Call me Ebenezer. Because as I write this on Christmas morning, I have a Scrooge-like cautionary tale to share with everyone in the B2B data sector—both those of you who create and sell B2B data solutions and those who rely on B2B data to build your businesses.
It’s early. My alarm, set for 4:30 am, hasn’t gone off yet. But I can’t sleep. My brain is racing as I focus on visions that are anything but sugarplums.
I’m worried about the future of the B2B data industry. For weeks now, these worries have invaded my thoughts and even interrupted the blissful solitude of my early morning weekend runs along the Ramage Peak Trail.
Typically, when my premonitions reach this point, I rant online to my network of friends and I implore associates and readers for help sorting through what’s on my mind. With bated breath, therefore, I press the button to post and hope I don’t get trolled.
Grab a mug of eggnog and fasten your seatbelt, my intrepid reader. It’s going to be a bumpy ride. But as with the popular Dickens tale, first published 174 years ago, I think we can find a happy ending…provided we heed the warnings and work together.
The Ghost of Martech Past
As with all good rants, this one has been building for weeks…months even. But it’s really a story that parallels my professional experiences in the tech industry, which began at ADP more than 25 years ago.
I was reminded of those early days and all the subsequent developments when Al Ramadan—entrepreneur turned executive coach and co-founder of Play Bigger—was speaking at the Sierra Ventures CXO Summit earlier this quarter. He posted a graph showing the evolution of CRM, and my career flashed before my eyes. I have lived (and worked) through all four waves—from ACT and Goldmine in the late `80s and early `90s through the ubiquity of Salesforce today.
I have been in the thick of it as MarTech sophistication grew. We evolved from a singular focus on CRM and began tacking on a few early management and marketing tools. More recently, Big Data and marketing automation erupted into the mainstream. With the promise of greater ROI and competitive advantage, the race was on. The genie was out of the bottle. In 2011 Scott Brinker produced his first Marketing Technology Landscape showcasing about 150 companies. Since then, it’s grown anywhere from 40% to 80% year over year, and the 2017 version has a dizzying 5,000+ companies – I fear for the release of the 2018 version. Bah, humbug!
At each step in my career, I learned from salespeople I would consider legends in the business. These are people with a passion for their work and deep domain expertise. They understand the importance of making and cultivating customer relationships. Most important, they didn’t sell; they helped prospects make educated buying decisions. And they’ve helped shape my perspective of sales and provided the yardstick I still use today in measuring a great rep.
The Ghost of Martech Present
As visions of CRM danced in my head, I had a terrible realization. For all the opportunities envisioned, dollars spent, competitive advantages promised, and customers empowered, I see little evidence today that either side of the sales transaction has benefited significantly.
I welcome, almost beg, you to give me one metric that shows lasting improvement that has come from our technology infusion of the sales process of the last decade or more.
Are sales reps more effective? I’ll go farther than that; are they even as productive?
Is vendor longevity increasing? Have average selling prices gone up in any given sector? Are sales cycles shorter? Has the lifetime value of customers increased? Are customer experiences resulting in greater happiness? Are companies making better buying decisions? Is buyer satisfaction greater?
Even as Brinker’s 2017 Marketing Technology Landscape balloons beyond 5,000 companies, all I see are tech stacks getting larger and department heads — to paraphrase Mr. Dickens — girding new software on to their stacks of their own free will.
We’re fast approaching a saturation point. Perhaps we’ve already achieved “peak stack.”
It is this humble misanthrope’s opinion that the average salestech software in any subcategory has gotten so good, the differences among top solutions are now inconsequential. Even the most miserly of buyers can put together a world-class stack with a bit of savvy.
This is not necessarily bad for the industry and it’s not unique.
I experienced the same market trend in the outdoor industry when I took a sabbatical from the business world to run a non-profit, Big City Mountaineers, closely aligned with outdoor mega-brands such as The North Face, Patagonia, JanSport, and REI.
In the span of a few years, thanks to global design and manufacturing advances, high-quality outdoor gear went from the exclusive domain of expensive, high-end niche manufacturers to broad market standard of quality. We’re at a point where practically any piece of outdoor gear purchased at Walmart or Target today is better than the most expensive gear available five years earlier. You could literally climb Everest with equipment bought from private-label or no-name brands.
The same trends happened with cars. Today every vehicle is well-engineered, loaded with features, and built to high industry standards. Make and model are essentially inconsequential with regard to safety and function. Brand is less about quality and more a matter of personal style…ego too.
It feels to me as if the commoditization of technology is democratizing the sales and marketing stack. The playing field has been leveled and barriers to entry have been virtually eliminated. Enterprise and midsize companies — even fast-growing, aggressive startups — can all go toe-to-toe now. And this is the one positive effect I can think of related to the explosion of sales and martech vendors.
The downside of all this technological democratization is that now everyone is drowning in software and data together.
ROI never comes just from installing the software de jour. ROI comes from having a solid strategy, tight integration, and streamlined management. Unfortunately this is a reality most vendors ignore to the detriment and confusion of buyers.
Cookie-Cutter Sales Reps Feed Customer Confusion
I’m actually saddened by today’s typical sales rep.
Technology has lowered the bar to entry for sales talent dramatically and has given sales orgs a false confidence in automation. We’re lead to believe “set it and forget it” software will deliver leads, nurture prospects, and shepherd buyers into the hands of reps. Plunk down your credit card, and the rest will take care of itself, right?
The truth is that these layers upon layers of software, apps, and cloud services in the stack are separating reps from customers and making it even harder to understand a buyer’s needs. It’s making reps lazy and soft.
Technology has robbed reps of their humanity, their curiosity and virtually any interest in using a consultative approach to help prospects buy rather than a rep’s tendency to sell at them. All that’s left is a dumbed-down, cookie-cutter rep. Totally interchangeable. All parroting the company line. All at the risk of being engineered away by bots and AI in the near future.
Don’t think it’s that bad? Wander the aisles at Dreamforce and listen to the sales reps hawking their wares like traders in the Marrakech Bazaar. Notice the similarity in their messaging. It all blends together and leaves customers confused and clinging to the belief that if they just add one more layer to their stack, they’ll have the best possible sales and marketing machine.
Do you think the buyers walking the aisles of Dreamforce are just a tool away from the sales stack of their dreams? All these buyers have unwieldy, over-engineered tech stacks. According to the 2017 Martech Industry Council Research Results, the average stack includes 16 technologies, 25% have 20 or more tools, and a few have close to 100 technologies. When asked about their greatest frustration, it’s not surprising that half admit they have too many technologies and 49% complain about poor integration.
Similarly, a Conductor survey in 2016 found that only 1% of marketing executives track their efforts on a single dashboard. Most (81%) are bouncing around between two to 10 report screens, trying to piece together a coherent picture of their business.
Dissatisfaction is growing.
In a 2015 survey, just 9% of marketers felt they had the tools they needed and/or were using them to full advantage. In a Walker Sands Communications study two years later, only 3% report they are getting full value out of their tools.
There are a few glimmers of a backlash:
- At this year’s Stackies awards, the software company Informatica (with just 10 technologies in its stack) was one of six winners.
- On a personal level at LeadGenius, we’ve taken a less-is-more approach in 2017 and pruned our stack by about a dozen vendors. We’re collecting fewer MQLs, but better ones. We’re more focused, working more efficiently, and closing more business as a result.
The Ghost of
MarTech Data Yet to Come
This brings me to my cautionary tale for the future of data.
Today we’re in the second, maybe third, inning of a great B2B data renaissance. I believe data dominance will be the new competitive advantage, not software. Companies that use data well can move quickly, with greater precision, to reach the right buyers with the right message at the right time.
But for how long? Can we learn from our past experiences with marketing and sales software, or is it only a matter of time before we create a Frankenstein of data too?
There are some potential harbingers of future problems: Data vendors proliferate like rabbits and all claim their data as a panacea. Or they promise the impossible—claiming to be everything to everyone (yet their websites and marketing messages all sound suspiciously the same).
Buyers, in their confusion, are starting to throw dollars at multiple data sources and over-complicate their data strategy. Ask a typical mid-size data buyer what they are using for sales and marketing data, and gone are the one-word answers—Jigsaw; NetProspex; Hoovers—of a few years ago. Today, it’s not uncommon to see a dozen data vendors or more being used by large companies.
For now, we still have an incredible richness of specialized data vendors in the B2B space. But as multi-data-vendor strategies risk morphing into unwieldy data stacks, the richness of a sophisticated data strategy runs dangerously close to creating chaos.
Lessons for Data Vendors: Stop Feeding the Confusion
As vendors, it is up to us to raise the bar. We need to hire salespeople with domain expertise, passion, and a philosophy that to sell is really to help people buy — and, in some cases, that may even mean buying from a competitor. We need to find and hire people who see sales as their craft, and we need to retain them.
They, in turn, can help buyers make educated decisions based not on the data de jour but on a thorough understanding of what a buyer needs to do with their data. We can help them build a strategy and manage what should probably be no more than 3-4 data sources that serve that strategy.
Admittedly, this is not an easy role. In truth, it’s far easier to be part of the problem. But that leaves data buyers at risk. At LeadGenius, we’ve seen that our community’s research-based capabilities can fulfill customers’ needs for data orchestration, integration, actionable information and stack management. We know customers benefit because they’ve told us they appreciate our help in identifying their ideal customer and bringing disparate data sources together in a workable strategy.
But there’s more work to do. For starters, and you can call me a heretic, but we need to stop talking about…the WHY. Contrary to Simon Sinek, the whys are all sounding the same. Increase throughput. Build a bigger pipeline. Higher conversion rates. It all sounds like marketing bullsh*t that’s drowning out what really matters.
Buyers need (and deserve) a clear, crisp, concise explanation of what they are getting: What? How many? How deep? They need to know what a vendor does, what they don’t do, how they do it, and how that’s different from other data vendors.
There isn’t any B2B data vendor that can be all things to all customers. We’re not platforms unto ourselves. We’re contributors to the stack. We’re the fuel for a client’s go-to-market engine, and it’s time we all focus on what we do best and celebrate our differences.
Lessons for Customers: Take the Time to Understand Your Needs
It is time customers stop reaching for the next shiny bauble to add to their stacks and approach sales and marketing and data acquisition as part of a cohesive business strategy.
Start asking yourself the right questions:
- Does everything in my stack solve a business problem?
- Am I using vanity metrics (likes, leads, and engagement) and overlooking the analytics I need to understand my business (e.g., client acquisition costs and lifetime value of a customer)?
- Is my tech stack serving my marketing and sales needs while delivering targeted information at the right time to buyers?
- What are my strategic objectives for the design and development of our sales and marketing stacks? What do we need to do that job?
- Is our company culture customer-obsessed? Are we facilitating direct, one-on-one dialogue between sales and customers?
- Am I taking the time to understand the landscape of available data solutions? Do I even know the essential data elements that will give us the biggest bang for the buck? Is it intent data? Technographics? Company firmographics? And who are the two or three data vendors that will deliver 80% of the value to your business?
- As we begin to layer the necessary data sets, how do we cobble together a coherent, well-managed strategy? How do we integrate disparate data and resolve conflicting data to create actionable information for our salespeople?
- Do we need help with the difficult task of managing a stack built on multiple third-party data vendors and first-party data?
- Are we putting quality and results above quantity?
When Ebenezer Scrooge awoke from his nightmare, he had clarity of purpose. He reset his priorities and got on with living a full life.
I think we’re at much the same crossroads. While I’m realistic enough to believe that data could go the way of martech and salestech, I also know it doesn’t have to. I’m optimistic that collectively we can create a better future.
I’m hoping that this post will get you thinking and maybe even motivated to share your data story. I invite you to tell me what you think. Comment here, and let’s get a conversation started.
In the closing words of Dickens A Christmas Carol that motivated my post, written 174 years ago, may…”God bless us, Every one.”