From Boom-2-Bust: why are B2B organisations less confident about long-term success

Confidence is a fickle thing. You can’t put your finger on it, own it, or buy it, but you can definitely sense when a business has it. Confidence within a business underpins longer term decision making; people are hired, investments are made and services and products are brought to market based on its existence.

Without confidence, and the investment that goes with it, businesses risk being busy in the here and now and failing to prepare for the challenges and opportunities that lie ahead.

And let’s remember that only 40% of businesses survive their 5th year.

Here at OV, we wanted to better understand the marketing confidence and capabilities of businesses emerging from several very difficult post-pandemic years. To do this, we spoke to a panel of over 100 senior business leaders across B2B and B2C about the levels of confidence they had in their own marketing function. You can jump ahead and download the full report here.

Today, I’m going to touch on just one of the most intriguing findings: why do B2B organisations appear less confident about longer term success than their B2C counterparts?

First, let’s start with what we found out…

1. 39% of B2B organisations were ‘very confident’ about hitting their 3-5 year growth targets. The B2C response was 48%.

2. In B2B, senior marketers are heavily skewed towards immediate returns from marketing investment (even more so than founders and CEOs).

3. Only ⅓ of B2B organisations have consciously developed a brand identity vs. nearly ⅔ of B2C organisations having done so.

What else is affecting confidence and the longer term outlook?

Let’s start with the rather gloomy economic context first.

The IMF estimates that UK GDP will grow by less than 1% in 2024 and by a modest 1.5% in 2025. That’s not a lot of growth. The US economy, by comparison, is growing more than twice as fast. Other research predicts a whopping 28,000 UK businesses will fail in 2024 – 50% more than pre-2020.

Next let’s add just two more considerations into the mix.

First, research published in the Journal of Marketing Management earlier this year found that half of B2B organisations aren’t investing in strategic marketing and yet the very same research found that B2B organisations stand to gain the most from this type of marketing investment.

And second, one of the other findings from our own research was that B2B organisations were more likely to rush a great idea to market. In fact, 29% of B2B respondents told us they’d “had a great idea and launched it as soon as they could”.

What’s the impact?

On the face of it, these issues are limiting UK businesses’ ability to think and act strategically and this is undermining the confidence of B2B organisations beyond the 12 month horizon. The results tell us there’s less senior marketing know-how in B2B businesses (vs. B2C).

This on the face of things isn’t wholly surprising – we see this borne out in the businesses we speak to who are often rooted in a sales-led approach defined by quantity of outbound activities and a business (and not end user) led sales process. This brute force approach to growth is quickly being seen as an outdated and ineffective method of achieving sustainable long term growth.

However its enduring legacy in B2B can be explained to some degree by this sales-led approach often working, at least in the short term and especially if the businesses’ product or service is novel or disruptive. However, after a year or two of grabbing at all the low hanging fruit, growth and scale become harder to deliver and sales efforts often become more intense and more forced.

The results also indicate that B2B marketers are far too focused on quick wins and alongside the CEO and founders, were too often willing to overlook (or unable to recognise) the importance of developing a brand identity especially as businesses transition from start up to scale up.

This is concerning. Marketers who aren’t willing or able to advocate for the value of brand and longer term marketing activity risk undermining the very thing they’re in the business to do and damage the company’s longer term growth prospects.

The compound confidence effect

With less marketing expertise sat within a business, and with less confidence over the medium to long-term, it’s likely that strategic marketing decisions will either be overlooked or deliberately ignored. This is certainly what our research points to.

Nowhere is this more important than a lack of understanding of what the customer actually wants (note: this was the one thing that seemed to unite everyone we spoke to and was recognised as something that needed urgently addressing). After all, when a business sees an opportunity, slowing down the process to speak to customers and get market insight is the exact opposite of how many businesses told us they operate.

I see these issues first hand and whilst every scenario is different there are usually common factors at play, many of which our research has highlighted.

A recent example of confidence in crisis

I recently worked with a B2B company that had enjoyed many years of success, was profitable and was launching new products to diversify its offering. However, it had lost its senior marketing voice within the business, had a growing lack of confidence to deliver its 18 month revenue targets and had recently rushed a number of “good ideas” to market.

As I started asking questions, it became clear that these “good ideas” that had led to new products had been built without their proposition being validated by the intended customer / buyer. What the business had developed was a solution to a problem the market didn’t have.

Worse still, as in this case, the problem was misdiagnosed as a promotional issue – and that all the business needed to do was spend more money promoting the product for it to magically fly off the shelves. This can be fatal at worst, and an expensive mistake at best as time and money is spent before the penny drops and someone realises there’s something more fundamental going on.

This conundrum is common and was a running theme throughout all the responses we received throughout our research.

What can B2B organisations do to combat a lack of confidence?

We recommend to start by asking three very simple questions:

1. Do you understand your customers’ pain points and/or challenges well enough?
   This will help you identify if there’s actually a market for the solution you’re thinking of creating or building.
2. What do your customers say about your business or brand, and does this match with your own view of your brand’s identity?
   This will help you diagnose if you’re placing enough effort on developing and evolving your brand, and whether you’re communicating the right things about your business and the people within it.
3. How are you evaluating the ROI of your marketing and is it realistic given your sales cycle, industry and longer term growth goals?
   This should help identify if you’ve got strategic alignment between your investments and the revenue streams you expect into the business.