6-9 months. Interest rates are at their highest levels in decades, with the Fed expected to hike further. The US Budget Deficit is projected to eclipse $2T in FY23 – a $1T increase from last year. Businesses of all sizes are reducing costs, beginning layoffs and delaying capital expenditures. All of these things directly – and negatively – impact B2B marketing pipelines: smaller deals, slower velocity + more competition.
The Rise of AI – Finally, there’s the rise of “AI” (no, it’s not true AI, but we’re just using the common lexicon here). From a practical standpoint, this means a rapid acceleration of mediocre content, more automation and more consolidation. I think this will hit SaaS and professional services businesses particularly hard, as the barriers to entry in both spaces continue to collapse. Where spinning up a SaaS platform took $100k+ a few years ago, today it’s a fraction of that cost – and only decreasing. I’m not making any claims about the quality of AI-generated content/platforms/services, but I am saying that more and more brands are looking at them as tools to reduce spend – either on headcount or external service providers.
Platform Competition – Competition on platforms is rapidly intensifying. The one-two punch of automation and FOMO is pushing virtually every business to advertise online – which means more advertisers in every auction, higher CPCs and lower surplus value for advertisers. I do think this will abate as the tide goes out, but for now, it’s a bloodbath.

While, at first glance, this situation may seem dire – I believe every challenge masks an opportunity. And the opportunity for B2B marketers today is massive – if they’re willing to do what it takes to be successful. That includes:

1. Set Expectations & Priorities

The number of CMOs/VPs of Marketing (and similar) I know who have proactively addressed the above factors with their colleagues on the executive & investment teams (CEO, President, COO, CFO, Board Members, etc.) is woefully small. And that must change. It is 10x easier to proactively address these challenges head-on, while articulating your approach to overcoming them than it is to justify down reports or re-acquire a budget that has already been cut. I’m not saying these conversations are easy, but they are essential.

2. Zig When Everyone Else Zags

The cold, hard reality of turbulent economic times is that most brands will pull back spending, reduce headcount, and scale back on strategic initiatives (new product lines, research and development, new facilities, training programs, etc.). B2B organizations tend to do this to a more significant degree than customer products, as B2B buying journeys tend to be longer, more complex and more difficult to tie to specific marketing initiatives – plus, that longer journey results in the “pull through” masking the impact of the spend reduction.

The harsher truth is this: marketing is often the first thing on the chopping block. That’s a mistake (and no, not because I work in marketing). I say this for two reasons: (1) the best time to increase your investment in marketing is precisely when your competitive/peer set is reducing their spend – not only does lower competition result in lower costs, it also means that there are more low-hanging-fruit prospects out there who are likely to be receptive to your message; (2) it bolsters your pipeline further, so when your competition (frantically, as is always the case) realizes that their marketing pullback effectively shut off their flow of prospects, you’re in prime position. There’s also (3): advertising in a downturn is a show of strength + resilience – companies on the brink don’t do it. Companies worried about tomorrow don’t do it. The only company that advertises through a downturn is one that is confident in both itself and the future. While the impact of that may be difficult to quantify, it’s there.

3. Build Your Infrastructure

One of the most powerful things any organization – B2B or B2C – can do is build robust data infrastructure. Q4, as a traditionally “slower” marketing period, is the ideal time to focus on these efforts.

It is difficult to overstate the impact that good, reliable data can have on your marketing efforts, but there are two core ways I think capturing this level of data can be particularly valuable to the B2B crowd:

Inform Bidding Strategies: At this point, Enhanced & Offline conversions are the standard; if you don’t have those, you can’t expect to win. (If you’re wondering what those are, I wrote about them here). The short version is this: while every advertising platform’s algorithms are getting smarter, the true differentiation isn’t coming from platform data; it’s coming from brand/advertiser data – and more specifically, smart business data from those advertisers. The more you can tell Google, LinkedIn, Microsoft, Meta, etc. about what a high-value lead looks like, the better those platforms will be at identifying other users who think, act and are otherwise situated similarly to those people. If all you’re providing those platforms are form submissions, you’ll get more people who like to submit forms (whether or not they’re qualified). State-of-the-Art bidding strategies run on high-quality data. As marketers, it’s our job to make sure that that data is both accurate and available to the platforms on which we’re operating.

Get A Truer Picture of Your Business: I’ve long been a proponent of using Media Mix Models + Regression Analytics to quantify the impact of marketing initiatives on things your organization (or your client’s organization) cares about. Fortunately, data science is one area where LLMs + “AI” have been extraordinarily helpful to non-technical marketers, to the point where you can have ChatGPT (essentially) make you an automated MMM using data you feed it. It’s truly remarkable how (i) useful and (ii) commoditized these tools have become – it wasn’t long ago when businesses needed to invest $250k+ for a one-time MMM read. Today – you can do it in a week for 5% of that cost.

This is game-changing for the organizations that elect to use it. Imagine having clarity around which investments – content, SEO, PPC, Paid Social, Organic Social, Trade Shows, referral partnerships – contributed most to things your executive team cares about – deal size, deal velocity, win rate, deal profitability.

Not only will running these models help you make smarter investment decisions, they’ll also help you more effectively advocate for your budget + priorities moving forward.

4. Use That Data To Pull Back on What Doesn’t Work

This is one that most B2B marketers think is absolutely insane: spend LESS in Q4? Yes.

Here’s the playbook:

1. Cut The Fat: Use the data you’ve gathered in (3) above to identify + eliminate non-incremental, non-profitable spend – keywords with zero conversions in 2+ sales cycles? Good bye. That programmatic retargeting you signed up for ages ago? See ya. The affiliate network that isn’t doing much affiliate-ing? Been real, but not real fun. It’s going to make some people upset, but the bottom line is that unproductive spending isn’t your friend.

The result will be that your spend will decline substantially, while your qualified lead flow (and ultimately, SQLs) will remain flat.

2. Set Data-Informed Targets: Most B2B orgs have never actually run the numbers on what they should pay for a MQL / SQL / Opportunity – most have an idea about their margins for specific customer types, but that tends to be about it. Using the data you’ve gathered (plus your platform data + CRM data), set actual cost + conversion targets for Leads, MQLs, SQLs & Opportunities. It’s really just working backwards. Then, institute those cost targets in your ad accounts. You’ll likely see a further decline in spending in the short-run, but you’ll have healthier, more profitable, and more sustainable growth moving forward.

3. Scale Methodically: One you’ve rebalanced your spending, the final hurdle is scaling your accounts back to their previous spend levels (or higher!) while retaining the efficiency + health you gained in Steps #1 + #2. There’s no one right way to do this, but I’ve included many ideas below.

5. Audiences, Audiences, Audiences

One of the core components of any B2B marketing strategy is sound segmentation. Many of the B2B brands I audit are doing this (at best) at a rudimentary level – segmenting based on the form submitted or a checkbox/selection within that form. Better data allows for more robust segmentation. GA4 (for all its warts) is magical when it comes to advanced segmentation (and sharing those segments with Google Ads).

Take the time this Q4 to really build your audiences – not just your owned data audiences (customers & prospect segments by status/deal type/industry), but also Custom Segments (Google), Behavioral Audiences (Meta/LinkedIn) and engagement audiences (Meta, YouTube).

Tip: It’s worth setting up cohort segments during Q4 for your product/service pages – while Q4 is usually slow on the actual lead gen + buying side, it is budgeting season. I’ve found that some of my most successful Q1 campaigns are those that target (or re-target) site visitors from Q4 while they’re searching for a problem/service/solution related to what they were browsing back in Q4

6. Re-Think Your Customer Research

The way we purchase changes based on economic conditions. In good times (like the past decade-plus), most of us made investments on a whim and for the future – whether that’s Pelotons or Short-Term-Rentals or that trendy designer outfit. But in harsh times, that changes – we scrutinize each dollar to a substantially higher degree. We forego impulse purchases in favor of cheaper alternatives, discounts, or simply waiting until the pain of not making a purchase exceeds the pain of making the purchase. In short: decision-making becomes more negative and pessimistic.

The same holds true for B2B buyers.

As a B2B marketer, this Q4 presents a unique opportunity to re-think your consumer research, offers + positioning. Virtually every B2B company has built their messaging, positioning and offers within a climate of abundance and opportunity; few (if any) have gone through an exercise to identify how those things must change in order to resonate with today’s (and tomorrow’s) buyers. My advice is this:

Re-examine your competitive set’s offers + positions – what has changed? What hasn’t? Why?
Do a down-and-dirty survey of 30 organizations matching your Ideal Customer Profile (ICP): 10 current clients; 10 closed/lost opportunities; 10 prospects still in the deciding stage. Ask how their priorities and budgets are changing. Push to see if their decision-making criteria have shifted. What are their challenges today? What do they expect to need help with tomorrow? What problems are keeping them up at night?
Finally, run a survey (use Pollfish or Momentive or whatever) to 500-1000 brands matching your ICP. Ask the same questions as you did to the current prospects, along with questions about their confidence in the overall economy, plans for investments in your sector, other challenges, etc. If you really want to go one step further, include a forced ranking section with each of your core messages/value props.

Bonus points: include a question that asks each to rate how satisfied they are with their current service provider in your area. Anyone with low satisfaction is immediately interesting (either from a retention or acquisition standpoint).

Compile your findings + compare it against your current messaging and value props. You’ll likely see significant gaps. And that’s where your opportunity in 2024 (and beyond) lies.

Tip: use what you’ve found here to re-think your offers. Yes, your colleagues on the sales team will be less than amused, but the only thing worse than a changed offer is an offer no-one wants to buy.

7. Keyword Research Updates

This goes hand-in-hand with #5 above. I would venture to say that ~70%+ of B2B brands I audit have not updated their keyword research (or keyword targeting) in their Google/Bing accounts in over 12 months. I recently saw one account that had not updated their keywords materially in nearly 4 years (yes, pre-COVID).

Q4 is a golden time to take your research from #5, layer in insights from the sources available to you, and reorganize your PPC campaigns. It may not be the most fun thing to do, but there are worse things than sipping a PSL & restructuring Google Ads accounts. If you need some inspiration on where to look, here’s where I’d start:

Customer Research + Interviews
Your customer success team
Website Search Queries
Google Search Console Data
Google Trends
People Also Asked
Reddit (I’m continually shocked by the number of staggering important people who rely on Reddit/X way too much)
Competitor testimonials
Competitor service pages
Forums/Message Boards
Third-Party Tools (AHRefs, Moz, SEMRush, etc.)
Conference agendas

Take what you’ve learned, organize it thematically, map the themes to pages on your site (and if you don’t have a page/article that covers a particular theme – well, now you have a data-informed content creation plan), and voila!

Aside: it goes without saying (but I’m going to say it anyway) – LLMs (like ChatGPT) are NOT information retrieval systems. So don’t use them for keyword research. It’s a bad life choice.

8. Diversify Your Investments

While I think most brands are best served by focusing their investments into a few core platforms, Q4 is often a good time to experiment with others – the prime ones (Google, Meta) will be clogged with B2C advertisers pushing holiday sales, making Q4 an ideal time to think about alternative platforms – X, Google (Demand Gen is wonderful), Microsoft & Reddit all can be exceptional.

In some ways, this is an extension of point #1 above: when everyone else zigs, zag. Everyone will be spending on Meta (and, to a lesser extent, Google + TikTok) this Q4. And while Meta can be very interesting from a B2B standpoint, Q4 is not the time to test that theory.

9. Get Ready To Defend

The thing that is often lost (especially among B2B marketers) is customer retention/churn – probably because most B2B organizations have teams dedicated to it. But I think marketing is uniquely positioned to support B2B retention:

Search Terms: if someone is searching [your brand] + “cancel” (for a very obvious example), that’s a customer thinking about leaving. Ditto for a current customer searching for your primary competition / alternative. There’s one school of thought that says, “Well, their loss.” There’s another that says, “That’s a golden opportunity to win them back.” I’m firmly in school #2. If you don’t have (at least) one search campaign built-out for retention, you 100% should. If you’ve done your KW research well, you probably already have most of the terms. All you need is a solid retention offer. It’s significantly less expensive to keep a current customer than it is to acquire + onboard a new one – so spend the time!

Email & SMS: Segmentation is good for more than just marketing. Build segments of current customers based on their affinity, usage patterns, historical needs, etc., then send them tailored campaigns that motivate them to act. For example: if you identify a subset of customers who signed up for X, but haven’t used it – send them a demo and an offer for your team to set it up for them. A bank I’ve worked with pulled a segment of every business with a money market or savings account, but NOT a primary checking account. Each one was sent an email with a compelling offer: we’ll migrate your entire business checking account over for you. They pulled in a massive haul of new deposit accounts, plus loans – all with a simple segment + an email that addressed their audience’s #1 concern.

You Up: You can bet your bottom dollar that your competition will be trying to poach your existing clients – so why not go after theirs? Most B2B brands are sitting on thousands (some far more than that) of Closed/Lost contacts that they never reach out to again. That’s a mistake. Instead: (1) load those contacts into Google, Meta, LinkedIn (or wherever else); (2) use that research + messaging from #5 above to craft a few compelling offers (free audit; free migration, etc.), creatives + landers; (3) once that campaign is in-market, follow it up with an email (or, depending on your industry, direct mail) campaign. Yes, it’s the business equivalent of a “you up” text – but there’s a reason people send those kinds of texts.

10. Strategic Testing Is Your Friend

I’ll keep this one brief: testing plans in B2B are one of those things that everyone thinks of, and no-one ends up doing. This Q4, make it your mission to create a real, 10% or 10x testing plan for your business. Want some ideas? Check this out.

Thanks for reading!

Cheers,

San

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